I.

TITLE

REVLON, INC.

II. TIME CONTEXT

2007

III. PERSPECTIVE/ VIEWPOINT

David Kennedy
Chairman and CEO of Revlon Inc.

IV. STATEMENT OF THE PROBLEM

The Financial Position of Revlon Inc. is weak due to net losses and debts.

V. STATEMENT OF OBJECTIVES
To improve the operating profit margins and cash flows of Revlon Inc. within a
year.
.
VI. AREAS OF CONSIDERATION

Strengths:
 Social Responsibility program.
 Provide quality products.
 Distribution channels are well managed that the reason Revlon products are
used in more than 100 countries of the world.
 Has a large merchandiser and chain drugstore.
 New product developing continues.
  Manufacturing plants ISO-9000 certification.

Weaknesses:
 Higher selling prices than its competitors.
 Continuous changes in the Organizational Structure may impact the
performance for employees.
 High Restructuring costs of almost $29 million.
 Lack of financial resources.
 Large amount of Advertising expenses.

Opportunities:
 Increase of Baby Boomers who have high level of disposable income.
 Personal care product usage is increasing.
 Develop products for male segment.
 Increase in demand for hair color.

Threats:
 Intense competition with major players of the industry including Procter and
Gamble, Unilever, L’Oreal.
 Gas Prices are high and rising.
 Decreasing value of dollar.
 Older people tend to spend less on cosmetics.

VII. ALTERNATIVE COURSE OF ACTION

ACA 1: Product Development

Advantages:

 It can create strong bond ties between consumers and the product.
  The current consumers support and patronization of the product will be
much greater.

Disadvantages:

 The costs for the improvement of the products will be costly.

ACA 2: Horizontal Integration

Advantages:
• Company has more power over its supplier and distributor or customer.
• Less intense of competition in other companies.

Disadvantages

• Reduced Flexibility. Large organization are harder to manage.

ACA 3: Divestiture

Advantages:
• Increase capital for further acquisition or investment.

Disadvantages:
• It’s hard to find who will buy the business unit.
Criteria ACA1 ACA2 ACA3

Easy to Implement 2 1 3

Increase Profit 3 1 2

VIII. CONCLUSION
Efficiency 2 1 3

Total 7 3 8

Legend: 3 being the highest, 1 the lowest

IX. RECOMMENDATION
Due to net losses and debts Revlon Inc. showed a very weak financial position.
After analyzing and a long deliberation we therefore decided to recommend the
alternative course of action 3 which is using a different strategy Divestiture, through
this it can help the corporation to obtain funds, allowing to pay off their debts and to
use capital wisely on their day to day operation. This can be done by removing some
of their underperforming business units, pay offs or equity carve out to restore their
company’s core business.

X. PLAN OF ACTION

ACTIVITIES PERSON RESPONSIBLE TIME FRAME

1. Monitor or Review
the other businesses Officer in charge 2 months
unit involved in the
company.
2. Check if the
businesses unit under Officer in charge 1 month
Revlon is still making
 profits.
3. Planning if what
business unit are you Officer in charge 3 months
going to sell.
4. Find Investors who
will acquire the Officer in charge 5 months
business unit.