UNIVERSITY OF CENTRAL PUNJAB ASSIGNMENT NO.1 SUBMITTED TO: Prof.

ISHFAQ AHMAD SUBMITTED BY: AYESHA MIR SUNDAS MIR SHAHRAIZ NASIR RAMIZ SHAHID REHAN AHMED ROHAIL RAZZAQ TOPIC:

REVLON CASE STUDY

3 billion. Italy. the product was not highly acceptable in the market because of the fact that it was expensive in comparison to the other products that Revlon was selling at its major retailers (Wal. SHOULD REVLON CONCENTRATE ITS EFFORTS ON INTERNATIONAL MARKETS. A much wiser decision would be to enter into joint venture with one of its competitors who are selling . The company should continue to expand in the United States. The company may be struggling.Mart and Wallgreens). This option should be opted for the sub±continental and Latin American markets. SHOULD REVLON DIVERSIFY ITS OPERATIONS OR DEVELOP JOINT VENTURES WITH OTHER COSMETICS COMPANIES? WOULD JEWELLERY BE A GOOD INDUSTRY TO ENTER GIVEN THE AGING SOCIETY? Looking into the current scenario according to the case study. in this situation it would not be a wise decision for Revlon to enter into diversification or in other words diversify its product line. Revlon wanted to launch a new prestige fragrance FLAIR in 2006 but delayed this idea of theirs as they were unable to come out of their recent debts due to the recent launches that they did. Of approx. GIVEN THE LOW VALUE OF DOLLAR AND COMPETITIVE PRESSURES? WHAT COUNTRIES SHOULD REVLON FOCUS ON? Revlon should continue to pursue efforts internationally even given the low value of the dollar and the competition. Reason being recently when Revlon launched VITAL RADIANCE LINE eye shadows in 2006 in the price range of $12-$19 for the older class of women. Revlon should focus on countries in Europe and Asia where the majority of the fashion world is located. The company may also reorganize its international operations by appointing distributor setup and windup its presence in the higher costing markets. maybe choosing some different target groups as the current targets do not seem to be responding as well as they would like. but the products are already known in the 100 countries that Revlon currently has markets in. Japan and China would be good starting countries as these are all fashion capitals. England. 2. France. .Inc. Revlon is going through a great debt of $2.110M.1. In response to this Revlon had to discontinue the Vital Radiance in sep.2006 which left a negative impact on Revlon. Cosmetics and beauty products go hand in hand with fashion trends and would probably quickly align with this type of market.

access to greater resources. Coming up with this concept. SHOULD REVLON AGREE TO SELL ITSELF TO PERLMAN OR TO A RIVAL FIRM? WHAT IS REVLON¶S WORTH ON THE MARKET? ³Revlon is a company in trouble´. cosmetics. increased capacity of production. Net sales according to the geographic areas have shown a decline in the US market from 61% in 2004 to 59% in 2005 and to 57% in the year 2006. 41% in 2005 and 43% in 2006. dyes etc). personal and beauty care products. that too in the aging society would be a really bad idea since the target audience is baby boomers who are at a level where they would not enjoy wearing funky style jewellery pieces. gems.similar range of products as that of Revlon. Entering into the jewelry industry is in other words is diversifying itself by entering into a new line of products. sharing of risks and costs with a partner. and to attract this class of people Revlon would have to produce a high class jewellery with lots of antique styles made out of gold. cosmetics and personal care is not an industry for women only. which Revlon with the current state of debts would not be able to afford to produce at any cost. including specialized staff. white gold. Even after its operations in 100 countries with a vast range of skin care. fragrances and professional products. This will give an access to new markets and distribution networks. concepts and a totally new and wider range of health. A joint venture will increase the level of flexibility of working at a wider scope with a wider range of ideas. the case is somewhat opposite with regard to the International market where the net sales have been 39% in 2004. Consumers have become more health and beauty conscious over the years. men purchase personal care . Revlon product¶s market share has fallen since the second quarter of 2006-2007. 3. To sum up the whole question diversifying and entering the jewelry industry both if implemented by Revlon will make them face severe consequences in the form of lost reputation and a lost worth in the market with lots of more debt bundling onto them. personal care. which is not again a very healthy sign for Revlon as its all recent launches have not been a great success. However. diamonds etc. technology and finance. their concentration have moved more towards the personal care products (skin creams.

cosmetics. after being sold to L¶Oreal. all its competitors are in the upfront with much better financial positions in terms of revenues and sales.790 8. hair care etc.747.2 in the year 2006.464 Revlon should sell itself to L¶Oreal since it¶s the world¶s largest cosmetics firm which had recently held 7. Even though the advertising for Revlon was done in an effective manner but after being sold to L¶Oreal these products that recently were creating debt for Revlon might now under the name of L¶Oreal be able to be advertised properly through the L¶Oreal advertising spokespersons Beyonc Knowles and Katharine McPhee.9 6.741 14. to 38% in 2006. Therefore it would be a wise decision for Revlon to sell itself to L¶Oreal.149.533 8. Brands P&G L¶Oreal Avon Estee Lauder Sales ($) 2004 51.6 6.8 5.222 15. Due to this reason the net sales of the personal care products has increased from 33% in 2004.763. However this affected the net sales of cosmetics and fragrances to certain extend and the net sales declined from 67% in 2004 to 62% in 2006. The statement of operations shows very clearly that the operating income was going in a positive amount of $88.5 percent share of the market which after the acquisition of Maybelline made L¶Oreal the number two cosmetic firm in the United States.407 13. Due to its brand name and effective spokespersons L¶Oreal has been successful in making high sales over the last 3 years.641 7.5 in 2004 which gradually reduced to 64.9 in 2005 and finally ended up to a negative amount of $ -50. .280 2006 68.products in an effort to improve appearances. In comparison to Revlon. L¶Oreal is at present competing Revlon on all grounds on all the areas whether its fragrances. all those major products that Revlon had always wanted to sell to its customers but was unable to do so because of the debt crises that it was always facing after the launch of new products every time.742 2005 56.