Lp6 Assignment: Case Analysismultilevel Marketing Under Fire

Herbalife MLM Business Model Name Institutional affiliation Herbalife Defends Its Business Model Introduction Herbalife is an American multi-billion dollar publicly traded multinational drug pharmaceutical company. The company has its headquarters in Los Angeles, California. The company was established in 1980 by Mark Hughes from the trunk of his car. Six years later, it floated its shares in the NASDAQ stocks exchange. The mission of Herbalife was to provide a safe alternative to commercial weight loss products. Currently, the companys products are available in over 90 countries. Herbalife success can be linked to its multi-level marketing approach. The approach is often mistaken for a pyramid scheme. However, there is sufficient evidence to indicate that Herbalife is a legitimate company. Multi-level marketing Multi-level marketing is a direct approach to product distribution. Direct distribution avoids the use of intermediaries to distribute the product to the customers. This gives the company greater control of the product distribution and the flow of feedback from the customers to the company. Indirect distribution, on the other hand, is an easier way of accessing a wider market within a shorter time. However, the manufacturer has no control over who the intermediaries sell to, how the products are displayed