The Guideline to addressing the Case of Revlon ( The First Case) : From Case – Facts to identifying the issues

, and Assessing the Vision and Mission Statement

By DR. Mas Bambang Baroto

August 22nd , 2010

I. External Environment : Excerpt form : Thomson / Stricland / Gamble : “ Crafting and Executing Strategy. 17th Edition Demographic and Social Trends Issues : .

1. International market : is opportunities : Asian countries have the population 60 % of the world . Change proportional of racial & ethnic population 2. Aging population b. 5. Other segment for cosmetics and personal care : Females ( Age 12 – 19) : population will become 20 million by 2010 4. Racial / ethnic : shifting : African – American is largest segment : Hispanic is the fast growing largest minority segment : by 2010 the population will be achieving 404.5 million individual. “Cosmetic and personal care “ industry is impacted by 2 major changes in demographic in US composition : a. Baby boomers : Americans born in 1946 – 1964 : significant market of cosmetics and personal care : high level of disposable income : brand loyal consumers : consumption pattern almost constant : 55 and older : remain active in the workforce for longer period of time 3. : white non Hispanic is to decline 68 % by 2010 : Asian – American is growing rapidly.

India. Large number of women prefer to purchase these items at : Drug stores. March 2006 : many major retailers. 10. 7. Japan.Women in China. The value of US dollar has dropped to historic lows. and mass . b. Gas prices are high – rising living cost of Americans – lesser disposable income for purchasing cosmetic 8. Intense : in the cosmetic/skin care industry 2. Leaving cosmetic companies with viewer opportunities to stock additional products in retail store shelves 9. including Wal . and the Middle-East rapidly growing interested in purchasing more cosmetics and fragrances. Consumers’ concern about safety and use of animal testing by cosmetic companies. such as Avon. 4. of which are having 20 % of the world’s population. The existing major market of personal care products : US. European countries. which benefits cosmetic firms that do considerable global business. The market for hair coloring has expanded with teenagers and adults d. Outlet : door – to – door (Avon) and the internet . The size of the industry is :$ 200 billion world –wide 3.volume retailers such as K.Mart and Wal-Mart. Consumers of cosmetics / personal care products is not only women c.Mart did strategic intent : a. supermarkets.6. Reduced inventory level b. Competition Issues : 1. Thus Potential market around the world is excellent. Social demographic issues that may impact the industry include : a. Older people tend to spend less on cosmetics e.

Banana Republic. Other competitors of Revlon include small companies include : a. Vision : “ to provide glamour. skin care. 3. L’Oreal and Unilever. A World leader in cosmetic. and Sephora. and Victoria Secret. excitement innovation through quality products at affordable price” Exercise this Vision : . 6. Specialty stores such as Bath and Body Works. Urban Decay. Body Shop. Leading “mass-market” cosmetic brand. Estee Lauder Co. Revlon major competitors : P&G.. Avon Products. The member of the Industry Issues : ( Excel – File) III. b. 4. c.5. at affordable price to women 2. Revlon Issues : 1. 75 year history : high quality product. Competition for the African – American market is also increasing with brands such as Fashion Fair and cosmetic line launched by Iman and Patti Label II. Retailers selling their own brand such as Gap. fragrance and personal care. 7.

5. and Reduce staffing +/. Revlon Sales data : N o 1.$ 33 million / year 6. Revlon Sales Net Sales 2007 2006 1.331 2005 1. CEO : David Kennedy His current Strategic intent : “ consolidated sales and marketing functions to reduce operational costs” : • Eliminated some senior positions.8 % of US workforce to save +/.332 Growth .

and Almay Smart . Flex. PersonalCare.8 397. Ultima II. and professional products. Jean Nate. 2). Mitchum. Mission : “ to emerge as dominant cosmetics and personal care firm in the twenty-first century by appealing to young/trendy women.1 % 4.3 268. and elder women with ist variety of brands” Exercise this mission : The company continues to introduce new products : 2005 : intro of : Almay Intense Eye Color.3 646. Cosmetic. Distribution of products : 100 Countries around the world ( Exhibit – 1) 8.3 84 4. Products : 1).5 % 2007 – 2006 = 2. Charlie. Shade 2006 : intro of : Color Stay Smooth Lip 9.6 % Are there any special issue(s) that you could draw from the above table? Losses 8 Years consecutive years and struggled with debt since RON PERELMAN purchased a majority stakes in 1985 Revlon is in Trouble 7. health conscious (skin care).(Billion) Net Loss (Million) Sales Outside US First Half (Million) 1st Half US 1st Half (Million) International 1st Half (%) International Sales 251 43 % 677.5 280. Almay. Fragrance. and ColorSilk 3). Product Categories : SkinCare.6 378. Color Stay. Most recognized brand names: Revlon.8 % 5.

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