Revlon Inc was formed in 1932 with a USD:300/- investment.

Product categories include Skin Care, Cosmetics, Personal Care, Fragrance and Professional products. Some of the companys most recognized brand names include Revlon Ultimo, color stay, Almay, Charlie, Flex, Mitchum and Jean nate. Competitors: Procter and Gamble, LOreal, Uni-Lever, Avon products, Inc and Estee Lauder.

MISSION STATEMENT
To emerge as the dominant cosmetics and personal care firm in the twenty-first century by appealing to young / trendy women, health conscious women (skin care) and older women with its variety of brands.

VISION
Vision of Revlon is to provide glamour excitement and innovation of consumers through high quality products at affordable prices.

SWOT
Strengths:(1) Customer loyalty. (2) Continous research and development (3) Large scale and effective advertising (4) Iso 9002 certified for most of companys manufacturing plant. Weaknesses:(1) (2) (3) (4) Low employee morale because of unemployment due to re-structuring year 2000: 403 and in the year 2001: 1697 High debt. High selling and administration expenses 2001: 723.1 (93.05% of GP) Less utilization of capacity.

Opportunities:(1) (2) (3) (4) Large market locally and internationally. Equity markets are healthy. Customers are more willing to pay for cosmetics. Emerging market of Asia.

Threats:(1) (2) (3) (4)

Many customers are saving for their childrens college fees. Global Instability. Non-essential and expensive products. Tough Competition.

IFEM
Strengths (1)customer loyality (2)cont R&D (3)Advertising (4)ISO certification Weaknesses (1) (2) (3) (4) Total Conclusion Weighted Score indicates that Revlon is internally strong to support its strategies. Weight 0.10 0.20 0.15 0.10 0.2 0.05 0.10 0.1 Rating +4 +4 +3 +3 -1 -2 -1 -2 1.00 Weighted Score 0.40 0.80 0.45 0.30 0.2 0.10 0.10 0.2 2.55

EFEM
Opportunities (1) (2) (3) (4) (5) Threats (1) (2) (3) (4) Total Weight 0.20 0.05 0.2 0.1 0.15 0.10 0.10 0.10 1.00 Rating +3 +2 +4 +3 -2 -2 -1 -2 Weighted Score 0.60 0.10 0.8 0.3 0.30 0.20 0.10 0.20 2.60

Conclusion 2

Weighted Score 2.60 indicates that Revlon Inc would capitalize on opportunities and threats.

TWOS ANALYSIS
Strength (1) Customer Loyalty (2) Cont R&D (3) Large sale and effective advertising (4) ISO certification Weakness (1) Low employee morale because of unemployment due to restructuring (2) High debit/assets ratio 2000: 1.45 2001: 1.66 (3) High selling and administration expenses 2001: 723.1 (93.05% of GP) (4) Less Utilization of capacity WO Strategies (1) Divestiture (W3, W4, O2) Sell the division and invest in marketable securities. (2) Joint venture (W5, W4, O1, 03 and O5) Make joint venture with one of its competitors to produce brands through compliment of distinctive competencies. WT Strategies (1) Joint venture (W4, T2. T4) (2) Retrenchment (W2, T1, T4) Reduce cost through downsizing, sales of useless assets, reducing employee benefits etc.

Opportunities (1) Large market locally and internationally (2)Equity markets are healthy (3) Customers are more willing to pay for cosmetics (4) Emerging market of Asia

SO Strategies (1) Market penetration (S1, S2, O1) Increase the current usage of customers and number of customers through advertising, salesman ship and improved quality. (2) Change premium for unique products.

Threats (1) Many customers are saving for their childrens college fee. (2) Global instability. (3) Increasing credit card debt os customers. (4) Tough competition

ST Strategies (1) Development of products (S1. T1) Produce products with changes in color, size and orders etc . (2) Diversification (S1, S2, S3, T4) In future competition may become more tough so diversify in to different range of products e.g pharmaceutical (Horizontal diversification).

BCG MATRIX
MARKET SHARE

High 4.0 INDUSTRIES GROWTH High +10.0 D1, D2,

Avg 2.0 D3

Low 1.0

Star Cosmetics Fragnance Medium 0.0 D5, Low -10.0 Cow Skin care

Question Mark Personal care

Dog Professional D-4

Division 1 2 3 4 5

Sales (Millions) 400 300 300 200 121

Shares % 3.6 2.3 2.0 1.4 4.0

Growth % + 9.09 + 7.00 +10.00 - 10.00 - 8.30

GROWTH RATES YEAR 2000 (in thousand) $ 10,000 12,090 13,500 15,000 3,300 YEAR 2001 (in thousand) $ 11,000 13,000 15,000 13,500 3,025

D-1 D-2 D-3 D-4 D-5

9.09% 7.00% 10.00% -10.00% -8.30%

STRATEGIES
D1, D2, D3 4

Since market is in growth, share is high and competition is tough, Revlon has to penetrate with low cost and focusing on better quality of fragrances and cosmetics. D4 Such division is not working well. It is better to keep the cost low through downsizing, less advertising and better administrative control. D5 This unit is earning a lot of cash. Revlon should do backward integration to capture the market through economies of scale or use cash (generated in the division) in other division to improve their performance by purchasing the technology and hiring experts (who could develop new products through research)

SPACE MATRIX
FS +6 +5 +4 +3 +2 +1 CA -6 -5 -4 -3 -2 -1 -1 -2 -3 -4 -5 -6 ES FS 1. 2. 3. 4. +4 Return on investment +2 +5 Liquidity +3 +3 Working Capital +4 +4 Cash flow +3 +16 Average +4 Fs Average +3.5 5 +1 +2 +3 +4 +5 +6 IS

IS 1. 2. 3. 4. 5. +4 Growth Potential +4 +3 Profitability +3 +5 +4 Regulations +5 +5 Emerging Market +6 +25 Average +4.5

CA 1. 2. 3. 1 Research and development -1 4 Customer loyality -3 1 Market Share -4 -6 Technological Advantage -2 Average -2.5

ES 1. 2. 3. 4. 5 Technological Advancement -4 4 Global Instability -4 5 Increasing competition -5 6 Barrier to entry -3 -20 Average 4

ON X-AXIS 5-2 = +3 CA + IS = -2,5 + 4.5= +@ ON Y-AXIS -5+4 = -1 FS+ES = 3 + (-4) = -1 STRATEGIES Since opportunities are there along with market growth and competitive advantage through continous research and development therefore there is lot of market potential and Revlon should concentrate on developing products with reasonable cost through forward integration. This would help reduce cost in the long run in such a tough competition era.

QUANTITATIVE STRATEGIC PLANNING MATRIX

6

S.NO Strengths Efficient Sales Team Customer Loyalty Large scale and effective advertising High improved current ratio Weakness Low employee morale High debt/assets ratio High selling & admin.expenses Less utilization of capacity Opportunities Large market locally and internationally Equity markets are healthy Customers are more willing to pay for cosmetics Entry barrier exist High Growth Threats Many customers are saving for their childrens college fees Due to ever increasing price of oil, demand in developing countries may decline Global instability Tough competition Total

WEIGHT

MARKET PENETRATION AS TAS 4 3 3 1 1 2 0 3 1 1 4 1 3 2 3 1 3 0.4 0.6 0.45 0.1 0.2 0.10 0.00 0.3 0.20 0.05 0.8 0.1 0.30 0.3 0.3 0.10 0.30 4.3

MARKET DEVELOPMENT AS TAS 3 4 4 3 1 1 0 3 2 2 4 3 4 3 1 3 3 0.3 0.8 0.6 0.3 0.4 0.05 0.00 0.3 0.4 0.1 0.8 0.3 0.40 0.45 0.1 0.30 0.3 5.3

1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4

0.10 0.20 0.15 0.10 0.15 0.05 0.10 0.15 0.20 0.05 0.15 0.05 0.10 0.15 0.10 0.10 0.10

Strategy Market development should be done. The total scores are higher than market penetrations strategy score. Therefore market development is more desirable strategy. Revlon should go beyond its boundaries and find new markets of fragrances and cosmetic, specially in Middle East and Central Asia.

QUANTITATIVE STRATEGIC PLANNING MATRIX

S.NO Strengths Efficient Sales Team Customer Loyalty Large scale and effective advertising

WEIGHT

NEGATIVE TURNAROUND AS TAS 0 0 3 0.00 0.00 0.45

DIVASTITURE AS 0 0 3 TAS 0.00 0.00 0.45

1 2 3

0.10 0.20 0.15

4 1 2 3 4 1 2 3 4 5 1 2 3 4

High improved current ratio Weakness Low employee morale High debt/assets ratio High selling & admin.expenses Less utilization of capacity Opportunities Large market locally and internationally Equity markets are healthy Customers are more willing to pay for cosmetics Entry barrier exist High Growth Threats Many customers are saving for their childrens college fees Due to ever increasing price of oil, demand in developing countries may decline Global instability Tough competition Total

0.10 0.2 0.05 0.10 0.15 0.20 0.05 0.15 0.05 0.10 0.15 0.10 0.10 0.10

4 2 4 4 2 3 0 4 3 2 3 4 1 4

0.40 0.30 0.20 0.40 0.30 0.60 0.00 0.60 0.10 0.20 0.45 0.40 0.10 0.40 4.90

3 3 2 3 3 4 0 3 4 1 3 3 1 3

0.30 0.45 0.10 0.30 0.45 0.80 0.00 0.45 0.20 0.10 0.45 0.30 0.10 0.30 4.75

Strategy Choice
Negative Retrenchment is desirable strategy. Revlons weaknesses (large scale advertising i.e. 95% of Gross Profit), and high debt/asset ratio) have more impact on retrenchment strategy rather than divestiture. *********************** ********************