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External Factor Evaluation Matrix (EFE) Opportunities Aging baby boomer make up a significant proportion of the adult U.

S population. Huge potential for sales in Asian market. Devaluation of dollar opening international markets for export. Men have started using cosmetic skin care products. Market for hair coloring has expanded especially among teenagers and adults Weight 0.12 0.17 0.08 0.07 0.04 Rating 1 2 2 2 3 Weighted Score 0.12 0.34 0.16 0.14 0.12

Threats Consumer's concern for product safety and use of animal testing. Declining disposable income resulting from rising gas prices.

Weight 0.06 0.10

Rating 2 2

Weighted Score 0.12 0.20

Major retailers have reduced inventory levels which has reduced shelf space for cosmetic products.
Intense competition in every product line from giant MNCs Shifting racial composition of American population.

0.12
0.19 0.05

2
2 2

0.24
0.38 0.10

Bargaining power of Buyers: Bargaining power of buyer is low because of Products have accepted branding and customers are not sensitive to price. There are large number of buyers which make relatively small purchases Threat of new entrant: Threat to new entrants are low because There are established brand identities in industry Lot of capital is required to enter in industry Threat of substitute: Threat of substitute is moderate because consumers can substitute branded cosmetics with homemade herbal cosmetics, but customers are not likely to substitute. Rivalry: Rivalry is moderate because: Competitors are diversified rather than specialized The industry is growing rapidly Customers have very low switching cost

Over all industry rating is favorable.

Actions based on EFE


1. 2. 3. 4. Start exporting the cosmetic products to Asian countries Develop new products for aging baby boomers Introduce products in small SKUs at affordable prices. Deliver products at customers doorstep by encouraging them to purchase online.

Internal Factor Evaluation Matrix (IFE) 1. 2. 3. 4. 5. 6. 7. Strengths Weight Revlon actively participates in CSR activities concerning women health issues. 0.04 Management saves $34 million every year through its cost cutting processes. 0.08 Centralized production facilities which resulted in better inventory control and 0.07 cost efficiency. Increased distribution capabilities resulting from acquiring Bionature S.A in 0.06 2000. Joint manufacturing with Pacific World Corporation of nail and nail care products 0.02 Effective advertising is one of the primary areas of promotion of Revlon products 0.06 through famous celebrities as Revlon spokespersons. Strong relationships with large mass merchandisers and chain drug stores such 0.09 as Walmart , K-Mart etc. Rating 3 4 4 3 Weighted Score 0.12 0.32 0.28 0.18

3
4 4

0.06
0.24 0.36

1. 2. 3. 4.

Weaknesses Debt accumulation of 2.3 billion, which is affecting business processes like delayed the launch of Flair fragrance. Poor product development and planning which resulted in failure of Vital Radiance product line (a cosmetic for older women). Weak financial resources, highly dependent on one financer Mac Andrew and Holdings. Poor financial performance due to declining sales pattern, declining assets and increasing liabilities.

Weight
0.17 0.09 0.15 0.17

Rating
1 1 1 1

Weighted Score
0.17 0.09 0.15 0.17

Actions based on IFE


1. Eliminate non profitable business units from its portfolio. 2. Invest in RnD department and conduct a market research to identify the demographic shifts and current customer needs and develop the product accordingly. 3. Joint venture with Walmart to strengthen the relationship. 4. Penetrate market through product promotion techniques for e.g. buy one get one free or discounts.

Competitive Profile Matrix (CPM) Revlon Critical Success Factors


Advertising Market Penetration Customer Service Store Locations R&D 0.09 0.08 0.05 0.06 0.10 4 3 3 2 1 0.36 0.24 0.15 0.12 0.10 3 4 3 3 3

PnG
0.27 0.32 0.15 0.18 0.30 4 4 4 4 3

Avon
0.36 0.32 0.20 0.24 0.30

Weight Rating Score Rating Score Rating Score

Employee Dedication
Financial Profit

0.05
0.11

2
1

0.10
0.11

3
4

0.15
0.44

3
3

0.15
0.33

Customer Loyalty
Market Share Product Quality Top Management Price Competitiveness

0.09
0.09 0.11 0.08 0.09

2
3 3 1 2

0.18
0.27 0.33 0.08 0.18

3
3 4 3 3

0.27
0.27 0.44 0.24 0.27

4
4 4 4 3

0.36
0.36 0.44 0.32 0.27

Totals

1.00

2.22

3.30

3.65

Actions based on CPM


1. Gain market share by developing new markets for their product in Asian countries through exports. 2. Develop new product for existing and new market at affordable price to gain price competitiveness.

TOWS
Opportunities Aging baby boomer make up a significant proportion of the adult U.S population. Huge potential for sales in Asian market. Devaluation of dollar opening international markets for export. Men have started using cosmetic skin care products, Market for hair colouring has expanded especially among teenagers and adults

1. 2.

3.

4. 5. 6. 7.

Revlon actively participates in CSR activities concerning women health issues. Management saves $34 million every year through its cost cutting processes. Centralized production facilities which resulted in better inventory control and cost efficiency. Increased distribution capabilities resulting from acquiring Bionature S.A in 2000. Joint manufacturing with Pacific World Corporation of nail and nail care products Effective advertising is one of the primary areas of promotion of Revlon products Strong relationships with large mass

1. Debt accumulation of 2.3 billio is affecting business processes delayed the launch of Flair frag 2. Poor product development an planning which resulted in fail Vital Radiance product line (a for older women).
3. 4.

Weak financial resources, highly de on one financer Mac Andrew and H Poor financial performance due to sales pattern, declining assets an

increasing liabilities

SO Strategies
1. Promote their products in Asian countries to increase export sales. (S6,O2,O3)
aging baby boomers. (S6, O4, O1)

WO Strategies

1. Invest in RnD department a develop new products for A market, aging baby boomer 2. Promote their products among men and O2, O1)

Threats
Consumer's concern for product safety and use of animal testing. Declining disposable income resulting from rising gas prices. Major retailers have reduced inventory levels which has reduced shelf space for cosmetic products. Intense competition in every product line from giant MNCs Shifting racial composition of American population.

ST Strategies

WT Strategies

1. Develop positive image through CSR 1. Start door to door selling to activities and stop testing their sales. (W4, T3) products on animals. (T1,S1) 2. Develop new products and 2. Introduce products in smaller SKUs differentiate from competit at affordable prices. (T2,S3,T4) W2)

Conservative

FP 7

Aggressive

CP -7 -6 -5 -4 -3 -2

-1 -1

IP 1 2 3 4 5 6 7

-2

-3

-4

-5

-6

-7

Defensive

SP

Competitive

Rapid Market Growth


Quadrant II Quadrant I

0
0

Weak Competitive Position

Strong Competitive Position

0 0

QSPM
1.
2. 3. 4. 5. Opportunities Weight Aging baby boomer make up a significant proportion of 0.12 the adult U.S population. Huge potential for sales outside U.S Japan Canada and 0.17 Euoropean countries especially in Asian market. Devaluation of dollar opening international markets for 0.08 export. 0.07 Men have started using cosmetic skin care products, Market for hair colouring has expanded especially 0.04 among teenagers and adults Weight 0.06 0.10

Forward Product Integration innovation


AS 2 TAS 0.24 AS 4 TAS 0.48

3
0 2

0.51
0.00 0.14

3
3 4

0.51
0.24 0.28

1
AS 0 3

0.04
TAS 0.00 0.30

4
AS 4 4

0.16
TAS 0.24 0.40

Threats 1. Consumer's concern for product safety and use of animal testing. 2. Declining disposable income resulting from rising gas

Forward Integration
1. 2. 3. Strengths Weight Revlon actively participates in CSR activities concerning women health 0.04 issues. Management saves $34 million every year through its cost cutting 0.08 processes. Centralized production facilities which resulted in better inventory control 0.07 and cost efficiency. Increased distribution capabilities resulting from acquiring Bionature S.A 0.06 in 2000. Joint manufacturing with Pacific World Corporation of nail and nail care 0.02 products Effective advertising is one of the promary areas of promotion of Revlon 0.06 products through famous celebrities as Revlon spokespersons. Strong relationships with large mass merchandisers and chain drug stores 0.09 such as Walmart , K-Mart etc. Weaknesses Debt accumulation of 2.3 billion, which is affecting business processes like delayed the launch of Flair fragrance. Poor product development and planning which resulted in failure of Vital Radiance product line (a cosmetic for older women). Weight 0.17 0.09 AS 0 3 3 3 0 3 1 AS 0 3 TAS 0.00 0.24 0.21 0.18 0.00 0.18 0.09 TAS 0.00 0.27

Product innovation
AS 0 2 1 2 0 3 2 AS 2 3 TAS 0.00 0.16 0.07 0.12 0.00 0.18 0.18 TAS 0.34 0.27

4.
5. 6. 7.

1.

2.

By investing in RnD and removal of unprofitable business will enable them to better understand about the dynamics of consumers and which helps them to innovate product, example: introduce new product to new market.