By: Ashley Reeves
HISTORY

Founded in 1932 by Charles and Joseph Revson, along with chemist
Charles Lachman

Products: Global color cosmetics, hair color, beauty tools, fragrances,
skincare, anti-perspirant/deodorants and beauty care tools

Net Sales 2010= $1.32 Billion


U.S.= 55%
International= 45%

Vision: “Glamour, excitement, and innovation through high-quality
products at affordable prices.”

Target market = women of all ages worldwide

Brands:




Revlon
Almay
Age Defying
ColorStay
HISTORY CONTINUED

Headquartered in New York, NY

CEO Alan Ennis as of May 2009

4,900 employees

17 manufacturing locations worldwide

U.S., Canada, Europe, Latin America, and Asia Pacific
EXTERNAL MACRO-ENVIRONMENT
FACTORS
POLITICAL FACTORS

Strict FDA regulations in the U.S. and other
countries
ECONOMIC FACTORS

Currency exchange rates


Growth in emerging markets


Revlon would benefit from a weak U.S. dollar relative to
the currencies of other countries.
Sales have grown immensely in the Asia Pacific region.
Global economic conditions
Higher unemployment levels
 Decreased consumer spending

SOCIAL FACTORS


Changes in consumer purchasing habits
Increased customer awareness of permanent
make-up options
TECHNOLOGICAL FACTORS

E-Commerce

Use of social media
PEST ANALYSIS
Factor
Trend
Evaluation
Impact
Rank
(1=low,5=high)
Political
Economic
Strict FDA
regulations in the
U.S. and other
countries
threat
2
currency exchange
rates
growth in emerging
markets
Global economic
conditions
opportunity/threat
4
opportunity/threat
5
opportunity/threat
2
changes in consumer
purchasing habits
threat
3
Social
4
1
2
Increased customer
awareness of
permanent make-up
options
E-Commerce
threat
1
opportunity
2
Technological
3
Use of social media
opportunity
1
INDUSTRY ANALYSIS
Porter’s Five Forces Model
PERSONAL PRODUCTS INDUSTRY
Buyers
Suppliers
Large mass volume retailers
Raw materials
Chain drug and food stores
Packaging
Department and specialty
stores
Competitors
Substitutes
Estee Lauder Companies Inc.
Other cosmetic products not
intended for the same use
L'Oreal
Permanent make-up
Procter & Gamble Co.
Deciding not to purchase
THREAT OF NEW ENTRANTS

Barriers to entry
Nature of Barrier
Extent of Barrier
Supply-side economies of scale
High
Demand-side benefits of scale
High
Capital Requirements
High
Incumbency advantages
independent of size
High
Customer-switching costs
Low
Unequal access to distribution
channels
High
Restrictive Government Policy
Medium
POWER OF SUPPLIERS
Power
Degree of Power
Bargaining Power
is strong if:
Switching costs
Low
High
Suppliers offer
differentiated
products
Low
High
Number of
substitutes available
High
Low
POWER OF BUYERS
Powers
Degree of Power
Bargaining Power
is strong when:
Number of Buyers
High
High
Purchases volume
Low
High
Product Differentiation
High
Low
Vendor Switching Costs
Low
Low
Degree of backward
integration
Low
High
POWER OF SUBSTITUTES
Powers
Degree of Power
Threat is strong if:
Substitute offers
attractive priceperformance trade-off
Low
High
Switching Costs
Low
Low
INTENSITY OF RIVALRY
Power
Degree of Power
Rivalry is strong if:
Number of competitors
High
High
Industry Growth
High
Low
Exit Barriers
High
High
NATURE OF THE FORCES
Factor
Evaluation
Intensity of Rivalry
Strong : several major players with
similar product offerings.
Consumer Buyer Power
Moderate: purchases volume,
differentiation, and backward
integration do not coincide with
strong buyer power.
Supplier Power
Benign: other supplier options are
available if needed.
Threat of Substitute Products
Benign: many customers are loyal
to their personal product items.
Threat of New Entrants
Benign: barriers to entry are high
with patents, research and
development, and pricing strategies.
SUGGESTIONS FOR ADDRESSING KEY
FORCES

Intensity of Rivalry

Continue producing quality products, anticipating
and responding to changes in consumer demands,
and educating product benefits.
PEST & INDUSTRY
ANALYSIS CONCLUSIONS




Economic and social factors have the greatest affect on
Revlon.
Intensity of rivalry is the greatest force for Revlon.
It is important for companies in the personal products
industry to stay on top of changing consumer
preferences and needs in order to stand out among the
competition.
Although the cosmetics and personal products industries
have fierce competition, by continuing to spend more
time on research and development to create
differentiated and quality products, Revlon can increase
their position in the personal products industry.
KEY COMPETITORS
"Bringing the Best to
Everyone We Touch
and Being the Best in
Everything We Do."
“We will provide branded
products and services of
superior quality and value
that improve the lives of the
world’s consumers, now and
for generations to come.”
“To help men and women around
the world aspire to beauty and
express their individual
personalities to the full.”
Revlon
L’Oreal
Estee
Lauder
Procter &
Gamble
$1.32
Billion
€19.5 Billion
($26 Billion)
$7.8 Billion
$19.5 Billion
Net Income
$327.3 M
$3.13 B
$616.4 M
$12.7 B
Employees
4,900
64,600
31,000
127,000
Geographic
Scope
(countries)
100
130
150
180
8
23
28
32
Net Sales
(2010)
Brands
(beauty & grooming)
(beauty & grooming)
R&D % of
Sales
Headquarters
1.8
3.4
1.1
2.5
U.S.
France
U.S.
U.S.
PRODUCTS
Revlon
L’Oreal
Estee Lauder
P&G
Х
Х
Х
Х
Х
Х
Х
Х
Fragrance/cologne
Х
Х
Х
Х
Х
Х
Х
Х
Х
Х
Х
Х
Hair color
Х
Х
Cosmetics (make-up)
Skin care
Hair care
Deodorant
Х
Revlon
L’Oreal
U.S.
57%
Western Europe
43%
Asia/Pacific/
Africa
18%
North America
23%
Asia
13%
Europe/Canada
15%
Eastern Europe
8%
Latin America
10%
Latin America
7%
Africa/Orient/Pacific
6%
Procter & Gamble
North America
42%
Western Europe
21%
Asia
15%
Central & Eastern
Europe, Middle East,
Africa
13%
Latin America
9%
Estee Lauder
Americas
44%
Europe/Middle
East/Africa
37%
Asia/Pacific
19%
Revlon
L’Oreal
Color Cosmetics
64%
Skin Care
27%
Women’s Hair Color
11%
Hair Care
23%
AP/DEO
8%
Make-up
21%
Other Personal Care
7%
Hair Color
15%
Fragrances
6%
Perfumes
11%
Beauty Tools
4%
Other
3%
Estee Lauder
Skin Care
42%
Make Up
21%
Fragrance
16%
Hair Care
5%
Procter & Gamble
Household Care
48%
Beauty
34%
Health + Well-Being
18%
TRENDS & FORCES
*Lack of research and development due to a history of losses caused by
increased competition and decrease in sale of color cosmetics.
*Large dependency on Wal-Mart for sales (23%)
*Revlon is a lot smaller than its competition but has a more focused
product offering.
*Approximately 34% of sales came from emerging markets in 2009.
This presents an opportunity to increase revenues from rising income
growths in those markets.
*Diverse brand names target different market niches.
*Large presence in global market exposes currency fluctuation risks. More
than half of their sales come from outside the U.S.
*Different product price points provide some insulation against recession.
*Rises in powerful low-priced retailers negatively affect consumer product
companies.
* Looking to expand presence in emerging markets. They have created
products designed specifically to target developing nations.
Revlon
L’Oreal
•Build their strong brands
•Develop their organizational capability
•Drive their company to act globally
•Increase operating profits and cash flow
•Improve capital structure
•Continue to improve products
•Find ways to promote business affordably
•Make products irresistible for distributors
•Take position early on evolving trends
•Take advantage of events
•Develop the ability to continue to create
innovative products
Business
Strategies
Estee Lauder
•Commitment to excellent personalized
service and education
•Using diversified staff to create innovative
products
•Philanthropy
•Minimize impact of products and
operations on the environment
•Use the latest technological advancements
to develop cosmetics that provide superior
aesthetics
Procter & Gamble
•Delight customers with sustainable innovations
that improve the environmental profile of their
products
•Improve the environmental profile of their own
operations
•Improve children’s lives through social
responsibility programs
•Engage and equip employees to build
sustainability thinking and practices in their
work
•Work with stakeholders to enable continued
freedom to innovate in a responsible way
High
Stars
Question Marks
Cash Cows
Dogs
Low
Market Growth
Rate
COSMETIC INDUSTRY BCG MATRIX
High
Low
Relative Market Share Position
COMPETITOR AND MARKET
ANALYSIS CONCLUSIONS



Revlon has a vast amount of competition in the
personal products industry.
Being a lot smaller than the competition has
caused them to fall behind in revenues and the
amount of money they are able to spend on
research and development.
By continuing to develop unique products and
investing more money in R&D, Revlon can work
their way to becoming as big as the competition.
BUSINESS MODEL
Sell to a large mass-market
Cost Saving
Brand Building
Corporate Social Responsibility
Developing Organizational Capability
Increase operating profit and cash flow
Improve capital structure
Anticipating and responding to changing consumer demands
PERFORMANCE
2010
Net Sales
2009
2008
2007
2006
2005
$1321.4 $1295.9 $1346.8 $1367.1 $1298.7
$1303.5
$866.1
$810.5
(in millions)
Gross Profit
$821.2
$855.9
$861.4
$771.0
(in millions)

Sales have fluctuated from 2005 on.


The decline in consolidated net sales was driven by
lower net sales of Revlon and Almay color cosmetics
and certain beauty care products
Profits have also fluctuated in past years due to:
unfavorable foreign currency fluctuations
 higher pension expenses within cost of goods
 higher returns and allowances

CHANGE IN SALES BY REGION
2009
2008
2007
United States
$747.9
$782.6
$804.2
Asia Pacific
$266.7
$265.0
$255.6
Europe
$172.4
$200.8
$211.1
Latin America
$108.9
$98.4
$96.2

U.S. and Europe have observed a steady
decrease in sales over the past few years
while Asia Pacific and Latin America have
experienced a steady increase in sales.

While sales have increased in Asia Pacific and
Latin America, they are not increasing at the
rate in which they should, based on the growth
rate of cosmetics in those regions.
CHANGE IN SALES BY REGION (CONTINUED)
• U.S.
• lower net sales of Revlon and Almay color cosmetics
and Mitchum anti-perspirant deodorant.
• Europe
• lower shipments of Revlon and Almay color cosmetics
in Canada
• higher allowances for Revlon color cosmetics in the
U.K.
• lower shipments of certain beauty care products in
France.
Sales in Asia
Pacific and
Latin America
have increased
due to:
Sales in the U.S.
and Europe have
decreased due to:
•Asia Pacific
•higher shipments of Revlon color cosmetics in
Australia and China and of beauty care products
in South Africa.
•Latin America
•the impact of inflation on selling prices in
Venezuela.
•higher shipments of Revlon ColorSilk hair color
in Venezuela, Argentina and certain distributor
markets
U.S. SHARE % BY BRAND/PRODUCT
2009
2008
Revlon Color Cosmetics
12.7
12.7
Almay
5.4
5.9
Revlon ColorSilk Hair Color
9.7
8.3
Mitchum AP/DEO
4.6
5.0
Revlon Beauty Tools
21.0
18.8
RESOURCES
Raw materials and components used
to create their products.
Most of their products are created at
the company’s manufacturing
facilities located around the world.
KEY ASSETS
Cash &
cash
equivalents
Goodwill
Trade
receivables
Property,
plant, and
equipment
Inventories
Prepaid
expenses
Market
High
BCG MATRIX
Stars
Rate
Question Marks
Low
Growth
Cash Cows
High
Dogs
Low
Relative Market Share Position
*Market Share: Increase in competition causes a decrease in
market share for Revlon
*Market Growth: A high growth rate is possible in global
countries.
*Revlon works to expand their current products into
new emerging markets where cosmetics sales are
increasing.
VALUE CHAIN
Primary
Activities:
Inbound logistics
Storing inventory and scheduling transportation
of products for distribution.
Operations
Packaging and assembling products for
distribution.
Outbound logistics
Distribution of products through selected
channels to customers.
Marketing & Sales Advertising and promotion of products using
print, television, and internet.
Service
Tips and services on company website
VALUE CHAIN (CONTINUED)
Support Activities:
Human resource management
Look for energetic, successoriented people who thrive in a
dynamic environment.
Technology development
Global cross-functional product
development process.
Procurement
Receiving raw materials from
vendors.
GENERIC STRATEGY
Low Cost
Differentiation
Broad
Overall Cost
Leadership
Differentiation
Narrow
Competitive Scope
Competitive Advantage
Cost Focus
Differentiation
Focus
REVLON’S GRAND STRATEGY
Rapid Market Growth
Quadrant II
Product Development
Weak
Competitive
Position
Quadrant I
Product & Market Development
Market Development
Market penetration
Market Penetration
Backward integration
Horizontal/Vertical integration
Liquidation/Divestiture
Quadrant III
Retrenchment
Related/unrelated diversification
Conglomerate diversification
Liquidation/Divestiture
Forward integration
Concentric diversification
Quadrant IV
Related/unrelated diversification
Horizontal/Vertical diversification
Conglomerate diversification
Joint ventures
Slow Market Growth
*Revlon needs to work to increase research and development in
order to develop new products.
*Sales can be increased by introducing their products into new
markets.
Strong
Competitive
Position
SWOT ANALYSIS
Strengths
Weaknesses
Despite heavy debt and net losses in
previous years, product development
is the main focus
Financial struggles due to the
economy
Strong relationship with retailers
Limited funds for research and
development
Marketing strategies consistent with
current local trends
Higher prices than their competitors
Strong brand recognition
SWOT ANALYSIS CONTINUED
Opportunities
Threats
E-commerce and use of social
media
Changes in consumer
purchasing habits
Growth in emerging markets
Strict regulations in U.S. and
other countries
Increase distribution
Permanent make-up options
INTERNAL AND SWOT
ANALYSIS
GENERIC AND GRAND
STRATEGIES CONCLUSIONS




Revlon’s sales and profits have fluctuated in the
past 5 years.
Increase in consumer spending from Asia Pacific
and Latin America has presented Revlon with an
opportunity to expand their product market.
Increased spending on R&D will help Revlon to
create better products and increase their market
share against competitors.
Revlon needs to focus on market development in
emerging markets to help increase sales.