Growth Factors Of The Mary Kay Company Essay

Growth Factors Of The Mary Kay Company Essay

Among successful companies, Mary Kay Inc is considered to be one of them with more than thirty years of history. The founder believed in empowering women, and thus based her company to the realization of this goal. The company became successful due to many growth factors, including personal attention, expansion, and leadership.

History

Mary Kay Inc. ranks among the largest companies in the United States which manufactures and directly sells over 200 beauty products, ranging from cosmetics to dietary supplements. Majority of those who specialize in direct selling consists of women who either work part time or full time for the company. In 1999, the company has operations in more than 29 countries (International Directory of Company Histories, 2000).

The genius behind the company is Mary Kay Ash, who founded it in 1963. By that time, she has already 25 years of experience in direct selling for companies. Through direct selling, she was able to work and at the same time raise her three children as a single mother. She used to work for Stanley Home Products as sales representative. She would conduct home demonstrations of the products to the residences of her customers. Mary Kay was an independent contractor; she would buy products from Stanley and would sell the products herself. After only a year, she was known to be a “sales queen” (International Directory of Company Histories, 2000).

After a while, Mary Kay started recruiting other women to be salespeople. Eventually, she was able to encouraged 150 women to sign up, and she received commission from the sales of each woman. In 1959, May Kay left Stanley and worked for World Gift Company. Again, she resigned. This was the time when she thought about writing a book on direct sales. It turned out to be a book about managing people. She also thought about a “dream company,” and it took 20 years before the book was written and published. In Mary Kay on People Management, she discussed her desire to build an organization which adheres to the Golden Rule. She also envisioned an organization that caters to women and gives “unlimited opportunity to women.” Additionally, Mary kay followed three basic principles for the company: God, family, and career (International Directory of Company Histories, 2000).

Upon founding the company, Mary Kay, with her husband, spent $5,000 for a small office and for the manufacture of skin care products. Nine sales representatives worked for them. However, Mary Kay’s husband died before the opening of the company. Fortunately, her children were interested to support the company. Mary Kay’s sons, Richard Rogers and Ben, and daughter Marylyn all were involved in the family company. The company was named Beauty by Mary Kay, whose opening was on September 13, 1963. Salespeople were called “beauty consultants” (International Directory of Company Histories, 2000).

For the next years, many changes took place. The number of beauty consultants increased, and the company grew and expanded. There were many challenges as well, but Mary Kay Inc proved to be firm. It has provided job and growth opportunities for women around the world. The success of Mary Kay company can be attributed to several factors, which will be discussed in the following sections.

Growth Factors

The company was established to “enrich women’s lives,” and it was successful in meeting this goal (Underwood and Bartlett, 2002, p.x). Along with this mission, the company is set to improve its operations by adhering to growth factors which proved to be fundamental for the success of the organization as a whole. Its success can be seen at the rising number of women who became Independent National Sales Directors from around the world (Mary Kay Inc, 2009).

Personal attention. One of the reasons for the company’s growth and success was the personal attention it gives to its employees. Mary Kay Inc offered an incentive program to its beauty consultants, including a pink Cadillac. This has become a part of the company’s tradition. This started in 1967, when the company gave a pink Cadillac to its top sales director (International Directory of Company Histories, 2000). The giving of this prize shows recognition for the hard work and outstanding performance of an individual in distributing the company’s products. However, the pink Cadillac stands for something greater. According to the Vice Chairman of Mary Kay Inc, “It is a symbol of a whole way of doing business which we call the Mary Kay Way” (2002, p.x). And so, every year after the awarding of the first pink Cadillac, many were given the same prize. In 1993 alone, more than 6,000 beauty consultants have pink Cadillacs (International Directory of Company Histories, 2000).

Aside from the pink Cadillac, the company conducts annual conventions to recognize the achievement of its employees. This has also became an important event for the company. Furthermore, the annual conventions include workshops for the husbands of beauty consultants to teach them to be supportive of their wives’ career in the company (International Directory of Company Histories, 2000). Larger bonuses and commissions were also offered, especially during the early 1990s. This was after the company experienced setback. As a result of the new incentive, sales force grew to 200,000 in 1991. In 1993, Mary Kay Inc was selling to almost 20 million customers worldwide. Accordingly, a large number of its sales directors were earning more than $1 million. Additionally, almost $38 million worth of prizes were given every year (International Directory of Company Histories, 2000).

Another growth factor in relation to the personal attention given to employees is how they are treated. According to Underwood and Bartlett, who studied Mary Kay Inc, the organization was filled with enthusiasm, laughter, and excellence. Most importantly, beauty consultants were treated “with the utmost respect” (Underwood and Bartlett, 2002, p.x).

Expansion. By the 1990s, Mary Kay believed that the overseas market could do well for the products. In 1971, the company opened a subsidiary in Australia, which was to be the first international subsidiary of the Mary Kay Cosmetics. Another subsidiary was opened in 1978 in Canada, Argentina two years later, Germany in 1986, both Mexico and Thailand by 1988, Taiwan and Spain in 1991 and 1992, respectively. Beauty consultants from international markets took their products from the United States. However, some products were manufactured in foreign countries as the governments required the products to be manufactured locally. After only a few years, subsidiaries were opened in other countries, including Chile, Brunei, Singapore, New Zealand, and Uruguay. One of the company’s expansion was into Russia. It proved to be beneficial, as Mary Kay Inc has $25 million in revenues after two years of operations (International Directory of Company Histories, 2000).

Another important expansion in the 1990s was into Asia. In 1991, the company has operations in Taiwan, whose revenues reached $29 million in 1995. The next target was Japan and China in 1994 and 1995, respectively. However, the expansion to these countries proved to be difficult because of the strict regulations on products in Japan and the complicated politics in China. Despite these difficulties, the company was still considered to be the bestselling brand of personal care products in the United States whose sales reached $735 million (International Directory of Company Histories, 2000).

In 1997, another subsidiaries were opened in Ukraine and Czech Republic. A year later, a subsidiary was opened in Brazil. The international operations of Mary Kay Inc proved to be a source of growth for the company (International Directory of Company Histories, 2000).

Leadership. According to Underwood and Bartlett, good leaders make good teachers (2002, p.180). Mary Kay’s leadership has lasting impact on the organization, even after her death. During her illness, she withdrew from the operations of the company, and this caused some people to doubt the performance of the company’s operations. However, Mary Kay Inc enjoyed a boosting sales which reached the $1 billion mark. Furthermore, expansions were carried out in foreign countries. These only prove that Mary Kay has still an effect on the operations even without her presence (International Directory of Company Histories, 2000).

The steady growth of Mary Kay Inc and the growing number of beauty consultants can be attributed to the founder’s cherished values. It was Mary Kay who indicated the importance of valuing differences and being fair. This was fueled by her firm belief in equality. This reflected to the commitment of the company to embody these values. Furthermore, the sales force of the company consists of 88,000 African-American women and over 94,000 Hispanic women. This figure represents the company in the widest range possible (Underwood and Bartlett, 2002, p.180).

Mary Kay continued to be an inspiration to her subordinates. Personal stories of sales directors showed the impact that the founder had on them. By being beauty consultants and sales directors, the company’s goal to enrich women’s lives has been met. Many of sales directors came from poor families, but their membership into Mary Kay Inc was a step towards better future. Today, these women have become “better women, wives, and mothers.” Furthermore, they have achieved a life that they used to dream about. They also believed and saw the truth to valuing the differences and being fair as foundations of good business and strength of the organization (Underwood and Bartlett, 2002, p.180).

Despite the absence of the founder, Mary Kay Inc will continue to be a successful company. One of the reasons for such is job satisfaction from employees who are given importance and recognition for their hard work. Employees, referred to as “beauty consultants,” are given importance through the awarding of gifts, including the famous pink Cadillac. The company also conducts annual conventions where the husbands of beauty consultants can also attend. In addition, beauty consultants are treated with respect, thus contributing to the organization’s environment. Aside from this, the company is successful due to its expansions in foreign countries. This has become one of the strong areas for the revenues of the company. And more importantly, the organization has achieved its top position today due to the leadership that the founder practiced.

References

International Directory of Company Histories. (2000). Mary Kay Inc. Retrieved June 10, 2009, from http://www.fundinguniverse.com/company-histories/Mary-Kay-Inc-Company-History.html

Mary Kay Inc. (2009). Company Quick Facts. Retrieved June 10, 2009, from http://www.marykay.com/company/companyquickfacts/default.aspx

Underwood, J. & Bartlett, R. (2002). More than a pink Cadillac: Mary Kay Inc.’s nine leadership keys to success. United States: McGraw-Hill Professional.

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