1. Introduction
In 1990s, Jay Van Andel and Rich Decos started as founders of a family business named Amway in Ada, Michigan, USA. Amway stands for American way. The first original home product offered by Amway -Liquid Organic Cleaner (L.O.C.) has evolved into a worldwide business opportunity and become the pioneer of the multilevel marketing. The world headquarters located in Ada, Michigan, USA, stretches one mile from east to west and is comprised of 80 buildings and 3.5 million square feet of office and manufacturing space. Amway has 38 laboratories with more than 400 scientists and support staff. [www.amway.com] International expansion constitute Amway became the world's largest direct seller, with global sales of $11.3 billion in …show more content…
Threat of Substitute
Treat of Substitute is under high pressure. Most of the manufactured products lines from LML industries were too similar such as dietary supplements, skin care, home care and personal care. Besides that, directly purchase groceries in big Market or departmental such Tesco, Jusco or Robinson more considerable by customer due to convenience more considered choices and pricing of production lower than those MLM products. iii. Bargaining Power of Supplier
The Bargaining Power of Amway to its suppliers is relatively low. This is due to most of its bestselling product are produce by Amway itself. For example, in their nutrition product, Amway have its own farms and factory that produce from plant all the way to the consumable product. Referred Link
According to Amway sales report for 2014 announced in Feb 2015, the product that Amway is getting from its supplier is as low as 5% of its total revenue. The products that Amway is selling for its supplier are making more choice for the users who visit to their stores. Even without the offer from the supplier, the Amway business will not have much impact on that.
Referred
In 1990s, Jay Van Andel and Rich Decos started as founders of a family business named Amway in Ada, Michigan, USA. Amway stands for American way. The first original home product offered by Amway -Liquid Organic Cleaner (L.O.C.) has evolved into a worldwide business opportunity and become the pioneer of the multilevel marketing. The world headquarters located in Ada, Michigan, USA, stretches one mile from east to west and is comprised of 80 buildings and 3.5 million square feet of office and manufacturing space. Amway has 38 laboratories with more than 400 scientists and support staff. [www.amway.com] International expansion constitute Amway became the world's largest direct seller, with global sales of $11.3 billion in …show more content…
Threat of Substitute
Treat of Substitute is under high pressure. Most of the manufactured products lines from LML industries were too similar such as dietary supplements, skin care, home care and personal care. Besides that, directly purchase groceries in big Market or departmental such Tesco, Jusco or Robinson more considerable by customer due to convenience more considered choices and pricing of production lower than those MLM products. iii. Bargaining Power of Supplier
The Bargaining Power of Amway to its suppliers is relatively low. This is due to most of its bestselling product are produce by Amway itself. For example, in their nutrition product, Amway have its own farms and factory that produce from plant all the way to the consumable product. Referred Link
According to Amway sales report for 2014 announced in Feb 2015, the product that Amway is getting from its supplier is as low as 5% of its total revenue. The products that Amway is selling for its supplier are making more choice for the users who visit to their stores. Even without the offer from the supplier, the Amway business will not have much impact on that.
Referred