Revlon Inc was formed in 1932 with a USD:300/- investment.

Product categories include

Skin Care, Cosmetics, Personal Care, Fragrance and Professional products. Some of the
companys most recognized brand names include Revlon Ultimo, color stay, Almay,
Charlie, Flex, Mitchum and Jean nate.

Competitors: Procter and Gamble, LOreal, Uni-Lever, Avon products, Inc and Estee
Lauder.

MISSION STATEMENT

To emerge as the dominant cosmetics and personal care firm in the twenty-first century by
appealing to young / trendy women, health conscious women (skin care) and older women
with its variety of brands.

VISION
Vision of Revlon is to provide glamour excitement and innovation of consumers through
high quality products at affordable prices.

SWOT
Strengths:-

(1) Customer loyalty.

(2) Continous research and development
(3) Large scale and effective advertising
(4) Iso 9002 certified for most of companys manufacturing plant.
Weaknesses:-

(1) Low employee morale because of unemployment due to re-structuring year

2000: 403 and in the year 2001: 1697
(2) High debt.
(3) High selling and administration expenses 2001: 723.1 (93.05% of GP)
(4) Less utilization of capacity.

Opportunities:-

(1) Large market locally and internationally.

(2) Equity markets are healthy.
(3) Customers are more willing to pay for cosmetics.
(4) Emerging market of Asia.

1
Threats:-
(1) Many customers are saving for their childrens college fees.
(2) Global Instability.
(3) Non-essential and expensive products.
(4) Tough Competition.

IFEM
Strengths Weight Rating Weighted Score
(1)customer loyality 0.10 +4 0.40
(2)cont R&D 0.20 +4 0.80
(3)Advertising 0.15 +3 0.45
(4)ISO certification 0.10 +3 0.30
Weaknesses
(1) 0.2 -1 0.2
(2) 0.05 -2 0.10
(3) 0.10 -1 0.10
(4) 0.1 -2 0.2
Total 1.00 2.55

Conclusion

Weighted Score indicates that Revlon is internally strong to support its strategies.

EFEM
Opportunities Weight Rating Weighted Score
(1) 0.20 +3 0.60
(2) 0.05 +2 0.10
(3) 0.2 +4 0.8
(4) 0.1 +3 0.3
(5)
Threats
(1) 0.15 -2 0.30
(2) 0.10 -2 0.20
(3) 0.10 -1 0.10
(4) 0.10 -2 0.20
Total 1.00 2.60

2
Conclusion
Weighted Score 2.60 indicates that Revlon Inc would capitalize on opportunities and
threats.
TWOS ANALYSIS
Opportunities
(1) Large market locally and
internationally
(2)Equity markets are healthy
(3) Customers are more
willing to pay for cosmetics
(4) Emerging market of Asia
Threats
(1) Many customers are
saving for their childrens
college fee.
(2) Global instability.
(3) Increasing credit card debt
os customers.
(4) Tough competition
Strength
(1) Customer Loyalty
(2) Cont R&D
(3) Large sale and effective
advertising
(4) ISO certification
SO Strategies
(1) Market penetration (S1,
S2, O1) Increase the current
usage of customers and
number of customers through
advertising, salesman ship
and improved quality.
(2) Change premium for
unique products.
ST Strategies
(1) Development of products
(S1. T1) Produce products
with changes in color, size
and orders etc .
(2) Diversification (S1, S2,
S3, T4) In future competition
may become more tough so
diversify in to different range
of products e.g
pharmaceutical (Horizontal
diversification).
BCG MATRIX
MARKET SHARE
Weakness
(1) Low employee morale
because of unemployment
due to restructuring
(2) High debit/assets ratio
2000: 1.45 2001: 1.66
(3) High selling and
administration expenses
2001: 723.1 (93.05% of GP)
(4) Less Utilization of
capacity
WO Strategies
(1) Divestiture (W3, W4, O2)
Sell the division and invest in
marketable securities.
(2) Joint venture (W5, W4,
O1, 03 and O5) Make joint
venture with one of its
competitors to produce
brands through compliment
of distinctive competencies.
WT Strategies
(1) Joint venture (W4, T2.
T4)
(2) Retrenchment (W2, T1,
T4) Reduce cost through
downsizing, sales of useless
assets, reducing employee
benefits etc.
3
 High Avg Low
4.0 2.0 1.0

INDUSTRIES High
D1, D2, D3
GROWTH +10.0
Star Question Mark
Cosmetics Fragnance Personal care

Medium
0.0
Cow Dog
D5, Skin care Professional
Low D-4
-10.0

Division Sales Shares Growth

(Millions) % %

1 400 3.6 + 9.09

2 300 2.3 + 7.00
3 300 2.0 +10.00
4 200 1.4 - 10.00
5 121 4.0 - 8.30

GROWTH RATES

YEAR 2000 YEAR 2001

(in thousand) (in thousand)
D-1 $ 10,000 $ 11,000 9.09%
D-2 12,090 13,000 7.00%
D-3 13,500 15,000 10.00%
D-4 15,000 13,500 -10.00%
D-5 3,300 3,025 -8.30%

STRATEGIES
4
D1, D2, D3

Since market is in growth, share is high and competition is tough, Revlon has to penetrate
with low cost and focusing on better quality of fragrances and cosmetics.

D4

Such division is not working well. It is better to keep the cost low through downsizing,
less advertising and better administrative control.

D5

This unit is earning a lot of cash. Revlon should do backward integration to capture the
market through economies of scale or use cash (generated in the division) in other division
to improve their performance by purchasing the technology and hiring experts (who could
develop new products through research)

SPACE MATRIX
FS

+6
+5
+4
+3
+2
+1
CA IS
-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
-1
-2
-3
-4
-5
-6
ES

FS
1. +4 Return on investment +2

5
 2. +5 Liquidity +3
3. +3 Working Capital +4
4. +4 Cash flow +3
+16 Average +4 Fs Average +3.5

IS
1. +4 Growth Potential +4
2. +3 Profitability +3
3. +5
4. +4 Regulations +5
5. +5 Emerging Market +6
+25 Average +4.5

CA
1. 1 Research and development -1
2. 4 Customer loyality -3
3. 1 Market Share -4
-6 Technological Advantage -2
Average -2.5

ES
1. 5 Technological Advancement -4
2. 4 Global Instability -4
3. 5 Increasing competition -5
4. 6 Barrier to entry -3
-20 Average 4

ON X-AXIS
5-2 = +3 CA + IS = -2,5 + 4.5= +@

ON Y-AXIS
-5+4 = -1 FS+ES = 3 + (-4) = -1

STRATEGIES

Since opportunities are there along with market growth and competitive advantage through
continous research and development therefore there is lot of market potential and Revlon
should concentrate on developing products with reasonable cost through forward
integration. This would help reduce cost in the long run in such a tough competition era.

6
 QUANTITATIVE STRATEGIC PLANNING MATRIX

S.NO WEIGHT MARKET MARKET

PENETRATION DEVELOPMENT
AS TAS AS TAS
Strengths
1 Efficient Sales Team 0.10 4 0.4 3 0.3
2 Customer Loyalty 0.20 3 0.6 4 0.8
3 Large scale and effective 0.15 3 0.45 4 0.6
advertising
4 High improved current ratio 0.10 1 0.1 3 0.3
Weakness
1 Low employee morale 0.15 1 0.2 1 0.4
2 High debt/assets ratio 0.05 2 0.10 1 0.05
3 High selling & admin.expenses 0.10 0 0.00 0 0.00
4 Less utilization of capacity 0.15 3 0.3 3 0.3
Opportunities
1 Large market locally and 0.20 1 0.20 2 0.4
internationally
2 Equity markets are healthy 0.05 1 0.05 2 0.1
3 Customers are more willing to 0.15 4 0.8 4 0.8
pay for cosmetics
4 Entry barrier exist 0.05 1 0.1 3 0.3
5 High Growth 0.10 3 0.30 4 0.40
Threats
1 Many customers are saving for 0.15 2 0.3 3 0.45
their childrens college fees
2 Due to ever increasing price of 0.10 3 0.3 1 0.1
oil, demand in developing
countries may decline
3 Global instability 0.10 1 0.10 3 0.30
4 Tough competition 0.10 3 0.30 3 0.3
Total 4.3 5.3

Strategy

Market development should be done. The total scores are higher than market penetrations
strategy score. Therefore market development is more desirable strategy.

Revlon should go beyond its boundaries and find new markets of fragrances and cosmetic,
specially in Middle East and Central Asia.

7
 QUANTITATIVE STRATEGIC PLANNING MATRIX

S.NO WEIGHT NEGATIVE DIVASTITURE

TURNAROUND
AS TAS AS TAS
Strengths
1 Efficient Sales Team 0.10 0 0.00 0 0.00
2 Customer Loyalty 0.20 0 0.00 0 0.00
3 Large scale and effective 0.15 3 0.45 3 0.45
advertising
4 High improved current ratio 0.10 4 0.40 3 0.30
Weakness
1 Low employee morale 0.2 2 0.30 3 0.45
2 High debt/assets ratio 0.05 4 0.20 2 0.10
3 High selling & admin.expenses 0.10 4 0.40 3 0.30
4 Less utilization of capacity 0.15 2 0.30 3 0.45
Opportunities
1 Large market locally and 0.20 3 0.60 4 0.80
internationally
2 Equity markets are healthy 0.05 0 0.00 0 0.00
3 Customers are more willing to 0.15 4 0.60 3 0.45
pay for cosmetics
4 Entry barrier exist 0.05 3 0.10 4 0.20
5 High Growth 0.10 2 0.20 1 0.10
Threats
1 Many customers are saving for 0.15 3 0.45 3 0.45
their childrens college fees
2 Due to ever increasing price of 0.10 4 0.40 3 0.30
oil, demand in developing
countries may decline
3 Global instability 0.10 1 0.10 1 0.10
4 Tough competition 0.10 4 0.40 3 0.30
Total 4.90 4.75

Strategy Choice

Negative Retrenchment is desirable strategy. Revlons weaknesses (large scale advertising

i.e. 95% of Gross Profit), and high debt/asset ratio) have more impact on retrenchment
strategy rather than divestiture.

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