You are on page 1of 17

Introduction

• Revlon’s product categories include skin care, cosmetics, personal care, fragrance and professional products. • Major competitors are P & G, Avon Products, Estee Lauder Companies, L’Oreal and Unilever. • Revlon has struggled in recent years and has a debt of almost $2.3 billion. • Revlon is continuously losing its market share.

Revlon Brand 19.2% 5.7% .5% 13.0% 6.4% 1.1% 0.0% 14.9% 24.3% Change -2.4% 27.3 -1.5 -2.4% Q 2 of 2006 22.4% -0.Revlon’s Market Share Percent Q 2 of 2007 Color Cosmetics a.9 b.3% 9.2 -0.4 11. Vital Radiance Brand Women’s Hair Color Antiperspirants/ Deodorants Revlon Beauty Tools 6.0% 6.0% 2. Almay Brand c.5 -0.

1 0.1 2 0.03 2 0.07 2 1 1 1 0.07 0.15 Rating 2 Weighted Score 0.06 0.2 .08 0.S.10 0.1 0.External Factor Evaluation Matrix Opportunities Growing market for baby boomers Growing U. teen market Ethnic/racial make-up for Hispanic women/Asians High potential in Asian and Latin American countries Men using the cosmetic products Women in China.08 0. India and Middle East are rapidly growing Interested in purchasing more cosmetics and fragrances People in the mature market (55 and older) Weight 0.30 0.20 0.

08 3 0.66 .External Factor Evaluation Matrix Threats Weight Rating Weighted Score Older people spend less on cosmetics Rising gas prices are reducing disposable income of people Devaluation of the Dollar Intensity of competition 0.12 2 0.24 TOTAL 1.12 1 0.05 0.05 1 0.24 0.12 0.00 1.

30 2.20 Rating 1 Score 0.Competitive Profile Matrix Revlon Critical Success Factors Weighted Estee Lauder Weighted Unilever Weighted Weight Market Share Price Competitiveness Financial Position Product Quality Consumer Loyalty Total 0.20 Rating 3 Score 0.00 2 0.60 0.75 2 0.45 2.30 3 3 0.50 0.15 1 2 0.25 0.55 2 0.45 3 0.15 1.45 0.25 2 0.30 1.50 0.25 0.75 .75 0.30 2 2 0.60 Rating 3 Score 0.50 3 0.

20 0.00 1 1 0.1 2 2 0.31 .13 0.1 0.15 0.15 1.05 2 4 3 3 4 3 0.15 0.48 0.15 2.Internal Factor Evaluation Matrix Critical Success Factors STRENGTHS A strong established brand image Continuous product innovation and R&D Re-structured organizational structure Efficiency in operation due to consolidation of production facilities Strong distribution network globally Active participation in women's health programs WEAKNESSES Long-term debt problem Failure of vital radiance No direct selling Low market share TOTAL Weight Rating Weighted Score 0.12 0.30 0.13 0.20 0.1 0.05 0.15 0.05 0.40 0.15 0.

0 to 1.99 Revlon .0 to 2.The IE Total Weighted Score Strong 3.0 Average 2.99 Medium The EFE Total Weighted Score 2.0 to 3.99 IV V VI Low VII VIII IX 1.0 to 2.99 High I II III 3.99 Weak 1.0 to 1.0 to 4.

Continuous product innovation and R&D 2. Active participation in women's health programs S-O Strategies W-O Strategies 1. T4) W-T Strategies 1. O6) mature/professional women (W4. Devaluation of the Dollar 4. Strong distribution network globally 6. 2. Ethnic/racial make-up for hispanic women/Asians 4. Growing market for baby boomers 2. O6) 2. increase the market share by catering to baby boomers and mature/professional the market of baby boomers and women (S2. Growing market for mature/professional women Threats 1. High distribution network should be used to tap markets in Asian and Latin American countries (S5. Intensity of competition . O1. Market for men 6. Failure of vital radiance 3. Low market share of production facilities 5. O1. A strong established brand image 1. Rising gas prices are reducing disposable income of people 3. Re-structured organizational structure 3. Continuous product innovation and R&D for 1. Growing market for teens 3. innovate products relevant to growing segments to deal with intense competition (S1. High potential in Asian and Latin American markets 5. Efficiency in operation due to consolidation 4. Older people spend less on cosmetics S-T Strategies 1. Long-term debt problem 2.TWOS Matrix Strengths Weaknesses 1. No direct selling 4. O4) Opportunities 1.

O1. T4) . O1. O6) High distribution network should be used to tap markets in Asian and Latin American countries (S5. O4) increase the market share by catering to the market of baby boomers and WOmature/professional women (W4.Continuous product innovation and R&D for baby boomers and SO mature/professional women (S2. O6) innovate products relevant to growing segments to deal with intense ST competition (S1.

Space Matrix Conservative FS +6 +5 +4 +3 +2 +1 +0 Aggressive CA -5 -4 -3 -2 -1 -1 -2 -3 -4 -5 -6 +0 +1 +2 +3 +4 +5 IS Defensive ES Competitive .

0 4.0 INDUSTRY STRENGHTS Growth Potential Profit Potential Ease of entry into the market Resource Utilization RATINGS 5.0 1.0 3.0 1.0 .0 15.0 7.0 3.FINANCIAL STRENGHTS Operating Income Net Income Working Capital Inventory Turnover EPS RATINGS 1.0 3.0 1.

0 -3.0 -3.0 COMPETITIVE ADVANTAGE Control over suppliers and distributors Market Share Customer Loyalty Product Life Cycle RATINGS -3.0 -4.0 -5.0 -3.0 -3.0 -16 .0 -19.0 -3.0 Product Price -4.ENVIRONMENTAL STABILITY Price elasticity of demand Competitive Pressure Demand Variability Price Range of Competing Firms Risk involved in business RATINGS -4.

20 FS average is +7/ 6 = +1. .• ES average is -19/ 5 = -3.17)= -2. market development.80 IS average is +15/ 4 = +3.75 • CA average is -16/5 = -3. and product development.80 + (+1. forward and horizontal integrations. market penetration.55 • y-axes : -3.63 • From the above analysis and diagram we can conclude that the best strategy for Revlon is competitive strategy which contains backward.17 • x-axes : -3.20 + (+3.75 )= +0.

Grand matrix RAPID MARKET GROWTH Quadrant II Quadrant I Revlon WEAK COMPETITIVE POSITION Target STRONG COMPETITIVE POSITION Quadrant III SLOW MARKET GROWTH Quadrant IV .

According to this quadrant the Revlon needs strategies such as       Market development Market penetration Product development Horizontal integration Divestiture Liquidation . • Revlon is in Quadrant II. Unilever. the major competitors such as P & G. L’Oreal are much stronger than Revlon.• The market worldwide is growing however.

15 ---3.00 3.20 ------1.00 3.56 .05 0.30 0.05 3.00 1.15 1.45 2.14 4.30 0.00 0.20 0.45 ------0.00 ---0.60 0.13 0.10 0.00 ---3.00 3.00 0.10 0.05 WEAKNESSES Long-term debt poblem Failure of vital radiance No direct selling Low market share SUBTOTAL 0.00 ------0.Quantitative Strategic Planning Matrix Critical Success Factors Weight Joint venture Retrenchment Strategic Alternatives and partnering AS TAS AS TAS STRENGTHS A strong established brand image Continuous product innovation and R&D Re-structured organizational structure Effeciency in operation due to consolidation of production facilities Strong distrinbution network globally Active participation in women's health programs 0.05 3.00 ------3.10 2.36 ---0.12 0.15 0.00 2.15 0.00 2.00 0.00 2.10 0.15 0.24 0.00 0.

00 1.10 0.10 0.15 0.84 1.08 0.45 ---0.10 0.Critical Success Factors Weight Joint venture and partnering AS TAS 0.00 TAS 0.24 0.10 AS 1.00 3.36 1.10 0.20 0.70 3.00 1.00 1.00 0.05 ---0.10 3.00 1.07 0.14 0.00 1.08 0.10 Retrenchment Opportunities Growing market for baby boomers Growing market for teens Ethnic/racial make-up for hispanic women/Asians High potential in Asian and Latin American markets Market for men Growing market for mature/professional women 0.12 1.00 2.05 0.00 ---2.07 0.00 1.15 0.00 ------0.05 0.00 1.15 0.16 0.00 ---2.00 1.15 ------0.36 .00 Threats Older people spend less on cosmetics Rising gas prices are reducing disposible income of people Devaluation of the Dollar Intensity of competition SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE 0.08 0.80 2.00 3.

7098.3/.80902.70-.574108843..70941-.70.3/  2..3.4203 $     /897-:9433094784:/-0:80/949.3.907394902.52.9:70.--442078.709838.93 207.4:39708 $   3.

.90574/:..4203      334.42509943 $ %  .574108843.9390380 $% .98700.3994743802039894/0.

.$5.0.97 43807..0                  $      01038.0 $ 425099.0 $  7088.9.0 .

420 093.93 3.80410397394902. !7419 !49039.709 #084:7.07 !$ #%$       &$%# $%#%$ 749 !49039. $%#%$ 507.943 #%$      .59.0&9.420 473.03947%:734. . 3.

941/02.0 #%$       .3/'.-9 !7.0/3-:83088 #%$        !%%' '% 43974 4.0 !74/:.0#.709$.3041425093728 #83.078:55078.7.89.9 !74/:.'# % $%% !7.3/ 425099.70 :8942074.4.0 !7088:70 02.910.3/ /897-:9478 .9!7.0 0.

W $.07..08 .

   $.08 ..07.

07.   W ..08 .

08 .07.   $..

9438 2.0.08              W 74290.990-089897.3907.425099.7.0452039 .943 2...3/574/:.0452039 .3.439.88.:/09..38-.08     W  ..90147#0.7/  147.0897.3 .709/0.438 .20.3//.7/.90.3/47439.-4.9 /0.709 503097.   W  .43.

7./7.39 $ #% # % ":.709 $%#   !%%' ! $%  ":.97 #!#% # % ":.39 #0.39' ./7./7./7.43   !%%' ! $%  %.3/2.39 ":.

702:.709/0.0452039 .709503097.0452039 47439..07  70..07 902../7.3907.943 !74/:.W %02.8 N N N N N N .39 90#0.4383":.943 .0899:70 6:/.4250994788:.943 ./7.47/394986:.90088:.70947//0874340..39 . 89743079.3#0.9/0.47 .43300/8897.43 W #0.8!  &30.

70 $&% %                  ..":.0$97.897:. 34507.94341 574/:..4384/./.3/#  #0 897:.9073.9.9431.$:..28           $$$ 43 9072/0-954-02 .399.7..3.943.9478 09 439.:7041.333.79.5.9803 42.9.0 4/70.90.9.9:70/47.95747.943/:094.9.2039 $97.039:70 #09703.088.793073 $         %$     $   %$   $%#%$ 89743089.!.03.7098.-80/-7.08 .97 79.0 4393:4:8574/:.3/5. ..3/2.943.05.90.9334.94334203 80.3.908 $9743/8973-:943 309474-.9:70 110.

709147-.9478 09 439.793073 $ %$      #09703.2039 55479:3908 7432...--442078 7432.3/5.70914790038 93.$:..088.039:70 .79.

7.2... 4203.3.0 :514785.

8.93207.38 549039.3.38.7098 .709147203 7432.3/..7091472.32.9:70.

48209.4203       $    %$               %70.08.7 39038941.574108843.8 #83.4204150450 0.98 /07504508503/08843.857.94341904.:.42509943 $&% % $&% %%%#%'$$$ #                       ..7070/:.3/8548-0 3.