1. shopping
2. toys
3. dolls

Case Study:Alliance Formation
with Direct Selling Companies:
Avon and Mattel
高等直銷管理課程
指導教授：陳 得 發
作者：Lawrence B. Chonko
報告人：李 君 玲
Abstract
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This paper provides an assessment of the
recent alliance formed between Avon and
Mattel.
The alliance represents,among other things, a
blending of Avon’s sales expertise with
Mattel’s high quality products,including the
Barbie product line.
The alliance is evaluated on the basis of seven
requirements.
Managerial suggestions and research ideas
are presented.
Strategic Alliance Formation:
A Brief Overview
A company such as Mattel,Inc.can enter a foreign market
in one of three ways（Magrath 1992）：
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Establish a Foreign Subsidiary.
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Acquire Competitors and/or other Business.
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Form Alliances and/ or Joint Ventures.
Strategic Alliance Formation:
A Brief Overview
Magrath（1992）goes on to identify four types
of marketing alliances：
Establish Product and/ or Service
Alliances.
 Establish Promotional Alliances.
 Establish Logistic Alliances.
 Establish Pricing Alliances.
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Strategic Alliance Formation:
A Brief Overview
Alliance seekers hope to achieve a number of benefits,as
shown below：
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Gain Access to Local Markets
Derive Learning Economies of Scale
Block and/or Co-Opt competitors
Obtain Manufacturing Economies of Scale
Offset Competitive Disadvantage
Shape the Nature of Competition
Gain Access to Needed Technologies
Strategic Alliance Formation:
A Brief Overview
The Avon-Mattel Alliance
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In 1997,Avon Products,Inc. and Mattel,Inc. began a
series of joint marketing initiatives.
Among the joint initiatives was the sale of new Barbie
dolls and other Mattel products in the U.S as well as a
new line of Barbie cosmetics to be marketed
internationally.
The alliance is expected to generated $100 million in
sales to Avon in 1998.
Avon and Mattel marketed two exclusive-for-Avon
Barbie dolls in 1997, a Spring Blossom and a Winter
Velvet Barbie.
The Avon-Mattel Alliance
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The Avon-Mattel alliance can be characterized as a
product alliance for Avon and a promotional alliance for
Mattel.
Both Mattel and Avon are seeking benefits of a larger
scale through resource pooling－Avon benefits from
Mattel’s products and Mattel benefits from Avon’s
sales expertise and both companies retain their
independence.
The Avon-Mattel alliance also has some of the
characteristics of Kantor’s（1989）opportunistic
alliance.
The Avon-Mattel Alliance
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Mattel brings well-known brands and licensed
properties to the alliance.Mattel is enabling
Avon to become a primary source of Mattel
products in a direct selling format.
Avon brings a strong global distribution
network to the alliance.
The existence of this distribution enables
Mattel to expand the growth of both Mattel
products and properties.
Evaluation of the Avon-Mattel
Alliance
In order to withstand the rigors of international
competition,an organization should posses the
following characteristics ：
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A well-respected product or service.
Time-tested internal process.
Significant financial assets
Experience in international trade
Knowledge about foreign cultures and laws.
Evaluation of the Avon-Mattel
Alliance
Seven characteristics are commonly associated with successful
global ventures.
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Global Vision
Managers’ International Experiences
Strong International Business Networks
Preemptive Technology or Marketing
Unique Intangible Assets
Closely Linked Product/Service Extensions
Closely Coordinated Worldwide Organization
Results
While the jury is still out,the Avon-Mattel alliance
should produce results in the following areas
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Improved Customer Service Quality
Improved Support of Core Businesses
Improved Employee Performance
Improved Operating Procedures
Managerial Issues Associated
with Alliance Formation
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Focus on cost improvements that can be achieved
through consolidation and elimination of
redundancies,before looking for alliance arrangements.
Communicate, to all employees,all the essential
aspects of the alliance.
Assign a dedicated team of the “best” people to the
project,recognizing that an alliance my be the future of
the company.
Make sure that some people participate in all phases of
alliance consideration.Having some people who have
“been through it all” lends continuity to
communications and understanding of the reasons for
alliance consideration in the first place.
Managerial Issues Associated
with Alliance Formation
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Maintain good relationships with vendors.This is
imperative for continued successful customer service.
Explain,though multiple communication sources,why
change is needed.Such communication is particularly
useful when resistance to change is a function of the
lack of information.
Bring those responsible for implementation into the
design phase of alliance formation.This will increase
their commitment to future changes.
Encourage managers to be supportive by providing
training necessary to facilitate and implement alliance
formation.
Conclusion
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Alliances may become so critical that they serve as
basic building blocks in the operation of selling
organizations.
Internally,cross-functional activities and team formation
have become norms of doing business.
Firms employing these strategies are in position to
offer a broad-based set of capabilities to customer.
Internally,training and education have emphasized
these broad-based skills and capabilities.
Conclusion
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These internal capabilities have been
emphasized as companies drive toward
sustainable advantage.
As alliances form,sustainable advantage
becomes relevant for both partners and the
internal,broad-based training orientation of two
companies must be blended with an external
and an internal focus.