Revlon Strategic Analysis

Revlon Case Strategic Analysis

Revlon Case Strategic Analysis - MBA
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Revlon Case Strategic Analysis
MBA Project: Strategic Management 2015
Lecturer: Dr.Heba El-Dahshan
By:
Ahmed Bahnas

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Contents
Contents...................................................................................................................................................................................2
I. Introduction ......................................................................................................................................................................3
II. Current Performance .................................................................................................................................................3
A. Current Performance..........................................................................................................................3
B. Strategic Posture.................................................................................................................................3
1. Vision...........................................................................................................................................................................3
2. Mission........................................................................................................................................................................4
C. Strategic Posture.................................................................................................................................4
III. Environmental Scanning.........................................................................................................................................5
A. Internal Environment .........................................................................................................................5
1. Corporate Structure...............................................................................................................................................5
2. Corporate Value Chain..........................................................................................................................................5
3. Corporate Resources.............................................................................................................................................5
4. Financial Analysis...................................................................................................................................................6
Internal Factors Evaluation (IFE).........................................................................................................................8
B. External Environment.........................................................................................................................9
1. Societal Environment............................................................................................................................................9
2. Task Environment (Porter's five factors)..................................................................................................10
External Factors Evaluation (EFE)....................................................................................................................11
IV. Strategy Analysis Tools.........................................................................................................................................13
1. TOWS Matrix ...................................................................................................................................13
2. SPACE Matrix ..................................................................................................................................14
3. BCG Matrix ......................................................................................................................................16
4. IE Matrix...........................................................................................................................................17
V. Strategy Decision Stage...........................................................................................................................................18
QSPM....................................................................................................................................................18
VI. Strategy Formulation & Final Recommendations..................................................................................20

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I. Introduction:
Revlon is an American cosmetics, skin care, fragrance and personal care
company founded in 1932.
Revlon operates as one of the world's leading cosmetics companies and markets
its products in over 100 countries around the world with sales outside the
United States accounting for approximately 55% of sales 2010.
Revlon products fall into six strategic business categories or units: Cosmetics,
Hair, Beauty, Fragrance, Anti-perspirants/Deodorants, and Skin Care.
II. Current Performance:
A. Current Performance:
The second Quarter of 2011
 Revlon's sales were $351.2 million.
 Increase of 4% versus the second quarter 2010.
 Revlon's sales increased $15.6 million (8.7%) due to increased sales of
Sinful Colors.
 Revlon's sales increased $4.2 million (8.6%) due to higher sales of Revlon
color cosmetics in China and Australia.
 Middle East and Africa, Revlon sales decreased $3.4 million (6.8%) led
down by weak sales in the United Kingdom and Italy.
 In Latin America, Revlon sales decreased $1 million (3.5%) led down by
lower sales in Mexico and Venezuela, but sales in Argentina were good.
 In Canada, Revlon sales decreased $2.24 million (11.5%) due to lower net
sales of Revlon color cosmetics.
 55% of Revlon sales are inside the United States.
 62% of Revlon sales are from Cosmetics/Skin Care/Fragrances.
 32% of Revlon sales are from Personal Care.
B. Strategic Posture:
1. Vision:
"Revlon is a global color cosmetics, hair color, beauty tools, fragrances, skincare,
antiperspirant/deodorants, and beauty care products company whose vision

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Glamour, Excitement and Innovation is through High-quality Products at
Affordable Prices.''
(Source: Company documents)
 Vision statement Evaluation:
Revlon's vision may be stronger if it has future positioning of company view and
reflect future growth.
2. Mission:
"To emerge as the leader in cosmetics 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.''
 Mission statement Evaluation:
No. Mission Components Revlon
1 Products / Services Yes
2 Customers Yes
3 Employees No
4 Markets Yes
5 Technology No
6 Public Image No
7 Self-Concept No
8 Philosophy No
9 Survival / Growth / Profits Yes
Revlon's mission statement needs to be broad in scope to focus on Employees'
competencies and skills, Public Image (CSR), its production technology, self-
concept and Managerial Philosophy which could given to its shareholders and
stakeholders.
C. Strategic Posture:
President & CEO
Finance Marketing Operations
Senior VP Senior VP Senior VP Senior VP Senior VP
Administration Science

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In April 2009, Alan Ennis became president and the fourth CEO of Revlon since
2000. Ennis had the position of senior vice president and CFO.
Ennis has implemented a worldwide organizational realignment at Revlon
designed by eliminate management layers to be flat organizational
management.
III. Environmental Scanning:
A. Internal Environment:
1. Corporate Structure:
 CEO had the position of senior vice president and CFO (S1)
 CEO has implemented a worldwide organizational realignment at Revlon
designed to take advantage of more efficient processes and workflow,
eliminate management layers, streamline certain functions, and
consolidate more operations into the company (S2)
 About 400 positions were eliminated (W1)
 The restructuring saved the company $30 million, with $15 million quickly
benefitting the 2009 result (S)
2. Corporate Value Chain:
 Revlon has 80-year history of providing high-quality products at affordable
prices to women (S3)
 Several of the company's plants have ISO-9000 certification signifying their
commitment to quality manufacturing standards (S4)
3. Corporate Resources:
 Revlon's global market share in the cosmetics business has consistently
declined, from 4% in 2009 to 3% in 2010 (W2)
 After years of losses and management upheaval, 2008 was the first year
since 1997 that Revlon posted a positive net income (S)
 Limited presence in emerging markets (W3)
 Relatively small R&D budgets (W4)
 Relatively small advertising budgets (W5)
 Revlon and its employees are active in supporting women's health
programs and other community efforts, investing over $65 million in
medical research programs, awareness and education programs, and
doctor training (S5)

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 The primary customers for Revlon products are large mass merchandisers
and chain drug stores (S6)
 Wal-Mart sales were 22% of Revlon sales in 2010 (S7)
 Revlon's products are also sold through its websites (S8)
 Revlon spent $24 million on R&D efforts in 2010 and employed 140
people in this effort (S9)
 Revlon employs spokespersons Halle Berry, Jessica Alba, and Jessica Biel in
its advertising campaigns (S10)
 Globalization of the company's manufacturing and distribution (S11)
4. Financial Analysis:
 55% of Revlon sales in 2010 are inside the United States (S12)
 54% of Revlon sales in 2010 are outside the United States (W)
 62% of Revlon sales are from Cosmetics/Skin Care/Fragrances (W6)
 32% of Revlon sales are from Personal Care (W)
 Revlon had a large debt load of $1.1 billion by the end of 2010 (W7)
Profitability Ratios 2007 2008 2009 2010
Profit Margin Ratio (0.01) 0.04 0.04 0.25
Return on Assets Ratio (0.02) 0.07 0.06 0.30
 Improving Profit Margin Ratio due to increase sales in less operations cost
which led to increase Net Income (S)
 The ROA has increased radically to more than four time during the last
three years. This is another ratio indicates that Revlon is a profitability
company and efficient uses of resources (S)
Liquidity Ratios 2007 2008 2009 2010
Current Ratio 1.35 1.32 1.30 1.49
Quick Ratio 0.88 0.85 0.92 1.13

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 The Current Ratios of Revlon for the last year is one time and half which
means the current assets are 1.5 the current liabilities, therefore we have
considered Revlon having good short-term financial strength (S)
 Improving Quick Ratio led to improve the company ability to pay off its
current liabilities without having to liquidate its inventory (S)
Asset Ratios 2007 2008 2009 2010
Inventory Turnover
Ratio
8.45 8.73 10.87 11.49
Total Assets Ratio 1.57 1.66 1.63 1.22
 The trend of Inventory Turnover Ratio in Revlon was increasing during the
last four years, therefore This is unfavorable sign in Revlon which need
more improvement in excessive stocks of inventory (W)
 The Total Assets Ratio has decreased during the last three years which
indicated Revlon is not generating a sufficient volume of business given its
total investment (W8)
Debt Ratios 2007 2008 2009 2010
Total Debt Ratio 2.22 2.37 2.30 1.64
 The Debit Ratios has decreased during the last three years which indicated
Revlon is balancing between the funds provided by creditors and its equity
to take advantage of leverage option with less risk (S13)
Growth Ratios 2007 2008 2009 2010
Sales Growth - (3.81) (3.78) 1.97
Net Income Growth - 459.63 (15.72) 570.70

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 Revlon shows improvement in cash flows (S14)
 Revlon seems to be increased performing (S15)
 Internal Factors Evaluation (IFE)
Key Internal Factors Weight Rate
Weighted
Score
Strengths
S1 CEO with financial background 0.03 3 0.09
S2 Flat organizational management 0.02 4 0.08
S3 Affordable price Brand Recognition 0.06 4 0.24
S4 ISO-9000 certification for quality
manufacturing standards
0.03 3 0.09
S5 Investing over $65 million in strong CSR 0.05 4 0.2
S6 Primary customers are large mass
merchandisers and chain drug stores
0.02 3 0.06
S7 Wal-Mart sales were 22% of Revlon
sales in 2010
0.03 4 0.12
S8 Selling through its websites 0.03 3 0.09
S9 Start focus & Investment on R&D 0.09 4 0.36
S10 Celebrities support as spokespersons 0.06 4 0.24
S11 Globalization of Revlon 0.03 4 0.12
S12 Well established U.S. market 0.05 4 0.2
S13 Advantage of leverage option 0.02 3 0.06
S14 Improvement in cash flows 0.03 4 0.12
S15 Increased Revlon performance 0.03 4 0.12
Weakness
W1 Insecure employees 0.03 2 0.06
W2 Global market share loss in 2010 0.04 1 0.04
W3 Limited presence in emerging markets 0.05 2 0.1
W4 Relatively small R&D budgets 0.06 1 0.06
W5 Relatively small advertising budgets 0.05 1 0.05
W6 Less diversified products comparing
with competitor
0.06 2 0.12
W7 Large debt load of $1.1 billion 0.09 1 0.09
W8 Not generating a sufficient volume of
business given its total investment
0.04 1 0.04
Total Weighted Score (TWS) 1 2.75

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B. External Environment:
1. Societal Environment:
Political
 Newly won freedoms in Tunisia, Egypt, Libya, and Algeria open up more
interest among women in those countries wanting to look pretty and
show that they are pretty (O1)
Economical
 In an economy with high unemployment, high gas prices, and high food
prices (T)
 High inflation, the strength of the dollar in international markets, and the
fluctuation of foreign currency exchange rates all pose difficulties for
companies operating in international markets (T1)
 The economies in Japan, Latin America, and many European countries
have slowed in recent years, and economies in developing nations are
somewhat unstable (T)
Sociocultural
 Aging baby boomers make up a significant proportion of the adult U.S.
population (T2)
 The 75 million Americans born between 1946 and 1964 are a significant
market for the cosmetics/personal care industry (T3)
 Many baby boomers have high levels of disposable income, are brand-
loyal consumers, and are sensitive concerning their looks (O2)
 Between 2000 and 2010, the U.S. Hispanic population grew by 43%. The
increase in Hispanic population during this 10-year period made up over
half of the total population increase in the U.S. (O3)
 International sales of cosmetic/skin care products are also impacted by
ethnic/racial issues (O)
 There are significant opportunities in Asian countries (60% of world's
population) (O4)
 The youthful, increasingly affluent Latin American countries also represent
growth opportunity (O5)
 Since the majority of personal care products are currently sold in the
United States, Japan, Canada, and European countries (less than 20% of
world's population) (O)

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 The potential for sales of personal care products around the world is
excellent (O6)
 The youth market is still a vibrant consumer of cosmetics, hair care
products, and fragrances (O7)
 The U.S. teen market (ages 15-19) was estimated at almost 10.5 million
teens by 2010 (O8)
 The populations of countries outside the U.S. are growing more rapidly
than the U.S. population (O9)
 Sales of personal care products in Brazil, Russia, India, and China are
expected to grow 40% from 2009 to 2014 (O10)
2. Task Environment (Porter's five factors):
Threat of substitutes (Moderate)
 More and more consumers are seeking out natural products and showing
concern for the amount of chemicals in cosmetics (T)
 There has been a growth in "cosmeceutical'' offerings (T)
Threat of entry (Low)
 International economics provide unique challenges for companies in
cosmetics/skin care industry (T)
 Many emerging economies in Asia and Eastern Europe are eager to have
mass marketers enter operations in their countries, but operating
situation are generally uncertain (T)
 An emerging middle class in Asia, Africa, Eastern Europe, and Latin
America offers companies a chance to tap into a new market for personal
care products (O11)
The bargaining power of buyers (High)
 Social media have become an incredibly important tool in consumer
relationship development in the cosmetics/skin care industry (O12)
 Increasingly, cosmetics/personal care is not an industry for women only ;
there has been impressive growth in the sales of male oriented grooming
and hygiene products (O13)
 Worldwide demand for deodorants is expected to reach $12.6 billion by
2015 (O)
 Men are also interested in products that improve and enhance the
shaving process (O)

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 U.S. consumers cut back on spending, trading down from prestige
cosmetics brands in favor of value brands (T4)
Competitive rivalry (High) (T5)
 There have been several examples of online social media campaigns
within the industry (T6)
 It is very difficult to gain and sustain competitive advantage in the
cosmetics/skin care industry that offers hundreds of products (T7)
 P&G serves 4.2 billion people in more than 180 countries (T8)
 P&G segments its offering into three major brand categories: beauty and
grooming, health and well-being, and household care (T9)
 L'Oreal is the world's largest cosmetics firm (T)
 Unilever has best volume growth in 30 years in 2010 (T)
 Unilever was strength of the personal care brands and the growth in
emerging markets that resulted in Unilever's 2010 sales growth (T10)
 Avon is the number one direct seller of cosmetics and beauty products in
the world. Over $10 billion in annual revenue produced by 6.5 million
Avon representatives in more than 100 countries (T11)
 In October 2010, it was rumored that L'Oreal was considering acquiring
Avon for a reported $19 billion (T12)
 Estee Lauder pulled the prescriptive brand from retail distribution in early
2010, but decided to offer the most popular items online only (T)
 External Factors Evaluation (EFE)
Key External Factors Weight Rate
Weighted
Score
Opportunities
O1 New market in Arab African countries 0.07 4 0.28
O2 Promising teen & youth market 0.07 3 0.21
O3 U.S. Hispanic population grew by 43% 0.05 3 0.15
O4 Asian markets (60% of world's
population) uncovered by Revlon
0.07 4 0.28
O5 The youthful, increasingly affluent
Latin American countries
0.04 3 0.12
O6 The potential for sales of personal care
products around the world is excellent
0.04 4 0.16
O7 The youth market is still a vibrant
consumer
0.05 3 0.15

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O8 U.S. teen market 10.5 million teens 0.03 3 0.09
O9 International populations are growing
more rapidly than the U.S. population
0.03 3 0.09
O10 Sales of personal care products in
Brazil, Russia, India, and China are
expected to grow 40% from 2009 to 2014
0.04 4 0.16
O11 Asia, Africa, Eastern Europe, and Latin
America are new market for personal care
products
0.05 4 0.2
O12 Social media important CRM tool 0.04 3 0.12
O13 Sales growth for Men cosmetics /
personal care products
0.0 3 0.15
Threats
T1 Global economics crisis 0.02 1 0.02
T2 Aging U.S. population 0.02 2 0.04
T3 Aging of U.S. cosmetics' consumers 0.06 1 0.06
T4 U.S. consumers cut back on spending,
trading down from prestige cosmetics
brands in favor of value brands
0.02 2 0.04
T5 Intensive competition 0.07 1 0.07
T6 Online social media campaigns 0.02 2 0.04
T7 Difficult to gain competitive advantage 0.02 1 0.02
T8 Huge customer base of competitor 0.04 1 0.04
T9 High diversified products of competitor 0.02 2 0.04
T10 Sales growth personal care for
competitor
0.05 1 0.05
T11 Direct sales of cosmetics 0.02 1 0.02
T12 Horizontal Integration of competitors 0.01 2 0.02
Total Weighted Score (TWS) 1 2.62

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IV. Strategy Analysis Tools:
1. TOWS Matrix
Internal Factors (IFE)
Internal Factors (IFE)
Strengths
S1 CEO with financial background
S2 Flat organizational management
S3 Affordable price Brand Recognition
S4 ISO-9000 certification for quality
S5 Investing over $65 million in strong CSR
S6 Primary customers are large mass
S7 Wal-Mart sales were 22% of Revlon sales in
2010
S8 Selling through its websites
S9 Start focus & Investment on R&D
S10 Celebrities support as spokespersons
S11 Globalization of Revlon
S12 Well established U.S. market
S13 Advantage of leverage option
S14 Improvement in cash flows
S15 Increased Revlon performance
Weakness
W1 Insecure employees
W2 Global market share loss in 2010
W3 Limited presence in emerging
markets
W4 Relatively small R&D budgets
W5 Relatively small advertising budgets
W6 Less diversified products comparing
with competitor
W7 Large debt load of $1.1 billion
W8 Not generating a sufficient volume of
Opportunities
O1 New market in Arab African countries
O2 Promising teen & youth market
O3 U.S. Hispanic population grew by 43%
O4 Asian markets (60% of world's
O5 The youthful, increasingly affluent Latin
American countries
O6 The potential for sales of personal care
O7 The youth market is still a vibrant
consumer
O8 U.S. teen market 10.5 million teens
O9 International populations are growing
O10 Sales of personal care products in Brazil,
Russia, India, and China are expected to grow
40% from 2009 to 2014
O11 Asia, Africa, Eastern Europe, and Latin
America are new market for personal care
products
O12 Social media important CRM tool
O13 Sales growth for Men
cosmetics/personal care products
SO Strategies
S3S4S8S10S11 O2O4O7O9 : Entry to youth
Asian markets (Market Development)
S3S4S8S10S11 O2O5O7O9 : Entry to youth
Latin American markets (Market Development)
S3S4S8S10S11 O1O2 : Entry to youth Arab
African markets (Market Development)
S3S4S9S11S14S15 O6O10O11 : Introduce
developed personal care products to Asia,
Africa, Eastern Europe & Latin America
(Product Development & Market
Development)
S3S4S10S12 O2O3O7O8 : Penetrate U.S. teen
& U.S. Hispanic markets (Market Development)
S3S4S11S14S15 O13 : Targeting men
worldwide for using its products (Market
Development)
S8S14S15 O2O7O8O12 : Developing it E-Selling
(Forward Integration)
S6S11 O9 : Create international network
distribution with big chain drug stores
(Forward Integration)
WO Strategies
W2W3W7W8 O2O4O7O9O13 : Targeting
new emerging markets specially Asia
with focusing on youth and men (Market
Development)
W2W5W8 O12 : Increase social media
advertising & campaigns which
represents promotion with low cost
(Market Penetration)
Threat
T1 Global economics crisis
T2 Aging U.S. population
T3 Aging of U.S. cosmetics' consumers
T4 U.S. consumers cut back on spending,
trading down from prestige cosmetics brands
in favor of value brands
T5 Intensive competition
T6 Online social media campaigns
T7 Difficult to gain competitive advantage
T8 Huge customer base of competitor
T9 High diversified products of competitor
T10 Sales growth personal care for
competitor
T11 Direct sales of cosmetics
T12 Horizontal Integration of competitors
ST Strategies
S1 T1 : Decrease some of expenses by cutting
cost (Retrenchment)
S3S4S11S12 T1T4T5T7 : Setting new
positioning as the most affordable brand with
standard quality (Cost Leadership Business
Strategy)
S5S12S14 T2T3T5T7 : Increase CSR particularly
care of the elderly in U.S. and Global (Market
Penetration)
WT Strategies
W4W8 T7T8T9T12 : Temporary
partnership with one of big company in
Asia as Joint Venture (Horizontal
Integration)
W2W7W8 T1T5 : Selling or partial
liquidation the most loss department or
production line (Divestiture)
W2W6W8 T5T8T9 : Produce new related
products as like : Baby Care, Hair care, or
Oral Care to attract new customers and
retain existing customers (Concentric
Diversification)

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Recommended Strategies from TOWS Matrix:
As Business Strategy: Cost Leadership Strategy
As Corporate Strategy: Market Penetration – Market Development – Product
Development – Forward Integration - Horizontal Integration – Concentric
Diversification – Retrenchment – Divestiture
2. SPACE Matrix
Internal Strategic Dimension External Strategic Dimension
ComparingtothebenchmarkofOrganization
X-Axis(-Ve)
Competitive Position (CP)
ComparingtothewholeIndustry
X-Axis(+Ve)
Industry Position (IP)
Affordable price Brand Recognition -2
International populations are growing
more rapidly than the U.S. population 4
ISO-9000 certification for quality
manufacturing standards -2 Intensive competition 1
Investing over $65 million in strong CSR -1 High diversified products of competitor 2
Global market share loss in 2010 -6 Sales growth personal care for competitor 2
Relatively small R&D budgets -4
Relatively small advertising budgets -5
Less diversified products comparing with
competitor -3
Total -23 Total 9
Average -3.3 Average 2.25
Y-Axis(+Ve)
Financial Position (FP)
Y-Axis(-Ve)
Stability Position (SP)
Leverage 5 Promising teen & youth market -1
Sales Growth 4
Asian markets (60% of world's population)
uncovered -1
Net Income Growth 3 Global economics crisis -5
Large debt load of $1.1 billion 1 Aging of U.S. cosmetics' consumers -4
Total Assets Ratio 2 U.S. consumers cut back on spending -3
Total 30 Total -14
Average 3 Average -2.8
X-axis: CP + IP = (-3.3) + 2.25 = -1.05
Y-axis: FP + SP = 3 + (-2.8) = 0.2 # (X,Y) = (-1.05,0.2)

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Recommended Strategies from SPACE Matrix:
From analysis SPACE matrix we found that Revlon has middle strategic position
and best strategy is Conservative Strategy which contains:
Market Penetration – Market Development – Product Development – Concentric
Diversification

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3. BCG Matrix (Boston Consulting Group)
Recommended Strategies from BCG Matrix:
According to BCG matrix Revlon suffering from losing market share among
intense competition in growing market.
Revlon will represented as Question Mark (Problem Child) which need more
invest to move:
Market Penetration Strategy

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4. IE Matrix (GE-Mckinsey)
IFE
EFE
Strong
(3 - 4)
Average
(2 - 2.99)
Weak
(1 - 1.99)
Strong
(3 - 4)
1
2
3
Average
(2 - 2.99)
4 5 6
Weak
(1 - 1.99)
7 8 9
Recommended Strategies from IE Matrix:
Based on two key dimensions:
IFE (X-axis) = 2.75 (Average)
EFE (Y-axis) = 2.62 (Average)
Revlon placed at Box 5 (Hold & Maintain) which recommend:
Market Penetration – Market Development – Product Development

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V. Strategy Decision Stage:
After using Strategy Analysis Tools, we have numbers of common and repeated
solutions (strategies):
Market Penetration – Market Development – Product Development – Concentric
Diversification
Quantitative Strategic Planning Matrix (QSPM):
QSPM Weight
Market
Penetration
Market
Development
Product
Development
Concentric
Diversification
AS
Rate
TAS
WxR
AS
Rate
TAS
WxR
AS
Rate
TAS
WxR
AS
Rate
TAS
WxR
Opportunities:
O1 New market in Arab African countries 0.07 1 0.07 4 0.28 2 0.14 3 0.21
O2 Promising teen & youth market 0.07 1 0.07 4 0.28 3 0.21 2 0.14
O3 U.S. Hispanic population grew by 43% 0.05 1 0.05 3 0.15 2 0.1 4 0.2
O4
Asian markets (60% of world's
0.07 3 0.21 4 0.28 1 0.07 2 0.14
O5
The youthful, increasingly affluent Latin
American countries
0.04 3 0.12 2 0.08 4 0.16 1 0.04
O6
The potential for sales of personal care
0.04 2 0.08 3 0.12 4 0.16 1 0.04
O7
The youth market is still a vibrant
consumer
0.05 1 0.05 3 0.15 2 0.1 4 0.2
O8 U.S. teen market 10.5 million teens 0.03 2 0.06 1 0.03 4 0.12 3 0.09
O9
International populations are growing
0.03 2 0.06 4 0.12 1 0.03 3 0.09
O10
Sales of personal care products in Brazil,
Russia, India, and China are expected to
grow 40% from 2009 to 2014
0.04 3 0.12 4 0.16 1 0.04 2 0.08
O11
Asia, Africa, Eastern Europe, and Latin
America are new market for personal
care products
0.05 3 0.15 4 0.2 1 0.05 2 0.1
O12 Social media important CRM tool 0.04 4 0.16 1 0.04 2 0.08 3 0.12
O13
Sales growth for Men cosmetics /
personal care products
0.05 0 0 0 0

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Threats:
T1 Global economics crisis 0.02 0 0 0 0
T2 Aging U.S. population 0.02 1 0.02 4 0.08 2 0.04 3 0.06
T3 Aging of U.S. cosmetics' consumers 0.06 1 0.06 4 0.24 2 0.12 3 0.18
T4
U.S. consumers cut back on spending,
trading down from prestige cosmetics
brands in favor of value brands
0.02 0 0 0 0
T5 Intensive competition 0.07 1 0.07 3 0.21 2 0.14 4 0.28
T6 Online social media campaigns 0.02 0 0 0 0
T7 Difficult to gain competitive advantage 0.02 1 0.02 2 0.04 4 0.08 3 0.06
T8 Huge customer base of competitor 0.04 4 0.16 3 0.12 2 0.08 1 0.04
T9 High diversified products of competitor 0.02 1 0.02 2 0.04 3 0.06 4 0.08
T10
Sales growth personal care for
competitor
0.05 1 0.05 4 0.2 2 0.1 3 0.15
T11 Direct sales of cosmetics 0.02 0 0 0 0
T12 Horizontal Integration of competitors 0.01 0 0 0 0
TOTAL Opportunities + Threats 1
Strengths:
S1 CEO with financial background 0.03 0 0 0 0
S2 Flat organizational management 0.02 0 0 0 0
S3 Affordable price Brand Recognition 0.06 2 0.12 4 0.24 1 0.06 3 0.18
S4
ISO-9000 certification for quality
0.03 1 0.03 2 0.06 4 0.12 3 0.09
S5 Investing over $65 million in strong CSR 0.05 1 0.05 2 0.1 3 0.15 4 0.2
S6
Primary customers are large mass
0.02 4 0.08 3 0.06 1 0.02 2 0.04
S7
Wal-Mart sales were 22% of Revlon sales
in 2010
0.03 3 0.09 4 0.12 1 0.03 2 0.06
S8 Selling through its websites 0.03 2 0.06 4 0.12 1 0.03 3 0.09
S9 Start focus & Investment on R&D 0.09 0 0 0 0
S10 Celebrities support as spokespersons 0.06 0 0 0 0
S11 Globalization of Revlon 0.03 0 0 0 0
S12 Well established U.S. market 0.05 1 0.05 3 0.15 2 0.1 4 0.2
S13 Advantage of leverage option 0.02 1 0.02 4 0.08 2 0.04 3 0.06
S14 Improvement in cash flows 0.03 1 0.03 3 0.09 2 0.06 4 0.12
S15 Increased Revlon performance 0.03 4 0.12 2 0.06 1 0.03 3 0.09
Weaknesses:
W1 Insecure employees 0.03 0 0 0 0
W2 Global market share loss in 2010 0.04 0 0 0 0

20 | P a g e
W3 Limited presence in emerging markets 0.05 1 0.05 4 0.2 3 0.15 2 0.1
W4 Relatively small R&D budgets 0.06 0 0 0 0
W5 Relatively small advertising budgets 0.05 0 0 0 0
W6
Less diversified products comparing with
competitor
0.06 0 0 0 0
W7 Large debt load of $1.1 billion 0.09 4 0.36 1 0.09 2 0.18 3 0.27
W8
Not generating a sufficient volume of
0.04 1 0.04 3 0.12 2 0.08 4 0.16
TOTAL Strengths + Weaknesses 1
Total TAS 2.7 4.28 2.96 3.96
VI. Strategy Formulation & Final Recommendations:
 After the above Matrix (QSPM) it was clear that our selected strategies:
1- Market Development is the most optimal strategy to implement by targeting
new segments of customers and markets (Men, youth, Asian, Latin American,
Arab African, Africa, Eastern Europe and U.S. Hispanic) to increase its market
share and be capable to generating a sufficient volume of business given its total
investment and increased performing to decrease its debt load.
2- Concentric Diversification (Related) is the contingency strategy plan by
producing new related products as like: Baby Care, Hair care, or Oral Care to
attract new customers (Men, youth & uncovered emerging markets) and retain
existing customers (U.S. & Global)
 We recommend Revlon to apply Cost Leadership Strategy as Business
Strategy by setting new positioning as the most affordable brand with
standard quality (from TOWS matrix)

Revlon Strategic Analysis

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