I.

Background

a. Introduction
Revlon is an American Company that was established in 1932 and it’s considered
as a Cosmetics, Fragrance and Personal Care Company.
In addition, it’s considered a business leader in cosmetic industry and its products are
distributed over 100 countries around the world with sales percentage of 55% outside
the United States.
The main business lines of products in Revlon are Cosmetics, Hair, Beauty,
Fragrance, Deodorant, and Skin Care.

b. History

1932 Inc. was established by three founders.

1938 Transform from a small nail coating company to multi millions dollar organization
1968 Charlie Revson passed away.
1985 Two third of the Revlon’s sales were health care products which resulted in losing
ground in cosmetics.
1987 Ronald Perelman took over the company for $1.8 Billion and returned the company
to its roots and health care products were sold off.
2001 Reintroduced the 33-year old product Ultima II
2002 Charlie perfume was reintroduced and Revlon agreed to join manufactures with
Pacific World Corporation
2003 $ 150 Million received from MacAndrews and Forbes Holdings, Inc.
2008 The debt of the company was reduced by $ 100 million
2010 Perelman owned 78% of Revlon, Inc.’s outstanding Class A and Class B common
stock.

c. Facts
● Penetrated the market by selling nail polish Door-to-Door since the early stages of the
foundation.
● Revlon nail coating was manufactured by a distinguished pigments.
● Ronald Perelman wholly owned MacAndrews and Forbes Holdings, Inc.
● Revlon is environmentally friendly by integrating the recycle packaging of Pure Blends.

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 II. Vision and Mission

a. Vision:
Revlon is a global color cosmetics, hair color, beauty tools, fragrances, skincare,
antiperspirant/deodorants, and beauty care products company whose vision is Glamour,
Excitement, and Innovation through high quality products at affordable prices.

b. Mission:
Revlon’s mission is to emerge as the leader in cosmetic and personal care
throughout the world. Revlon takes pride in manufacturing the top skin care products and
strives to please young and older woman alike.

c. Evaluation
Vision:
Revlon’s vision statement could be improved if the company future growth is
mentioned.
Mission:
Revlon’s mission statement could be evaluated by measuring the nine
components.

No. Components
1 Customers Yes
2 Products/Services Yes
3 Market Yes
4 Technology No
5 Concern for survival, growth and profitability Yes
6 Philosophy No
7 Self-concept No
8 Concern for public image No
9 Concern for employees No

The mission statement could be enhanced by having more broad scope. Revlon
shall demonstrate their used technologies, self-concept and philosophy. In addition, it
shall reflect social responsibility for glowing public image. Moreover, it shall focus on
the employees’ competencies and skills.

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 III. Revlon’s Organization Chart

President and
CEO

Finance Marketing Operations Administration Science

Senior VP Canada

Senior VP U.S.Region

Senior VP Latin
America Region

Senior VP Asia Pacific

Region

Senior VP Europe,
Middle East and Africa

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 IV. Input Stage

a. Internal Environment
i. Internal Audit

Strengths
Social responsible company as it supports
women’s health programs and other
community activities.
Well established research and development
programs
Improved operating efficiency and better
utilization of capital assets
Having online stores
Continuous development of new products
Wide range of products
Availability of high quality products at
affordable prices
Powerful goodwill
Main customers are department stores and
chain drug stores.
Environmentally friendly by using recycling
packages
Weaknesses
Excessive long-term debt
Comparatively lower net sales than
competitors
Less diversified portfolio
Lack of financial resources
Less attention to financial position
improvement
Shorter life of some products
Unadvised diversification in health products
caused loss of grounds in cosmetics
Forced reduction of promotional budget to
decrease operational costs
Expensive new brand
Decreased total assets because of excess
liabilities

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 ii. Internal Factor Evaluation Matrix
Ratin
Internal Factor Weight Weighted Score
g
Strengths
Social responsible company as it supports
S1 women’s health programs and other community 0.06 4 0.24
activities.
Well established research and development
S2 0.08 3 0.24
programs
Improved operating efficiency and better
S3 0.05 3 0.15
utilization of capital assets
S4 Having online stores 0.04 4 0.16
S5 Continuous development of new products 0.06 4 0.24
S6 Wide range of products 0.04 3 0.12
Availability of high quality products at
S7 0.08 4 0.32
affordable prices
S8 Powerful goodwill 0.04 3 0.12
Main customers are department stores and chain
S9 0.02 4 0.08
drug stores.
Environmentally friendly by using recycling
S10 0.03 4 0.12
packages
Weaknesses
W1 Excessive long-term debt 0.1 1 0.1
W2 Comparatively lower net sales than competitors 0.04 2 0.08
W3 Less diversified portfolio 0.06 2 0.12
W4 Lack of financial resources 0.07 2 0.14
W5 Less attention to financial position improvement 0.06 2 0.12
W6 Shorter life of some products 0.04 2 0.08
Unadvised diversification in health products
W7 0.06 2 0.12
caused loss of grounds in cosmetics
Forced reduction of promotional budget to
W8 0.02 1 0.02
decrease operational costs
W9 Insecure employees 0.03 2 0.06
Decreased total assets because of excess
W10 0.02 2 0.04
liabilities
Total 1 2.67

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 iii. Financial Analysis

1. Revlon’s Consolidated Statement of Operations ($ in millions,

except per share data)
12/2010 12/2009 12/2008 12/2007
Operating Revenue $1,321.40 1,295.90 1,346.80 1,400.10
Total Revenue 1,321.40 1,295.90 1,346.80 1,400.10
Adjustment to Revenue 0.00 0.00 0.00 0.00
Cost of Sales 389.70 408.10 404.60 425.50
Cost of Sales With Depreciation 455.30 474.70 490.90 522.90
Gross Margin 931.70 887.80 942.20 974.60
Gross Operating Profit 931.70 887.80 942.20 974.60
R&D 0.00 0.00 0.00 0.00
SG&A 666.60 629.10 709.30 748.90
Advertising 0.00 0.00 0.00 0.00
Operating Profit 199.80 170.80 155.00 121.00
Operating Profit Before Depreciation (EBITDA) 265.10 258.70 232.90 225.70
Depreciation 65.60 66.60 86.30 100.70
Depreciation Unreconciled 0.00 0.00 0.00 0.00
Amortization 0.00 0.00 0.00 3.30
Amortization of Intangibles 0.00 0.00 0.00 0.00
Operating Income After Depreciation 199.50 192.10 146.60 125.00
Interest Income 0.50 0.50 0.70 2.00
Earnings From Equity Interest 0.00 0.00 0.00 0.00
Other Income, Net −23.60 −21.50 −6.80 8.60
Income Acquired in Process R&D 0.00 0.00 0.00 0.00
Interest Restructuring and M&A 0.30 −21.30 8.40 −7.30
Other Special Charges 0.00 0.00 0.00 −0.10
Total Income Avail for Interest Expense (EBIT) 176.70 149.80 148.90 128.20
Interest Expense 96.90 93.00 119.70 136.30
Income Before Tax (EBT) 79.80 56.80 29.20 −8.10
Income Taxes −247.20 8.30 16.10 8.00
Minority Interest 0.00 0.00 0.00 0.00
Preferred Securities of Subsidiary Trust 0.00 0.00 0.00 0.00
Net Income From Continuing Operations 327.00 48.50 13.10 −16.10
Net Income From Discontinued Operations 0.30 0.30 44.80 0.00
Net Income From Total Operations 327.30 48.80 57.90 −16.10

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 2. Revlon’s Consolidated Balance Sheets ($ in millions, except per
share data)
12/2010 12/2009 12/2008 12/2007
Assets
Cash and Equivalents $76.70 54.50 52.80 45.10
Restricted Cash 0.00 0.00 0.00 0.00
Marketable Securities 0.00 0.00 0.00 0.00
Accounts Receivable 197.50 181.70 169.90 196.20
Loans Receivable 0.00 0.00 0.00 0.00
Other Receivable 0.00 0.00 0.00 0.00
Receivables 197.50 181.70 169.90 196.20
Raw Materials 39.70 42.70 57.60 58.60
Work In Progress 9.90 12.00 16.60 17.40
Purchased Components 0.00 0.00 0.00 0.00
Finished Goods 65.40 64.50 80.00 89.70
Inventories -Adj Allowances 0.00 0.00 0.00 0.00
Inventories 115.00 119.20 154.20 165.70
Prepaid Expenses 47.30 44.30 51.60 47.60
Current Deferred Income Taxes 39.60 3.90 0.00 0.00
Other Current Assets 0.00 0.00 0.00 16.60
Total Current Assets 476.10 403.60 428.50 471.20
Gross Fixed Assets (Plant, Prop. & Equip.) 301.00 324.80 310.10 311.70
Accumulated Depreciation & Depletion 194.80 213.10 197.30 199.00
Net Fixed Assets 106.20 111.70 112.80 112.70
Intangibles 0.00 0.00 0.00 0.00
Cost in Excess 182.70 182.60 182.60 182.70
Noncurrent Deferred Income Taxes 229.40 4.80 0.00 0.00
Other Noncurrent Assets 92.30 91.50 89.50 122.70
Total Noncurrent Assets $610.60 390.60 384.90 418.10
Total Assets 1,086.70 794.20 813.40 889.30
Liabilities
Accounts Payable $88.30 82.40 78.10 88.50
Notes Payable 0.00 0.00 0.00 0.00
Short Term Debt 11.70 13.90 19.40 8.20
Accrued Expenses 0.00 0.00 0.00 243.00
Accrued Liabilities 218.50 213.00 225.90 0.00
Deferred Revenues 0.00 0.00 0.00 0.00
Current Deferred Income Taxes 0.00 0.00 0.00 0.00
Other Current Liabilities 0.00 0.00 0.00 9.00
Total Current Liabilities 318.50 309.30 323.40 348.70
Long-Term Debt 1,159.30 1,186.20 1,310.20 1,432.40
Capital Lease Obligations 0.00 0.00 0.00 0.00
Deferred Income Taxes 0.00 0.00 0.00 0.00
Other Noncurrent Liabilities 257.20 284.30 292.60 190.20
Minority Interest 0.00 0.00 0.00 0.00
Preferred Securities of Subsidiary Trust 0.00 0.00 0.00 0.00
Preferred Equity outside Stock Equity 48.10 48.00 0.00 0.00
Total Noncurrent Liabilities 1,464.60 1,518.50 1,602.80 1,622.60
Total Liabilities $1,783.10 1,827.80 1,926.20 1,971.30
Preferred Stock Equity 0.00 0.00 0.00 0.00
Common Stock Equity −696.40 −1,033.60 −1,112.80 −1,082.00
Common Par 0.50 0.50 0.50 0.50
Additional Paid In Capital 1,012.00 1,007.20 1,000.90 994.10
Cumulative Translation Adjustment 0.00 0.00 0.00 0.00
Retained Earnings −1,551.40 −1,878.70 −1,927.50 −1,985.40
Treasury Stock −7.20 −4.70 −3.60 −2.50
Other Equity Adjustments −150.30 −157.90 −183.10 −88.70
Total Equity $−696.40 −1,033.60 −1,112.80 −1,082.00
Total Capitalization 462.90 152.60 197.40 350.40
Total Liabilities & SEquity $ 1,086.70 794.20 813.40 889.30

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 3. Revlon Sales by Geographic Area and Product Category ($ in
millions)

Year Ended Dec. 31

2008 2009 2010
Geographic area
Net sales
United States $ 782.6 58% $ 747.9 58% $ 729.1 55%
International 564.2 42% 548.0 42% 592.3 45%
$ 1346.8 $ 1295.9 $ 1321.4

Year Ended Dec. 31

2008 2009 2010
Classes of similar products
Net sales
Cosmetics, Skin care, and Fragrances $ 831.0 62% $ 785.5 61% $ 816.1 62%
Personal care 515.8 38% 510.4 39% 505.3 38%
$ 1346.8 $ 1295.5 $ 1321.4

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 b. External Environment

i. Porter's five forces analysis

1. Threat of new entry

Because of the huge budget required to enter the cosmetics market, industry of
cosmetics has low threat of new entrants. In addition, being a unique in the cosmetics
market is not easy because it requires a lot of resources and the competitors are old
enough with huge experience in this field. Moreover, the market share is not limited to
the large competitors, there are other competitors in small scale who affect the
profitability of firms in the industry.

2. Bargaining power of customers

Because of the numbers of competitors in cosmetics’ industry is increasing in

addition to the variety of manufacturers’ product availability, the bargaining power of
customers is high and this challenge is worldwide.

3. Bargaining power of suppliers

Bargaining power of suppliers is low in the cosmetics market due to the number
of market players and high numbers of supplier of diverse product. In addition, product
can be developed by both large and small scale manufacturers, therefore, the power to
influence the prices in the market is controlled by the customers not the suppliers.

4. Threat of substitutes

Cosmetics industry is huge and there are variant products which are developed by
either large or small manufacturers. Therefore, the availability of threat of substitute
products is high. In order to overcome this challenge by the market players, innovation
and creativity are must.

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 5. Rivalry among existing competitors

Although the barriers to enter cosmetic industry are too high, the barriers to exist
cosmetics industry are high too. This is because of the huge investment required to enter.
In addition, high number of competitors, consumers can switch brands easily, competitors
sell similar products/services and rivals have excess capacity make the rivalry among
existing competitors is high.

ii. External Audit

Opportunities Threats
Cosmetic market is not limited to women but Fierce competition from other brands
market of men is potential.
Population around the world is growing rapidly Global economic crisis
compared to USA population.
Won freedoms in many countries in Africa like Some retailers are selling their own brands such as
Egypt, Libya, Algeria and Tunisia increase interest GAP and Victoria Secret.
among women.
Cosmetic industry is being entered by old age Retailers are reducing inventory levels
women
Aging population is a significant market for aging Wide range of substitute product availability
cosmetics.

Hair coloring market has enlarged with teenagers
wanting more vibrant color options
Baby boomers have high levels of disposable
income and are brand loyal customers
Social media is now utilized for promotion
Interested in purchasing cosmetics and fragrances
is increasing rapidly among Asian women
especially in China, India and Middle East.
Dynamic makeover increase the demand of beauty
products
Increased Environmental concerns
Increased consumer worries about product safety
and use of animal testing by cosmetic companies.
Availability of competing brands’ products with
relatively low prices
Global ethnic-racial issues
Online Social media campaigns

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 iii. External Factor Evaluation Matrix

External Factor Weight Rating Weighted Score

Opportunities
O1 Cosmetic market is not limited to women but 0.05 2 0.1
market of men is potential.
O2 Population around the world is growing rapidly 0.09 3 0.27
compared to USA population.
O3 Won freedoms in many countries in Africa like 0.07 4 0.28
Egypt, Libya, Algeria and Tunisia increase interest
among women.
O4 Cosmetic industry is being entered by old age 0.02 2 0.04
women
O5 The potential for sales of personal care products 0.04 3 0.12
around the world is excellent
O6 Hair coloring market has enlarged with teenagers 0.04 3 0.12
wanting more vibrant color options
O7 Baby boomers have high levels of disposable 0.02 1 0.02
income and are brand loyal customers
O8 Social media is now utilized for promotion 0.06 4 0.24
O9 Interest in purchasing cosmetics and fragrances is 0.04 3 0.12
increasing rapidly among Asian women especially
in China, India and Middle East.
O10 Dynamic makeover increase the demand of beauty 0.06 4 0.24
products
Threats
T1 Fierce competition from other brands 0.1 2 0.2
T2 Global economic crisis 0.02 1 0.02
T3 Some retailers are selling their own brands such as 0.03 2 0.06
GAP and Victoria Secret.
T4 Retailers are reducing inventory levels 0.02 2 0.04
T5 Wide range of substitute product availability 0.09 2 0.18
T6 Increased Environmental concerns 0.04 4 0.16
T7 Increased consumer worries about product safety 0.08 2 0.16
and use of animal testing by cosmetic companies.
T8 Availability of competing brands’ products with 0.06 1 0.06
relatively low prices
T9 Global ethnic-racial issues 0.02 2 0.04
T10 Online Social media campaigns 0.05 2 0.1
Total 1 2.57

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 V. Matching Stage

a. Porter’s Five Generic Strategies

Type1: Cost Leadership-Low cost

Type2: Cost Leadership-Best value
Type3: Differentiation
Type4: Focus-Low cost
Type5: Focus-Best value

Generic Strategies

Cost Leadership Differentiation Focus

Size of Market

Type1
Large Type3 -
Type2

Type4
Small - Type3
Type5

Since the cosmetics market is too large worldwide and Revlon vision is Glamour, Excitement,
and Innovation through high quality products at affordable prices, Revlon follows Type2
strategy. Type2 strategy is a best-value strategy that offers products or services to a wide range
of customers at the best price-value available on the market; the best-value strategy aims to offer
customers range of products or services at the lowest price available compared to rival’s products
with similar attributes.

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 b. SWOT Matrix
Strengths Weaknesses
Social responsible company as it supports
S1 women’s health programs and other community W1 Excessive long-term debt
activities.
Well established research and development
S2 programs W2 Comparatively lower net sales than competitors
Improved operating efficiency and better
S3 utilization of capital assets W3 Less diversified portfolio

S4 Having online stores W4 Lack of financial resources

S5 Continuous development of new products W5 Less attention to financial position improvement
S6 Wide range of products W6 Shorter life of some products
Availability of high quality products at Unadvised diversification in health products caused loss
S7 affordable prices W7 of grounds in cosmetics
Powerful goodwill Forced reduction of promotional budget to decrease
S8 W8 operational costs
Main customers are department stores and chain
S9 drug stores. W9 Insecure employees
Environmentally friendly by using recycling
S10 packages W10 Decreased total assets because of excess liabilities

Opportunities SO strategies WO strategies

Cosmetic market is not limited to S2S5S7 O5O9: Introduce developed personal care products W1W7W10 O1O2O6: aiming new emerging markets with attention
O1 women but market of men is to Asia especially in China, India and Middle East. to youth and men
potential. (Product development & Market development) (Market Development)
Population around the world is
O2 growing rapidly compared to USA S4S5 O6O8: creating Electronic Selling
W7W10 O8: offering low cost products by focusing on social media
population. (Forward Integration).
campaigns
Won freedoms in many countries in (Market Penetration)
Africa like Egypt, Libya, Algeria S9 O2: establish international supply chain with mega
O3 drug stores.
and Tunisia increase interest
among women. (Forward Integration)
Cosmetic industry is being entered
O4
by old age women
The potential for sales of personal
O5 care products around the world is
excellent
Hair coloring market has enlarged
O6 with teenagers wanting more
vibrant color options
Baby boomers have high levels of
O7 disposable income and are brand
loyal customers
Social media is now utilized for
O8
promotion
Interest in purchasing cosmetics
and fragrances is increasing rapidly
O9
among Asian women especially in
China, India and Middle East.
Dynamic makeover increase the
O10
demand of beauty products

Threats ST strategies WT strategies

Fierce competition from other S1S3 T1T5: Enhance the social responsibility by applying W1W7W10 T1T2: Eliminate the least productive line.
T1
brands more care of old age people worldwide, especially in USA. (Divestiture).
T2 Global economic crisis (Market penetration).
Some retailers are selling their own
T3 brands such as GAP and Victoria W3W4W5 T5T8: Forming a joint venture with a large Asian
Secret. S3 T2: Cost reduction. company.
Retailers are reducing inventory (Retrenchment). (Horizontal Integration).
T4
levels
Wide range of substitute product
T5 S7 T1T2T8: Regulate the market to be the most affordable W3W7W10 T11T5T8: Attract new customers and conserve existing
availability
T6 Increased Environmental concerns brand and best quality. customers by producing new but related products such as, Oral
(Cost leadership). care, Baby care and Hair care.
Increased consumer worries about
(Related diversification).
T7 product safety and use of animal
testing by cosmetic companies.
Availability of competing brands’
T8
products with relatively low prices
T9 Global ethnic-racial issues
T10 Online Social media campaigns

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 c. Internal External Matrix
IFE Weighted Score

Strong Average Weak

3-4 2-2.99 1-1.99

High 3-4 I II III

EFE Weighted Score

Medium 2-2.99 IV V VI

Low 1-1.99 VII VIII IX

Based on the results of Internal Factor Evaluation Matrix (Horizontal Axis) and External Factor
Evaluation Matrix (Vertical Axis), Revlon placed in V which is Hold and Maintain, the suggested
strategies are;

 Market Penetration.
 Product Development.

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 d. Boston Consulting Group Matrix
Stars Question Mark

High
Market Growth

Cash Cows Dogs

Low

High Low
Market Share

Currently Revlon is losing its market share and the competition is fierce in the cosmetics
industry. Therefore, Revlon fall in Question Mark Quarter which means Revlon needs to invest
to move. The strategy needed to achieve that is Market penetration Strategy.

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 e. The Grand Strategy Matrix

Rapid Market Growth

Quadrant II Quadrant I
Market Development Market Development
Market Penetration Market Penetration
Product Development Product Development
Horizontal Integration Forward Integration
Divestiture Backward Integration
Liquidation Horizontal Integration
Related Diversification
Weak Strong
Competitive Quadrant III Quadrant II Competitive
Position Retrenchment Related Diversification Position
Related Diversification Unrelated Diversification
Unrelated Diversification Joint Venture
Divestiture
Liquidation

Slow Market Growth

Revlon falls in Quadrant I of the Grand Strategy Matrix. It has an excellent strategic position
where continuous concentration on current markets is a suitable strategy. This could be obtained
by applying more marketing efforts (Market Penetration), moving to new geographic areas
(Market Development) or modifying or enhancing existing products (Product Development).

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 VI. The Decision Stage

a. Quantitative Strategic Planning Matrix

Market Development Product Development Market Penetration Related Diversification

Weight AS Rate TAS W*R AS Rate TAS W*R AS Rate TAS W*R AS Rate TAS W*R

Opportunities

O1 Cosmetic market is not limited to 0.05 2 0.1 1 0.05 1 0.05 1 0.05

women but market of men is
potential.
O2 Population around the world is 0.09 4 0.36 1 0.09 2 0.18 2 0.18
growing rapidly compared to
USA population.
O3 Won freedoms in many countries 0.07 4 0.28 2 0.14 2 0.14 3 0.21
in Africa like Egypt, Libya,
Algeria and Tunisia increase
interest among women.
O4 Cosmetic industry is being 0.02 1 0.02 1 0.02 3 0.06 1 0.02
entered by old age women
O5 The potential for sales of 0.04 4 0.16 4 0.16 3 0.12 1 0.04
personal care products around
the world is excellent
O6 Hair coloring market has 0.04 4 0.16 4 0.16 3 0.12 2 0.08
enlarged with teenagers wanting
more vibrant color options
O7 Baby boomers have high levels of 0.02 1 0.02 1 0.02 1 0.02 1 0.02
disposable income and are brand
loyal customers
O8 Social media is now utilized for 0.06 2 0.12 3 0.18 4 0.24 3 0.18
promotion
O9 Interest in purchasing cosmetics 0.04 4 0.16 1 0.04 2 0.08 2 0.08
and fragrances is increasing
rapidly among Asian women
especially in China, India and
Middle East.
O10 Dynamic makeover increase the 0.06 2 0.12 4 0.24 3 0.18 2 0.12
demand of beauty products
Threats

T1 Fierce competition from other 0.1 4 0.4 3 0.3 1 0.1 4 0.4

brands
T2 Global economic crisis 0.02 0 0 0 0 0 0 0 0

T3 Some retailers are selling their 0.03 0 0 0 0 0 0 0 0

own brands such as GAP and
Victoria Secret.
T4 Retailers are reducing inventory 0.02 0 0 0 0 0 0 0 0
levels
T5 Wide range of substitute product 0.09 2 0.18 3 0.27 1 0.09 3 0.27
availability
T6 Increased Environmental 0.04 0 0 0 0 0 0 0 0
concerns
T7 Increased consumer worries 0.08 1 0.08 4 0.32 2 0.16 1 0.08
about product safety and use of
animal testing by cosmetic
companies.
T8 Availability of competing brands’ 0.06 1 0.06 2 0.12 4 0.24 3 0.18
products with relatively low
prices
T9 Global ethnic-racial issues 0.02 0 0 0 0 0 0 0 0

T10 Online Social media campaigns 0.05 0 0 0 0 0 0 0 0

Total Opportunities + Threats 1

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 Market Development Product Development Market Penetration Related Diversification
Weight AS Rate TAS W*R AS Rate TAS W*R AS Rate TAS W*R AS Rate TAS W*R
Strengths
S1 Social responsible company as it 0.06 2 0.12 3 0.18 1 0.06 4 0.24
supports women’s health
programs and other community
activities.
S2 Well established research and 0.08 0 0 0 0 0 0 0 0
development programs
S3 Improved operating efficiency 0.05 3 0.15 2 0.1 1 0.05 2 0.1
and better utilization of capital
assets
S4 Having online stores 0.04 4 0.16 1 0.04 3 0.12 3 0.12
S5 Continuous development of new 0.06 2 0.12 4 0.24 4 0.24 4 0.24
products
S6 Wide range of products 0.04 3 0.12 3 0.12 2 0.08 3 0.12
S7 Availability of high quality 0.08 4 0.32 1 0.08 2 0.16 3 0.24
products at affordable prices
S8 Powerful goodwill 0.04 4 0.16 2 0.08 1 0.04 4 0.16
S9 Main customers are department 0.02 3 0.06 1 0.02 4 0.08 2 0.04
stores and chain drug stores.
S10 Environmentally friendly by 0.03 0 0 0 0 0 0 0 0
using recycling packages
Weaknesses
W1 Excessive long-term debt 0.1 1 0.1 2 0.2 3 0.3 3 0.3
W2 Comparatively lower net sales 0.04 0 0 0 0 0 0 0 0
than competitors
W3 Less diversified portfolio 0.06 0 0 0 0 0 0 0 0
W4 Lack of financial resources 0.07 0 0 0 0 0 0 0 0
W5 Less attention to financial 0.06 0 0 0 0 0 0 0 0
position improvement
W6 Shorter life of some products 0.04 1 0.04 3 0.12 2 0.08 1 0.04
W7 Unadvised diversification in 0.06 0 0 0 0 0 0 0 0
health products caused loss of
grounds in cosmetics
W8 Forced reduction of promotional 0.02 0 0 0 0 0 0 0 0
budget to decrease operational
costs
W9 Insecure employees 0.03 0 0 0 0 0 0 0 0
W10 Decreased total assets because of 0.02 1 0.02 1 0.02 4 0.08 2 0.04
excess liabilities
Total Strengths + Weaknesses 1
Total TAS 3.59 3.31 3.07 3.55

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 b. Strategy Formulation and Final Suggestions
Based on the results that QSPM reveals, our recommended strategies are as follows:

 Market Development is the ideal strategy to follow by accommodating new customers

and markets. Prospective customers and markets can include youth, men, old age
women, Asian, Arab African, Latin American, Africa, USA Hispanic and Eastern
Europe. This will improve Revlon market share and financial position and
consequently reduce the excessive long-term debt.
 Related Diversification is the secondary strategy. Revlon has the chance to attract new
customers and conserve existing customers by producing new but related products such
as Oral care, Baby care and Hair care.

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