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Amway: An Argument On How The Strategic Capability Of This Organisation Could Further Be Developed

2422 words - 10 pages

Introduction/Company backgroundAccording to the official Amway website at, Amway is one of the world's largest direct marketing companies. Founded by Rich De Vos and Jay Van Andels in Michigan in 1959, Amway's sales were more than half a million US dollars during its first year of business. In 1980, the company had its first billion dollar year of estimated retail. In the United States, there are more than 450 Home Care, Home Living, Nutrition and Wellness, and Personal Care products that carry the AMWAY brand name. Amway and its publicly traded sister companies support more than 50 affiliate operations world wide. Approximately seventy percent of Amway's sales are outside North America.Amway manufactures products in the United States, China, and Korea, and maintains product warehousing facilities around the globe. In 2003, more than 3.6 million independent business owners distribute Amway products in more than 80 countries and territories. Amway is part of the Alticor family of companies whose global sales totalled $4.5 billion in its most recent fiscal year. Distributors are considered individual organization owners, no Amway employees. They are sponsored by the business and trained by individual distributors.Much of Amway's success can be tracked to its infrastructure supporting personal organization owners to develop and enhance strategic capability. "Amway practices direct selling at its best. But it goes much further by combining direct selling with multi-level or network marketing. In plain language, distributors do not just sell products to their friends, family and neighbours; they also recruit or sponsor people who become distributors in their own right... Each organization owner becomes personally involved with those he sponsors. He helps them to get started and to prosper and receives a bonus based on the sales made by his recruits and all recruits they eventually sponsor" (Xandel (2002:2-3).Because of Amway's infrastructure where the key strategic initiative is the sponsoring of new individuals, the best way to illustrate how strategic capability can be improved is on the level of the individual distributor (or organization owner). Improving strategic capability at this level, like at any other level involves managing strategic change, leveraging organizational structure and effective leadership.One of the major characteristics of a project management strategy will be discussed here for Amway, is that it is finite - it has a definite start and finish. It also has a distinctive lifecycle and consists of a number of phases. Effective project management that develops the strategic capability of an organization involves the integrated management of the relevant functions trough this lifecycle. Various academics have their own theories as to how many phases there should be in a managed project. Kink and Cleland (1988) suggest there are five obvious phases, whilst Roman (1986) suggests four. Max Wideman (1987) also supports...

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