NATIONAL INSTITUTE OF FASHION TECHNOLOGY

PATNA

STRATEGIC ANALYSIS OF REVLON

COURSE: MASTER OF FASHION MANAGEMENT

SESSION: 2019-2021

SUBJECT: STRATEGIC AND INNOVATION MANGEMENT

SUBMITTED TO: DR.VIKAS KUMAR

SUBMITTED BY: KARISHMA RAJ AND RUCHI RATAN

ACKNOWLEDGEMENT
CONTENT
INTRODUCTION
Revlon was founded in New York City on 1 March 1932 in the midst of the Great Depression,
by Jewish American brothers Charles Revson and Joseph Revson along with a chemist, Charles
Lachman, who contributed the "L" in the Revlon name. They started with a single product, a new
type of nail enamel — the three founders pooled their resources and developed a
unique manufacturing process. Using pigments instead of dyes, Revlon developed a variety of
new shades of nail enamel. In 1937, Revlon started selling the polishes in department
stores and pharmacies. In six years, the company became a multimillion-dollar organization. By
1940, Revlon offered an entire manicure line, and added lipstick to the collection. During World
War II, Revlon created makeup and related products for the United States Army, which was
honored in 1944 with the Army-Navy "E" Award for Excellence.

By the end of World War II, Revlon was the number two cosmetics producer in the United
States. Expanding its capabilities, the company bought Graef & Schmidt, a cutlery manufacturer
seized by the government in 1943 because of German business ties. This acquisition made it
possible for Revlon to produce its own manicure and pedicure instruments, instead of buying
them from outside supply sources.

Mission Statement
Revlon’s mission statement claims that it intends to emerge the leader in personal care and
cosmetics around the world. It indicates taking pride in manufacturing the best skin care products
and strives to please young and older women alike. The mission statement is positive but could
have added more vigor by emphasizing how it intends to serve its customers and its mission in
shaping the look of its customers. A good mission statement must include an element showing
concern for prosperity, the products, and services, the markets that are the target, an improved
self-concept of the firm, and commitment to the customers and demonstrating the integration of
technology.

Revlon believe that good ethics is good business and strive to serve the communities in which
they operate.

1. Customers
2. Products or services
 3. Markets
4. Technology
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees

Vision Statement

Revlon’s vision statement begins with its definition concentrating on the main products that the
company deals. It defines the company as a global hair color, color cosmetics, beauty tools,
antiperspirant/deodorants, skin care, fragrances, and beauty care products entity. Its vision is
rather brief presented as Excitement, Glamour, and Innovation through top quality products at
affordable prices.

Objective

The company is motivated to inspire their customers to express themselves and their bodies with
confidence. The strategic goal of the entity is optimizing the financial and market performance of
its brands’ portfolios and assets. The business strategies employed by Revlon to ensure it hits its
targets include managing financial drivers for value creation. The objective involves expansion
of the profit margin through optimization of the price, allocating allowances to the sale for
maximization of the return on trade spending, and minimization of the costs across the global
supply chain. The entity is also focused on removing the non-value added administrative and
general cost for funding reinvestment that would enable growth. Another significant goal
includes growing profitability through intensive geographical and innovation expansion. The
entity intends to establish brands that are unique, relevant, impactful, own-able, and distinctive. 

STAGE 1- The Input Stage

INTERNAL AUDIT

An internal audit allows the comprehensive assessment of the strengths and weaknesses of a
company. Furthermore, the undertaking presents critical information regarding the functional
parts of business. Some of the functional parts to be evaluated by the internal audit include the
management, management of information systems, finance, marketing, accounting, operations,
and research and development. The areas are evaluated and then reviewed by the company
executives to create a clear view of the company’s strengths and weaknesses.

Strengths

The strengths noted include any area of the business with the reputation of strong performance.
The company’s strengths provide it with an opportunity to create a competitive advantage and
lead over its competitors.

1. Established Market in the United States

2. The company manufactures most products, and it does not need to outsource
3. Celebrity Support as Spokesperson
4. Brand Longevity

Weaknesses

Any field of the businesses, which is not performing as expected or that which is dragging down
the company is viewed as the weakness. A company should assess its weaknesses to allow it to
gain ground against its competitors. Also, addressing the shortcomings allows organizations to
improve the stability of the business.

1. Keeping up with globalization

2. Fewer diversified products compared to the competitors
3. Huge budgets for advertising
4. The insecure attitudes of employees

Internal Factor Evaluation Matrix

Key Internal Factors Weight Ratin Weighted
g Score
Strengths
1) Established U.S. market 0.25 4 1.0
2) Most products are made by their very own company. Therefore, they 0.15 3 0.45
don’t have to outsource
3) Celebrity supports as spokesperson 0.10 2 0.20
4) Brand longevity 0.10 2 0.20
Weaknesses
1) Globalization 0.15 3 0.45
2) Minimum diversified products compared with competitors 0.10 2 0.20
3) Advertising budgets 0.10 2 0.20
4) Insecure employees 0.05 1 0.05
Total 1.0   2.75

EXTERNAL AUDIT

An external audit is viewed as a significant tool for the company that allows it to
evaluate the factors beyond the control of the entity and determines whether they
are opportunities or threats. Some of these external forces can be grouped as social,
economic, demographic, cultural, environmental, political and technological.
Therefore, the external audit is viewed as a tool for identifying the opportunities for
a company so it can leverage and also define the risks so that they can be mitigated.

Opportunities

1. Revlon could endorse partnership or joint ventures with other players in the industry,
which is intended to increase the chances for the new opportunity.
2. Utilize all marketing opportunities to promote product awareness.
3. Revlon should focus on the male consumers considering their established brand.
4. Open online and internet operations.

Threats
 1. Government instability and fluctuation of exchange rates in some jurisdictions.
2. Intense competition with other players in the industry.
3. Customers changing preferences.
4. The fast pace of globalization and the cost of management.

External Factor Evaluation (EFE) Matrix

Key Internal Factors Weigh Rating Weighted
t Score
Opportunities
1) Revlon could endorse partnership or joint ventures with other players 0.15 3 0.45
in the industry which is intended to increase the chances for new
opportunity
2) Utilize all marketing opportunities to promote product awareness 0.15 3 0.45
3) Revlon should focus on the male consumers considering their 0.05 2 0.1
established brand
4) Open online and internet operations 0.10 3 0.30
Threats
1) Government instability and fluctuation of exchange rates in some 0.15 2 0.30
jurisdictions
2) Intense competition with other players in the industry 0.20 4 0.80
3) Customers changing preferences 0.10 3 0.30
4) Fast pace of globalization and the cost of management 0.10 2 0.20
Total 1.0   2.90

COMPETITIVE PROFILE MATRIX

 Estee Lauder Revlon Avon

Critical Success Weight Rating Score Rating Score Rating Score

Factors

Advertising 0.10 4 0.40 3 0.30 2 0.20

Product Quality 0.07 4 0.28 2 0.14 3 0.21

E-commerce 0.10 4 0.40 2 0.20 3 0.30

Consumer Loyalty 0.08 3 0.24 2 0.16 4 0.32

Price Competitive 0.02 2 0.04 3 0.06 4 0.08

Global Expansion 0.12 4 0.48 3 0.36 2 0.24

Financial Position 0.10 4 0.40 3 0.30 1 0.10

Operating Locations 0.09 3 0.27 2 0.18 4 0.36

Management 0.06 3 0.18 4 0.24 2 0.12

Production Capacity 0.08 4 0.32 3 0.24 2 0.16

Technological 0.08 4 0.32 2 0.16 3 0.24

Advances
Sales Distribution 0.10 3 0.30 4 0.40 2 0.20

Total 1.00 3.63 2.74 2.53

STAGE 2- The Matching Stage

SWOT MATRIX
The SWOT Matrix involves matching the strategies of the weaknesses and threats (WT),
Strengths and threats (ST), Strengths and opportunities (SO), with the weaknesses and
opportunities (WO). The WT strategies are employed to reduce the internal weakness and
 external threats. The ST strategies are the strengths employed to reduce the external threats
facing the company.  The WO strategies are employed where the internal weaknesses can be
countered using the existing external opportunities. Finally, the SO strategies are employed when
the internal strengths can be employed to take advantage of the existing opportunities. A five-
step process is employed to create the SWOT Matrix.

Strengths Weakness Opportunities Threats

Established US market Globalization Utilize partnerships, Government

joint ventures, instability and
acquisitions and regulations
mergers
Company Minimum diversified Apply diverse Intense competition
manufacturers its products compared marketing with other players
products with competitors opportunities

Celebrity support as Advertising budgets Focus on the male Customers changing

spokesperson consumers preferences

Brand longevity Insecure employees Diversify online and Fast pace of

internet operations globalization and the
cost of management

SO WO ST WT

Since Revlon has an The issue of Since Revlon has an Lack of sufficient
established US market, it globalization can be established marked in globalization strategy
should focus on the male addressed through the US, it should might affect
consumers. (S1,O3) embracing acquisition, intensify the competition globalization on the firm
partnership, and from outside forces. and increase the cost of
mergers. (W1,O1) (S1,T2) management. (W1,T4)
Since Revlon The minimum The fact that Revlon Revlon should diversify
manufactures its diversified products can manufactures some of its its products sufficiently
products, it should be coupled with the products, it can focus on to stay strong against the
diversify its online and strategy of focusing on the changing customer strong competition.
internet operations to male products. (W2,O3) preferences. (S2,T3) (W2,T2)
improve sales. (S2,O4)

Revlon has celebrity Advertising budgets can Celebrity spokes people The high advertising
support as spokespeople, be observed by assessing should be leveraged to budgets may hinder
and therefore they the diverse marketing curb the cost of effective promotion of
should utilize diverse options that favor the globalization and products to curb the
marketing techniques. entity. (W3,O2) marketing. (S3,T4) changing preferences of
(S3,O2) customers. (W3,T3)

The brand longevity of Brand longevity should Insecure employs might

Revlon should be help Revlon to stay lead the company to
coupled with stable against failure in standards in
partnerships, government regulations. other jurisdictions.
acquisitions, and joint (S4,T1) (W4,T4)
ventures. (S4,O1)

SPACE MATRIX
The Strategic Position and Action Evaluation (SPACE) Matrix allows an organization to identify
whether they should employ the aggressive, conservative defensive or competitive strategies.
The Financial position (FP) and competitive position (CP) are utilized when creating a SPACE
matrix which are both internal dimensions. Stability position (SP) and industry position (IP) are
utilized as the external dimensions. These factors are critical in determining the strategic position
of the overall firm. Although the external and internal factors from the EFE and IFE matrices are
critical, the organization also needs to consider some factors of the company like resource
utilization, growth potential, market share, customer loyalty, inflation rate, technological
changes, cash flow, and return on investment. The following are the steps employed in the
construction of the SPACE matrix

Financial Strength

 Minimum diversified products (+3)

 Advertising budgets (+3)
 Utilizing mergers, acquisition and joint ventures (+4)

Industry Strength

 Celebrity as spokesperson (+3)

 Diverse marketing opportunities (+4)
 Government instability and regulations (+2)
 Intense competition with other players (+5)
 Changing preferences of the customers (+3)
 Fast pace of globalization (+3)

Environmental Stability

 Established US Market (-5)

 Brand Longevity (-5)
 Globalization (-3)
 Diversify online and internet operations (-3)

Competitive Advantage

 Company manufactures most of its products (-5)

 Insecure employee (-3)
 Focus on male consumer (-4)
Conclusion

FP average = 3.3 IP average = 3.3 SP average = -4 CP average = -4

FS

Conservative Aggressive

CA IS

Defensive Competitive

ES

The directional vector coordinates in this case

X-Axis (CP+IP): -4++3.3 = -0.7

Y-Axis (SP+FP): -4++3.3= -0.7

As indicated by the graph, the directional vector coordinates indicate -0.7 for the x-axis and -0.7
for the y-axis. Therefore, analysis of the financial, industry, stability and competitive position
has the directional vector indicate Revlon to utilize the defensive strategy.

THE BOSTON CONSULTING GROUP (BCG) MATRIX

Relative Market Share Position

High 1.0 Medium .5 Low 0.0

REVLON
High +20

STARS QUSETION MARKS

2 1

Industry Sales
Growth Rate
Medium 0

CASH COWS DOGS

3 4

Low
-20

The BCG Matrix shows that Revlon has low growth and high market share. The company is in
medium position relative to the industry market share.
 INTERNAL EXTERNAL MATRIX
The internal-external matrix is the final tool to be employed in the strategic management process.
The matrix encompasses the total weighted scores of the EFE and IFE matrices. The total
weighted scores of the IFE are placed on the X axis while the EFE are placed on the Y-axis. The
IE matrix ranks the total weighted scores in quadrants starting from a score of 1.0 to 1.99 for the
lowest while the highest is 3.0 to 4.0. All the quadrants are nine while each of them presents a
strategy that a firm would utilize if it fell under a specific quadrant. The following is the
graphical representation of the Revlon’s IE matrix.

IFE TOTAL WEIGHTED SCORES

Strong 3.0 to 4.0 Average 2.0 to 2.99 Weak 1.0 to 1.99

EFE TOTAL
High 3.0 to 4.0
WEIGHTED I II III
SCORE
Medium 2.0 to 2.99
IV V VI

Low 1.0 to 1.99

VII VIII IX

EFE total weighted score: 2.90

IFE total weighted score: 2.75

GRAND STRATEGY MATRIX

 Rapid Market Growth

Quadrant 2 Quadrant 1

REVLON

Weak Competitive Position Strong Competitive Position

Quadrant 3 Quadrant 4

Slow Market Growth

As seen in the assessment Revlon fits in the second quadrant which is encompassed with
liquidation, divestiture, horizontal integration, product development, market penetration and
market development. Despite Revlon being a huge company, it still needs to focus on the areas
covered by the quadrant such as focusing on the diversification of the entity’s products while
improving its position in the industry through acquisitions.

MATRIX ANALYSIS

Alternative BCG IE SPACE GRAND COUNT

Strategies
Forward 2
Integration
Backward 2
Integration
Horizontal 2
Integration
Market 3
Penetration
Market 3
Development
Product 4
Development
Concentric 2
Diversification
Conglomerate 2
Diversification
Horizontal 2
Diversification
Joint Venture 1
Retrenchment

Divestiture 1
Liquidation

STAGE 3 – THE DECISION STAGE

QUANTITATIVE STRATEGIC PLANNING MATRIX

.