Revlon Inc. Case Study 2h2d2e

Revlon Inc. Case Study: I.

Introduction

History: Revlon is a universal company that sells products for skin care, cosmetics, personal care,fragrance and professional products. It was founded in 1932 and began in the nail polishmarket, soon after expanding into lipstick. Over the past six years, Revlon has consistentlylost revenue and struggled with debt. Even though they have eliminated executive positions,reduced staffing and consolidated sales and marketing functions to save an approximate $33million, the company is still in serious trouble.R e v l o n w a s f o u n d e d i n 1 9 3 2 , b y C h a r l e s R e v s o n a n d h i s b r o t h e r J o s e p h , a l o n g w i t h a chemist, Charles Lachman, who contributed the "L" in the REVLON name. Starting with a s i n gl e product nail enamel unlike any before it - the three founders p o o l e d t h e i r m e a g e r resources and developed a unique manufacturing process.The company began its success with opaque long-lasting nail enamel sold to beauty salons.Revlon sold its nail enamel through department stores and selected drugstores.Revlon contributed directly to the war effort, by manufacturing first aid kits and dye markersfor the navy. At war's end, Revlon began to produce manicure and pedicure instruments.Following the war, Revlon launched twice-yearly nail enamel and lipstick promotions tied toseasonal clothing fashions. Revlon also turned to television sponsorship to boost sales. InDecember 1955, Revlon first offered stock to the public. At the end of the following year, Revlon was listed on the New York Stock Exchange.Revlon laid the ground work for its highly

successful international presence in the 60's, bringing the "American Look" to the rest of the world through advertising featuring U.S.models.Growth and innovation led the way for Revlon. In 1985, Revlon was sold to a subsidiary of MacAndrews & Forbes Holdings. In 1987 Almay ed the Revlon lineupIn t h e 1 9 9 0 ' s , R e v l o n r e v i t a l i z e d i t s c o s m e t i c s b u s i n e s s a n d s t r e n gt h e n e d i t s i n d u s t r yleadership role. Revlon introduced the first transfer resistant lipcolor which led to a ful lColorStayTM Collection of transfer-resistant products. The company closed the gap on its closest competitors and reached a dramatic goal - the #1 brand in mass color cosmetics.Revlon again became a public company in 1996, listed on the New York Stock Exchange.

II.

Statement of the Problem

Present Conditions: Revlon is struggling to recover and collect debt of almost $2.3 billion. The research anddevelopment department is also struggling to offer new products to the market. In recentyears Revlon launched Vital Radiance, a cosmetic line for older women with 100 productsand it was the largest launch since ColorStay in 1994. However the product was not wellreceived by the market because other competitors already provide the products and the prices

of the Revlon product was also very high as compare with rivals. Revlon discontinued the brand in September 2006. Revlon planned to launch a new prestige fragrance called Flair in2006, but delayed the launch until debt could be restructured. The company issued $185million in stock in 2006 to raise money to reduce debt. MacAndrews and Forbes Holdingsagreed to purchase a portion of the stock and to purchase nay stock not purchased by currentstockholders. MacAndrews also extend a line of credit of $87 million to Revlon which can help the Revlon in the recovery of losses.

Competitors: The Revlon’s major competitors are Proctor and Gamble, Avon P r o d u c t s , E s t e e La u d e r Companies, L’Oreal, and Unilever. Other competitors include samall companies such asUrban Decay, Specialty stores such as Bath and Body Works, Body Shop, and Victoria’s secret.

III.

Alternative Courses of Action

Analysis: After studying the case of Revlon Inc’ now we are going to analyze it that what type of strategy they need to follow in the coming years. The Revlon is in troubles in these days andtherefore we are going to analyze the external and internal environments of Revlon first thenwe will suggest with the help of different tools and techniques an appropriate strategy for them.

The Strategic position and action evaluation(space) Matrix

The Grand Strategy Matrix for Revlon In the case study of Revlon we saw that the market is growing world wide even in Americathe young migrants increasing year by year but the competitive position of Revlon is notstrong because the competitors are Proctor & Gamble,

Unilever, Avon Products, Inc’ whichis very strong and have popular brand names. Therefore according to Grand Strategy Matrixthe Revlon lies in quadrant II. According to this quadrant the Revlon needs strategies like Market development, Market penetration, Product deve l o p m e n t , H o r i z o n t a l integration, Divestiture, and Liquidation . One of these strategy is important for Revlon

The Grant Strategy Matrix for Revlon Inc. Rapid market growth

IV.

Conclusion

Conclusion As we saw in the case study of Revlon which was actually written in 2007 that the companyis in great troubles. The financial position is also very weak and it generates losses in therecent years. After applying the tools and techniques of strategic management our conclusionis as follow. 1) . The company should develop new markets, which is not tapped by the competitors. 2) . The company should improve the quality of products as well as the price minimization effort should be taken.

3) . The company also need to increase sales through increasing marketing efforts. 4). The other strategy option is the integration it may be forward, backward or horizontalintegration. 5) . The company should sell some unprofitable division. 6). The last option is liquidation. If the company fails to follow the above strategies then itshould liquidate the business.