REVLON Strategic Management Case

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REVELON STRATEGIC MANAGEMENT CASE

Transcript of REVLON Strategic Management Case

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BURHAN ASIFDANISH BABARDANIYAL NASEERFAISAL IJAZFATIMAH BABURBRIEF INTRODUCTIONRevlon is producing and selling an array of cosmetics, hair color, beauty tools, deodorants, fragrances, skincare and other beauty care products.

OPERATES IN.The company operates in NORTH AMERICA, ASIA-PACIFIC, EUROPE, AFRICA, AND LATIN AMERICA.Headquartered in New York City, and employs 4,900 people.

BRIEF HISTORYFormed in 1932 with initial investment of $300. Started off with just one product; NAIL ENAMEL.During World War II, Revlon created makeup and related products for the U.S. Army.

By the end of the war, Revlon was listed as one of America's top five cosmetic houses.In November 1955, Revlon went public. TheIPOprice was $12 per share. BRIEF HISTORY

TIMELINE FOR REVLON INC.YearEvent/Happening 1932Revlon was formed1955IPO was done. 1968One of the founder Charles Revson Died2001Reintroduced Ultima II, a 33 year old brand2002Joined with Pacific World Corp. for the manufacturing of mail care products2003Received cash from MacAndrews and Forbes Holdings Inc.2008Introduced natural make up2009Eliminated 400 positions from the company.2010Mr Perelman owned 78% of Revlon2010Spent $24 million on R&D

INTERNAL FACTORSCOPORATE SOCIAL RESPONSIBILITYCore belief, active support to women health programs $65 Millions research programs.Look good..feel better programCancer centre at UCLA

LG..FG an organization that helps women to deal with the post treatment trauma and physical impact on their appearances University of california 7MANAGEMENT CEO , 5 VPs (Geographic Division)5 Major Departments.Alan Ennis , 4th CEO Realignment and restructurationLaid off 400 positions Resulted in $30 Million, $15 Million (2009)

INTERNAL FACTORSFinance , marketing, Operations, admin, RnD8MARKETING AND RnDCustomers: Large Merchandisers and Chain drug storesWal-Mart pitched in 22% of total sales.POS and Samples E-retailing All mediums of AdvertisingSales Promotions , In-Store Promotions

INTERNAL FACTORSEretailing through website Facebook Page has approximate 278000 Likes9DISTRIBUTIONStrong distribution network.

Production Centers have been reduced and centralized.

ISO-9000 Certification

Revlon Phoenix

INTERNAL FACTORSBest use of capital assetsImproved utilization

10SPACE MATRIX FINANCIAL POSITIONWORKING CAPITAL 1LIQUIDITY 1OPERATING INCOME 0.5CASH FLOWS 0.5TOTAL 03STABILITY POSITIONDEMAND VARI. -3RATE OF INFLA. -4COMPETAT. PRESSURE -4PRICE ELASTICITY -3TOTAL -14COMPETATIVE STRENGTHMARKET SHARE -4PROD. QUALITY -3.5CAPACITY UTILI. -3CONTROL OVER SUP. -3TOTAL -14.5INDUSTRY POSITIONGROWTH POTENTIAL4PROFIT POTENTIAL4EASE OF ENTRY 2RESOURCE UTILIZATION3TOTAL 13

X AXIS =0.35Y AXIS= -2.75

COMPETATIVEINTEGRATIONS MARKET PENETRATIONMARKET DEVELOPMENTPRODUCT DEVELOPMENTEXTERNAL FACTORSDEMOGRAPHICSAging populationRacial and ethnic populationBaby boomers with HIGH disposable incomeHispanic population GREW 43%Opportunity in Asian countries 60%Middle East and North Africa newly won freedoms

DEMOGRAPHIC TRENDSTrend towards organic productsCOSMECEUTICAL offeringsSold at Medical outletsSocial mediaMale oriented groomingTeen market in U.S to grow

EXTERNAL FACTORS

ECONOMIC ISSUESLOW PRICE strength for Revlon in poor economic timesEmerging economies are uncertainDeveloped economies have SLOWED DOWNDollar exchange rateEmerging middle class in Asia, Africa, astern Europe and Latin America

EXTERNAL FACTORS

ECONOMIC ISSUES

GROWING POPULATION in the international marketGROWTH OF 40% expected in Brazil, China, India and RussiaTunisia, Egypt, Libya and Algeria newly won freedom countriesEXTERNAL FACTORS

COMPETATIONLOreal Largest Cosmetics company operating in over 180 countriesCosmetics, Hair Care & Fragrances (Giorgio Armani & Ralph Lauren)LOreal Paris, Maybelline, The Body Shop, GarnierBrand Ambassadors: Beyonce, Gwen Stefani

LOrealRevlon2009201020092010Total Assets25620.226448.7794.21086.7Sales1922021445.61295.91321.4Operating Profits2835.83362.7170.8199.817Avon Products - #1 Direct Seller 6.5M RepresentativesAvon Color, Avon ClearSkin, Skin so Soft, SilpadaDoor to Door selling & Internet Brand Ambassadors: Reese Witherspoon, Selma HayekNet Sales $10863M Net Earnings $606M as compared to $79.8M

Estee Lauder 150 CountriesEstee Lauder, Clinique, Tommy Hilfiger, DKNY, MAC, Ja MaloneBrand Abassadors: Carolyn Murphy, Elizabeth HurleyNet Sales $7766M Net Earnings $482M as compared to $79.8M

Procter & Gamble - 180+ Countries (Mass Consumer Market)Hair Care: Pantene, Head&Shoulder, Natural Instinct, Nice N EasyFragrances: Gucci, Escada, Dolce & Gabbana, Hugo Boss, OldSpiceSkin Care & Cosmetics: Olay & CoverGirlSales $19.5B Profit $2.7B

Unilever 180+ Countries (Mass Consumer Market)Skin Care: Dove, Ponds, VaselineHair Care: Dove, SunsilkFragrances: AxeProfits 2010 are $5057.8M as compared to $79.8M

Urban Decay, Bath & Body Works, Banana Republic, Victoria Secrets

FINANCIALSGROWTH RATIOSALES 2010 1.96% 2009 -3.77%Net income 2010 5.7% 2009 -15.71OPERATING INCOME 2010 17.45% 2009 0.604%

CURRENT RATIO2010 2009 2008 20071.494 1.30 1.32 1.35QUICK RATIO2010 2009 2008 20071.64 2.30 2.368 2.2166DEBT/ASSET RATIO 2009 2008 20071.64 2.30 2.368 2.2166FINANCIALS

STRATEGY YEAR 1Divestiture, To payoff debts, survival of the firmYEAR 2Market Penetration, through Advertisements and Online MarketingYEAR 3Product and Market Development , Asian Pacific Mens Grooming Line