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Revlon Internal and External Analysis

Table of Contents

BACKGROUND

Current Mission, Objectives, Strategies

INTERNAL AUDIT

Weaknesses

Internal Factor Evaluation (IFE) Matrix

EXTERNAL AUDIT

Opportunities

Threats

External Factor Evaluation Matrix

STRATEGIC ANALYSIS

SWOT Matrix

SPACE Matrix

Grand Strategy Matrix

Internal External (IE) Matrix

The Quantitative Strategic Planning Matrix (QSPM)

RECOMMENDATIONS

Mission Statement

Short-Term Strategies and Objectives

Functional Approach

Management

Accounting and Finance

Marketing and Sales

Research and Development

Human Resource

The Management Information System (MIS)…………………………………………………………..23

Production and Operations ……………………………………………………………………………..23

    REFERENCES………………………………………………………………………………………….24

BACKGROUND

Revlon was founded in 1932 by Joseph and Charles Revson. The organization began with launching a new product that comprised of nail polish, which came in many colors other than the common red. The term Revlon is derived from combining the name Revson and Lochman. During its time, Revlon was the only company that had nail polish of different colors. Therefore, it has an enormous advantage over other competitors, which led to its development as a multi-million dollar organization within six years since it was founded. In the early 1940s, Revlon had managed to improve its product line resulting to the innovation of more beauty products like lipstick that made the company popular (Forest, 2016). Revlon decided to go public in 1955, which was evidently a positive move. It resulted in an increase of the stock price with over 200% within the initial two months of trading. The next two decades saw Revlon establish many cosmetic related companies including expansion of its products portfolio. However, the 1980s was not good for Revlon since it has started to be threatened by competitors like Proctor and Gamble, Cover Girl, and Estee Lauder. The situation led to a strategy by Revlon to sell to Pantry Pride. Hence, it stopped being sold in department stores and started being a mass market beauty brand. High profile models, Christy Turlington, Cindy Crawford, and Claudia Schiffer, were hired by the company to boost exposure and sales for the firm in the 1980s. At the beginning of the 1990s, Revlon introduced the Color Stay line and hired the model Halle Berry to promote the products. It has been Revlon’s strategy to use models for promoting and boosting the sale of its products. For instance, when Mirage Cosmetics and Colomer Group were acquired in 2011 and 2013 respectively by Revlon, the company hired both Olivia Wilde and Emma Stone to promote their products.

The headquarters of Revlon is in New York City, and it boasts a huge line of beauty and personal products. Revlon now offers many products including make-up, blush, deodorant, skin care products, lipsticks, hair and nail products. It includes more marketed brands like Mitchum, Jeannate, Charlie, Revlon ColorSilk, Pure Ice, Sinful Colors, Almay, Gatineau, and Ultima II. Revlon conducts its business around the globe with the help of its sale representatives, sales force, independent distributors, and the licenses that allow its selection of manufacturers that provide complementary beauty accessories and products.

Current Mission, Objectives, Strategies

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’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.

Revlon’s vision is to establish the entity as the quintessential and the most innovative enterprise with regards to beauty. The entity intends to offer products that improve the general feeling of the consumer making them feel beautiful and attractive. 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 (Forest, 2016). 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.  Revlon also focuses on following organic growth opportunities within the existing brand portfolio and among the existing retailers. The mission includes following opportunities to advance the geographical presence of the company. Revlon also intends to improve its cash flow through activities like progressive management of the working capital and also concentrating on the best return on capital spending. Another strategy of Revlon is directed to people where it intends to attract, develop, and support employees that align with the entity’s innovative culture while at the same time inspiring a creative drive which demonstrates the roots of the company’s vision and implementation of the entity’s strategy.

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 – Revlon has an established market in the United States, which allows most of its revenue to come from the region. An established market in the region translates to high competition against the competitors in the US region. Also, it means that the entity is trusted in its initial region, which promotes its brand and capacity to dominate the area through the establishment of new opportunities. An established market in the US means that the entity has a foundation to improve its external markets to improve its position in the global market. When Revlon’s sales are assessed based on geographic and product categories; 55% of the company’s sales are made in the United States while 62% of the company sales are from fragrances/skincare/cosmetics.
  2. The company manufactures most products, and it does not need to outsource – Therefore, the company can reduce unwanted manufacturing costs and pass the cost savings to the customers. The factor is a strength because it positions the company to improve the strategies of increasing profit and hence revenue for the company. Besides, it ensures increased experience in the field of manufacturing that could generate returns from the company through other companies. Controlling manufacturing allows the entity to control the prices it sets to its consumers and could end up beating the competition regarding prices. Revlon owns production facilities in the United States in New Jersey, Irvington, North Carolina and Oxford. The plants owned by the company are certified by ISO-9000 which indicates they are committed to quality standards of manufacturing. The company can plan for long-term growth through utilizing and focusing on the top quality production and distribution systems. For instance, the Revlon Phoenix site distribution center deals with raw materials and other components including finished stock of personal care and cosmetics products.
  3. Celebrity Support as Spokesperson – Revlon includes its strategy celebrities who endorse their products and mark them as important for the public. Celebrities are idealized by the public who are also the customers. Therefore, celebrities have the chances to boost the demand for a product since they are followed by the public. The public thinks the stars look nice and when they endorse a specific product, the public will endorse it too with the motivation of looking like a celebrity improving the brand popularity and revenue. Despite the risks and costs connected with the technique of using celebrities in advertising, it has been utilized extensively in the present era. Using celebrity endorsements is currently becoming pervasive in the field of advertising and communication management. A lot of money is spent every year on celebrity endorsement contracts where they are given the responsibilities of being effective spokespeople for the products to increase the sales. In the 1940’s, Revlon depended on advertisements that were mostly hand-drawn and black and white before they first employed color advertising in 1945. The 1950s had Revlon hire one of the supermodels on the globe to star in an advertisement that became one of Revlon’s memorable of all time. However, Revlon still went ahead to upgrade from using fashion models to hiring movie stars to endorse their products.
  4. Brand Longevity – The brand has grown substantially in almost a century that it has been in existence. Longevity allows the company to dominate in various fields and levels. Longevity equals a diverse experience and an increased capability to make substantial changes in the company. Brand longevity also translates to its stability over the long term which is the goal of any business. Longevity also means that the company has developed trust and a pool of trusting customers that recreate the brand. Revlon has a history of more than 80 years of providing women with high-quality products at affordable prices. The company began with nail enamel their first single product. The product- nail enamel- was made with pigments while usually; it is dyed that are used in the manufacturing of nail enamel. The strategy facilitated a path for Revlon to mark a huge variety of color alternatives to its customers very fast during the time. With three executives in the company, the company took only six years to turn their small nail enamel into a huge multi-million dollar firm. Revlon is one of the most renowned brands and companies around the globe.

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 – The long existence of Revlon is affected by the rapidly changing global state with the evolution of technology and most operations around the globe. Globalization should be integrated with regards to the operations of the company and resources employed for carrying out the operations. Revlon is slugging with regards maintaining the pace of globalization.
  2. Fewer diversified products compared to the competitors – The competing businesses are increasing their vigor with diversified products in the product categories. Diversity allows customers to try new products while facilitating learning opportunities for new products and services. Lack of diversification might lead to the loss of customers that find the products they love from another brand. It is a significant weakness for the company considering its knowledgeable customers that demand a huge selection.
  3. Huge budgets for advertising – Revlon’s industry demands a huge package of advertising to keep consumers updated about the trends. Competition is present even with the level and quality of advertising. The different product categories demand a huge budget for quality and effective advertising (Forest, 2016). As a result, the company spends a huge amount on adverts, which affects its returning profit.
  4. The insecure attitudes of employees – Revlon’s employees, are noted to exhibit insecurity with the company based on their performance which affects innovation. It is a weakness because employees play the hugest role in the business and they should be well equipped to handle their tasks. Therefore, insecure employees indicate a weakness in the company and the need to employ a program for employees that would empower them towards reaching specific goals.

Internal Factor Evaluation (IFE) Matrix

The Internal Factor Evaluation (IFE) matrix is a tool employed to analyze the weaknesses and strengths of the functional parts of the business. The following matrix intends to assess the strengths and weaknesses analyzed above. The IFE is developed using the five-step process detailed below.

  1. Recording of the key internal factors beginning with strengths and their respective numbers as analyzed in the text.
  2. The weight is then assigned to the key internal factors represented by the values 0.0 to 1.0. 0.0 has the least weight or significance while 1.0 is viewed as highly important. The weight assigned is relative to how it impacts the successfulness of the company.
  3. Each factor is assigned a rating ranging from one to four. A rating of one indicates the least emphasis while a rating of four indicates the highest emphasis.
  4. The weight of the key internal factors is multiplied by its respective rating to give the weighted score.
  5. The weighted scores of all the factors are added up to give the total weighted score of the firm
Internal Factor Evaluation Matrix
Key Internal Factors Weight Rating Weighted Score
Strengths
1) Established U.S. market 0.25 4 1.0
2) Most products are made by their very own company. Therefore, they don’t have to outsource 0.15 3 0.45
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

The Internal Factor Evaluation Matrix is created considering how the factors are significant for the company. The highest rating was given to Revlon having an established market in the United States. The factor is highly significant because it represents the goals of most companies, which are gaining a market share. Therefore, having a huge market share in the US is a significant factor given 25% of the total weight given to a variable. The factor plays a 25% chance in the successfulness of the company on its own and hence its recognition as a key internal strength. The strength is based on Revlon beginning its business early with a high pace that allowed it to grab a huge market share before the competitor grew. The rating of 4 is also given to the factor which is the highest rating of importance. Market share is critical with regards to any business, and it serves to push the organization to its desired height. Therefore, the factor is highly rated and also shows the amount of weight it carries for the future and success of the company.

The rating of three was given to the factor of Revlon having the capability to manufacture most of its products. The same rating is given to a weakness of globalization where Revlon is observed to slug behind with regards to integrating the advancement of technology and globalized operations. Besides, it slugs in opening different channels around the globe to dominate its competitors appropriately. These factors are also given equal weight to the company (Forest, 2016). The ability of a company to manufacture its products provides control over many factors especially the cost of production and the prices of the products. Besides, it corresponds to the company’s capability to globalize and open different channels that maximize its revenue and profitability. These are existing opportunities to improve the profitability and income of the company. Therefore, they are given the same rating because they represent actions that the company must take to influence growth, development, and profitability. For instance, a company is encouraged to manufacture its products to control the costs and set the desired product prices that may create a foundation for a competitive edge with the competitors. The strategy influences the growth of revenue while globalization also increases the opportunities for revenue generation. Therefore, they deserve the same weight and rating based on their contribution to the growth of the company.

The rating of 2 is given to four factors where two are strengths, and two are weaknesses. The initial factor is using celebrities as product’s spokesmen to improve the sales of the products. The factor is given the same rating with the longevity of the brand which improves it’s trustworthy to increase its sales over the new competitors. With regards to the weaknesses, the rating of 2 is given to the low level of diversification of the products and the advertising budget. The level of diversification is viewed to limit the company as compared to other players in the field. It is viewed as if the entity is being crashed slowly by its competitors. All these factors are also given the same weight of 0.10 indicating that they represent 10% of the impact based on the successfulness of the company. The lowest rating was given to insecure employees since it doesn’t mean it is the entire group of employees. Although the weakness has a significant impact on the company, it is not as weighty as other factors, and it can be dealt with within the company without costing substantially. Therefore, it only has a 5% impact on the overall performance of the company while it is rated 1 as the least important for Revlon.

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. Partnerships, joint ventures, mergers, and acquisitions are other organic approaches to improvement and gaining ground in the market and against the competitor. Revlon could leverage the opportunity of long existence in the industry, experience, and connections to join its business operations with other entities that could propel its growth to the desired levels. For instance, the entity currently operates in three fields where there is the consumer department, the professional department, and other departments. The professional unit is made up of the businesses that were acquired after the entity acquired the Colomer Group Participations, a Spanish entity referred to as Beautyge Participations. The other segment is comprised of the companies acquired after the entity purchased the CBBeauty Group and other entities related to the company. The acquisitions present opportunities to grow and expand the foundation improving the stability of the company on the ground level
  2. Utilize all marketing opportunities to promote product awareness – Currently there are diverse marketing channels that can be integrated into any industry to increase the level of marketing and brand promotion. Revlon has an extensive line of products that cover a wide range of price points within very many retailers both nationally and internationally. The company should increase its vigor of marketing in social media and other digital marketing platforms like print advertising, outdoor, television, and public relations. Also, they should consider a point of sale merchandizing such as coupons, displays, and samples including other experimental incentives. Revlon’s marketing is tailored to insist on a uniform global image that aligns with its portfolio of significant brands. Currently, the company combines its advertising and marketing campaigns like the ‘Revlon Love is on’ campaign. The company partly combines with other focused marketing programs like the customized, retailers and tailored point of purchase including other focused marketing programs.  The company also utilizes cooperative advertising programs, company sub-sized demonstrators and the coordinated in-store displays and promotions. Also, the company utilizes other marketing strategies like the trial-size products and couponing for the entity’s emerging products while they also promote trial and purchase in-store.
  3. Revlon should focus on the male consumers considering their established brand – Revlon began its journey with women products and established its name while concentrating mainly on women products. However, the company has currently grown to a level where it also incorporates men’s products. The company has been standing for a significant period and possesses the capacity to convince the male clients about its prowess in creating their products.  For instance, it has the American Crew and d:fi in its professional brand’s segment that specializes in selling men’s conditioners, Shampoos and other hair care and grooming products for utilization and sale by professional salons employing the American Crew brand name. The brand American Crew is viewed as the official supplier to men’s needs offering growing products that give the desired usage experience and an improved personal image of the modern man. It is the top salon brand establishes to cater for men and is present in more than thirty countries. The brand should leverage the men’s space as time goes by to diversify its target customers.
  4. Open online and internet operations – Currently, the internet and most online platforms are heavily utilized by the public, and they represent a significant opportunity for growth of companies when employed for marketing. Most brands have revolutionized their operations and taken them to the internet where they are targeting a huge volume of consumers as well. The current trend has companies distributing their products in physical locations in the retail stores while still operating e-commerce websites that sell the same products. Revlon has distinct websites for brands like Mitchum, CND, American Crew, Revlon Professional, Revlon ColorSilk, Almay, and Revlon (Forest, 2016). Each of the websites comprises of the respective products and promotional information of the brands that is regularly updated to align with the current products of the company and other promotional, marketing and advertising campaigns.

Threats

  1. Government instability and fluctuation of exchange rates in some jurisdictions – Revlon is subject to the regulations by FTC (federal trade commission) and the FDA (food and drug administration) in the United States. Also, it is subject to regulations in other foreign, local, state and federal jurisdictions including the ones in Canada, European Union and other regions where it hosts its operations. For instance, the manufacturing facilities owned by the company in North Carolina are registered with the FDA that allows it to manufacture cosmetics and other beauty-care products that consists over-the-counter drug ingredients like anti-per spirant deodorants, sunscreens, and anti-dandruff hair-care products. The regulations in the various regions where the company operates are tailored to protect the environment and the consumers (Forest, 2016). However, the fact that the products are subject to international, state and federal regulations which could impose adverse effects on the business or financial condition of the company due to the operations.
  2. Intense competition with other players in the industry – Revlon’s industry is prevalent with competitors, and hence the competitive forces are very high. The entity’s cosmetics, beauty, and hair care categories in business are infested by stiff competition. Some of the notable competitors of Revlon include L’Oreal S.A., Avon Products, Procter & Gamble Company, Shisedo Co, Coty Inc, Hand & Nail Harmony, Inc, Markwins International Corporation, Oriflame Holding AG, The Estee Lauder Companies Inc., Boots UK Limited, Elizabeth Arden, Sephora, Johnson & Johnson, Mary Kay Inc., Henkel AG & Co., and Kao Corp (Forest, 2016). The risk factor in competition is high in the beauty and hair and cosmetics products business could have a substantial effect on the operations of the business. Therefore, Revlon is attempting to compete by the development of quality products that include innovative features, finishes, shades, packaging, and components. The entity is educating its customers and the salon personnel about the benefit of using the company’s product.  Revlon is anticipating and responding to increase the demands of the clients and salon personnel in a timely approach which includes timing of introduction of new products and line extensions. Revlon works to maintain a good image and desired brand recognition.
  3. Customers changing preferences – The society is affected by many forces that divert consumers from their usual products. The direct forces are the competitors that are consistently advertising and promoting their products and threaten to change the preference of the consumers. Also, there are campaigns against the use of cosmetics and related products connected with cancer which discourage people from using products in this industry. As a result, customers preferences change, and they refrain from using the products. However, the threat is countered by the almost similar proportion of customers that enroll in using these products.
  4. The fast pace of globalization and the cost of management – The fast pace of globalization is a significant threat to the companies since the consumers want to move with the trends. Therefore, the brand has to keep on upgrading its operations and output in terms of services, marketing and advertisement, packaging and all fields of the company. The cost of moving with technology is also relatively high considering the various changes that have to be made in the highly dynamic world.

External Factor Evaluation Matrix

The external factor evaluation (EFE) matrix allows the strategist to assess the opportunities and threats facing a company. These are the external factors affecting the company, which could either be competitive, technological, governmental, environmental, demographic, cultural, social or economic. The EFE Matrix is designed using the following four-step procedure:

  1. Record the external factors beginning with the opportunities and then the threats.
  2. Each factor in the opportunities and threats must be assigned a weight between 0.0 and 1.0 where 0.0 represents the lowest importance to the health of the company while 1.0 has the highest significance.
  3. A rating ranging from one to four is then assigned to the factor to demonstrate how the company is responding to the environmental factors (opportunities and threats). A rating of four signifies a strong response; a rating of 3 is a good response, a rating of 2 is an average response while a rating of 1 indicates a very weak response.
  4. The weighted score is derived from the product of the rating and weight of each factor
External Factor Evaluation (EFE) Matrix
Key Internal Factors Weight Rating Weighted Score
Opportunities
1) Revlon could endorse partnership or joint ventures with other players in the industry which is intended to increase the chances for new opportunity 0.15 3 0.45
2) Utilize all marketing opportunities to promote product awareness 0.15 3 0.45
3) Revlon should focus on the male consumers considering their established brand 0.05 2 0.1
4) Open online and internet operations 0.10 3 0.30
Threats
1) Government instability and fluctuation of exchange rates in some jurisdictions 0.15 2 0.30
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

The highest weight in this EFE matrix is given to the intense competition of other players in the industry. It is assigned a weight of 0.20 because the competition force is consistently exerted and felt by the company. It means that the company does not have a chance to slug or the close range competitors would overtake it. The fact is given much weight because it prompts the company to keep on assessing appropriate strategies to implement to stay ahead of its competitors. Revlon has to keep on marketing its products extensively and promoting them to stay vigorous and recognizable in the industry. Otherwise, failing to stay competitive would cause its immediate drag against its competitors. Therefore, the weight of external competitors is substantial in this case considering that they are many and all significantly established. The threat of competitors is considered given the most weight because the competitors incorporate consistent strategies to beat Revlon and gain its market share. The factor is given the highest rating of 4 to indicate the Revlon is aware of its significance and putting constant effort to ensure that it competes adequately to maintain its position. Revlon competes in specific product categories against several multi-national manufacturers in both the professional and consumer segments. Also, it expands its store-owned brands and private label in the consumer segment as a competitive strategy. Revlon also ensures to compete in the products sold in the professional salons, large volume retailers and the demonstrator assisted retailers. The brand works to ensure that it has exerted competitive forces in the products sold in the department and prestige stores, door-to-door, television shopping, one-stop shopping beauty retailers, specialty stores, perfumeries, e-commerce and other distribution outlets.

The 0.15 weight is the second highest in the EFE matrix and is assigned to three factors where two are opportunities, and one is a threat. In the opportunities, Revlon is expected to take advantage of partnerships, joint ventures, mergers and acquisitions that enable it to build stability while increasing its capabilities on the ground level. Also, Revlon is expected to integrate diverse marketing and advertising strategies to promote the awareness of its products and improve the sales. The threat is based on political issues and regulations in other jurisdictions. These factors are given the same weight based on their impact on the success of the business. Partnerships and joint ventures and marketing techniques all play to improve the company in terms of revenue or ensuring it does not capsize. The level of benefit or returns they pose is relative to the effort and strategies likely to be incorporated into the company. However, they are significant opportunities that the company should consider when attempting to improve. On the other hand, the government regulations and factors like political instability are highly significant to the health of the company. Therefore, they are given the weight of 0.15 only because of their rarity to happen but should have more weight considering what they mean to the success of the company. A business can be completely affected by political instability on a specific jurisdiction. Also, it has to keep on assessing its production and operation standards to ensure they align with the regulation standards of the jurisdiction. Violations in such areas could result in heavy financial fines imposed by the jurisdiction and a spoilt reputation which would mean a lot to the brand. However, these factors are assigned different ratings based on how Revlon is responding to each of the factors. The company prioritizes the opportunities in terms of response than the threat of government instability.

Revlon has made various acquisitions to grow its base and hence the rating of 3 assigned to the factor of acquisitions, partnerships and mergers. The rating is good and not strong because the level of strong is represented by huge acquisitions of entities that are dominating in the industry. A rating of three is also given to the power of marketing since it is the key to getting customers and informing them about the benefits of the product. Government instability is rated at 2 because the company has little control over it. Also, it is one of the factors considered before establishing ventures in new jurisdictions. Therefore, ventures are set up in stable countries that promise stability. The weight of 1.10 is given to three factors where one is an opportunity, and two are threats. The opportunity is based on internet and online activities. They represent only a small margin of the clients right now, and hence it is given a weight of only 10% of the company’s effort.  The customer’s changing preferences, and the rate of globalization is also given a 10 percent weight for the company each since they are countered heavily by strategic objectives of the company. For instance, the customer’s changing preferences are met with strong marketing, advertising and promotional activities and hence a rating of 3 which translates to good in responding to the changing preferences of the customers. The fast pace of globalization is given a 10% weight on the health of the company and the effort the company should direct to factor. Although it is a threat, Revlon is well protected by its research and development department that intends to keep it updated on the changing forms in the industry and on the globe. Revlon believes that it leads the industry in the establishment of innovative and technologically improved beauty products and cosmetics. The entity’s research and development is ready to identify consumer changes in preferences and the need to guide the development of new products, lines, and promotions.

STRATEGIC ANALYSIS

The strategic analysis involves making subjective decisions based on the information at hand. The strategy analysis facilitates a clear view of the connection between strategies and objectives. The section will involve creation courses of action that will guide the entity in achieving its missions and objectives. The current mission, vision, objectives, and strategies of the company are linked with the information from the internal and external audit. A 3 step strategy is applied in the formulation of the framework where the initial phase is the input of the internal and external analysis information. The second step involves matching the key external factors with the key internal factors. The goal is achieved through the formulation of the SWOT and SPACE matrices and the grand strategy. The final stage is employing the QSPM matrix to select strategies that will be implemented.

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.

  1. The first step involves listing the firm’s key external opportunities; key external threats; key internal strengths and key internal weaknesses.
  2. The internal strengths are matched with the external opportunities and placed under the SO strategies
  3. The internal weaknesses are matched with the external opportunities and placed under the WO strategies.
  4. The internal strengths are matched with the external threats and places under the ST strategies
  5. The internal weaknesses are matched with the external threats and places on the WT strategies

The following is SWOT matrix for Revlon

Strengths Weaknesses Opportunities Threats SO WO ST WT
Established US Market Globalization Utilize partnerships, joint ventures, acquisitions and mergers Government instability and regulations Since Revlon has an established US market, it should focus on the male consumers The issue of globalization can be addressed through embracing acquisition, partnership, and mergers. Since Revlon has an established marked in the US, it should intensify the competition from outside forces Lack of sufficient globalization strategy might affect globalization on the firm and increase the cost of management
Company manufactures its products Minimum diversified products compared with competitors Apply diverse marketing opportunities Intense competition with other players Since Revlon manufactures its products, it should diversify its online and internet operations to improve sales The minimum diversified products can be coupled with the strategy of focusing on male products The fact that Revlon manufactures some of its products, it can focus on the changing customer preferences Revlon should diversify its products sufficiently to stay strong against the strong competition
Celebrity support as spokesperson Advertising budgets Focus on the male consumers Customers’ changing preferences Revlon has celebrity support as spokespeople, and therefore they should utilize diverse marketing techniques Advertising budgets can be observed by assessing the diverse marketing options that favor the entity Celebrity spokes people should be leveraged to curb the cost of globalization and marketing The high advertising budgets may hinder effective promotion of products to curb the changing preferences of customers
Brand Longevity Insecure Employees Diversify online and internet operations Fast pace of globalization and the cost of management The brand longevity of Revlon should be coupled with partnerships, acquisitions, and joint ventures. Brand longevity should help Revlon to stay stable against government regulations Insecure employs might lead the company to failure in standards in other jurisdictions.

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

Different factors should represent the industry position (IP), the stability position (SP), competitive position (CP), and financial position (FP).

A scale should be selected where for the FP and IP dimensions, +1 is worst and +7 is best. For the SP and CP dimensions, -1 is best while -7 is worst. FP and CP dimensions should be rated comparing the competitors while the IP and SP dimensions should be rated comparing other industries.

  1. The average score for SP, IP, CP, and FP is determined
  2. The average scores of each dimension are plotted on the right axis in the SPACE matrix where CP and IP are in the X-axis while FP and SP are in the Y-axis.
  3. The two points should be plotted on the X-axis while the other two points plotted on the Y-axis after, which an intersection x, y is plotted.
  4. The final step involves drawing a directional vector from the beginning of the SPACE matrix at o to the new point x, y. The location of the vector should direct whether the organization should implement the competitive, defensive, conservative or aggressive approach.

The data for the SPACE matrix

Strategic Position and Action Evaluation Plan Matrix (SPACE)
Financial Position Industrial Position Stability Position Competitive Position Conclusion
  • Minimum diversified products (+3)
  • Advertising budgets (+3)
  • Utilizing mergers, acquisition and joint ventures (+4)
  • 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)
  • Established US Market (-5)
  • Brand Longevity (-5)
  • Globalization (-3)
  • Diversify online and internet operations (-3)
  • Company manufactures most of its products (-5)
  • Insecure employee (-3)
  • Focus on male consumer (-4)
FP average = 3.3 

IP average = 3.3

SP average = -4

CP average = -4

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.

Grand Strategy Matrix

A grand strategy matrix is an important tool utilized to develop different strategies, and it is organized into four distinct quadrants. The first two quadrants are positioned above the x-axis while the other two are positioned below the X-axis. These quadrants can also be found on either side of the Y-axis. Each quadrant consists of the best strategies that an organization could undertake. In this case, the X-axis will represent the industry/market growth while the y-axis will represent the competitive position. A company will fall on the X-axis if it is exhibiting rapid market growth while it will fall on the Y axis if it is exhibiting slow market growth. If a company is considered to be in a weak competitive position, then it is placed in the left of the y-axis and right of the same axis if it is strong.

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.

Internal External (IE) 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
EFE total weighted Scores Strong 3.0 to 4.0 Average 2.0 to 2.99 Weak 1.0 to 1.99
High 3.0 to 4.0 I II III
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

The Quantitative Strategic Planning Matrix (QSPM)

The SWOT, SPACE, Grand Strategy and IE matrices required determination of a strategy that falls under product development, market development, market penetration, related diversification, backward integration, unrelated diversification, forward integration, horizontal integration, liquidation, and divestiture. The QSPM is employed for the organization of these strategies and for determination of the best strategy to implement. These four strategies can either be intensive strategies, integration strategies, diversification strategies and defensive strategies.

Intensive Strategies Market Development Product Development Market Penetration
Key Factor Weight AS TAS AS TAS AS TAS
Strengths
Established US Market 1.0 3.0 3.0 1.0 1.0 4.0 4.0
Company Manufactures its products 0.45 2.0 0.9 4.0 1.8 2.0 0.9
Celebrity support as spokes person 0.20 2.0 0.40 / / 3.0 0.60
Brand Longevity 0.20 / / / / 2.0 0.40
Weaknesses
Globalization 0.45 / / / / 2.0 0.90
Minimum diversified products compared with competitors 0.20 3.0 0.60 4.0 0.80 / /
Advertising budget 0.20 4.0 0.80 4.0 0.80 4.0 0.80
Insecure Employees 0.05 / / / / / /
Opportunities
Utilize partnerships, joint ventures, acquisitions 0.45 3.0 1.35 2.0 0.90 3.0 1.35
Diverse marketing opportunities 0.45 3.0 1.35 3.0 1.35 3.0 1.35
Focus on the male consumers 0.1 4.0 0.40 4.0 0.40 4.0 0.40
Diversify online and internet operations 0.30 2.0 0.60 / / 2.0 0.60
Threats
Government instability and regulations 0.30 / / / / / /
Intense competition with other players 0.80 / / / / 2.0 1.6
Customer’s changing preferences 0.30 / / / / / /
Fast pace of globalization 0.20 / / / / / /
10.2 7.05 12.9
Integrative Strategies Forward Integration Backward Integration Horizontal Integration
Key Factor Weight AS TAS AS TAS AS TAS
Strengths
Established US Market 1.0 / / / / / /
Company Manufactures its products 0.45 / / / / / /
Celebrity support as spokes person 0.20 / / / / / /
Brand Longevity 0.20 / / / / 2.0 0.40
Weaknesses
Globalization 0.45 / / / / 2.0 0.90
Minimum diversified products compared with competitors 0.20 / / / / / /
Advertising budget 0.20 / / / / / /
Insecure Employees 0.05 / / / / / /
Opportunities
Utilize partnerships, joint ventures, acquisitions 0.45 3.0 1.35 2.0 0.90 3.0 1.35
Diverse marketing opportunities 0.45 / / / / / /
Focus on the male consumers 0.1 / / / / / /
Diversify online and internet operations 0.30 2.0 0.60 / / 2.0 0.60
Threats
Government instability and regulations 0.30 / / / / / /
Intense competition with other players 0.80 / / / / 2.0 1.6
Customer’s changing preferences 0.30 / / / / / /
Fast pace of globalization 0.20 / / / / / /
1.95 0.90 4.85
Diversification Strategies Related Diversification Unrelated Diversification
Key Factor Weight AS TAS AS TAS
Strengths
Established US Market 1.0 3.0 3.0 3.0 3.0
Company Manufactures its products 0.45 / / / /
Celebrity support as spokes person 0.20 / / / /
Brand Longevity 0.20 3.0 0.26 3.0 0.26
Weaknesses
Globalization 0.45 3.0 1.35 3.0 1.35
Minimum Diversified products compared with competitors 0.20 / / 4.0 0.80
Advertising budget 0.20 / / / /
Insecure Employees 0.05 / / / /
Opportunities
Utilize partnerships, joint ventures, acquisitions 0.45 3.0 1.35 2.0 0.90
Diverse marketing opportunities 0.45 3.0 1.35 3.0 1.35
Focus on the male consumers 0.1 4.0 0.40 4.0 0.40
Diversify online and internet operations 0.30 2.0 0.60 3.0 0.90
Threats
Government instability and regulations 0.30 / / / /
Intense competition with other players 0.80 / / / /
Customer’s changing preferences 0.30 / / / /
Fast pace of globalization 0.20 / / / /
8.31 8.96

According to the QSPM, Revlon should undertake a market penetration strategy since it scored the highest STAS of 12.9. Market penetration is expected to give the results of improved sales and market share. The strategy is also favorable considering that the industry is dominated by many competitors all with their significant market share. Market penetration, in this case, would demand differentiation strategies that would push the company to the desired levels.

RECOMMENDATIONS

The entire research intended to identify the best strategy to be implemented by Revlon to improve its success position. The QSM suggested market penetration as the appropriate strategy to be undertaken by Revlon. The recommendations will focus on the mission statement, short-term strategy and objectives, long-term strategy and objectives, the functional approach, management, accounting and finance, marketing and sales, research and development, human resource, management information systems and production and operations.

Mission Statement

A strong mission statement needs to consist of the nine core elements of a mission statement. It needs to state the function of the business, the target customers, the target region, the values of the company, the technology intended to be employed, the relationship with employees, strategic positioning, the financial objectives, and image. The recommended mission statement for Revlon is: To lead the globe in the field of styling and providing women around the globe with cosmetics and personal care and beauty products. The company is guided by determination and integrity to employ years of experience and equipment applied by the best employees. Revlon is the choice for most women, and it intends to maintain its positivity to increase sales around the world. The mission statement that I recommended for Revlon is: Revlon is a worldwide cosmetics company that specializes in beauty, fragrance and hygiene products, whose mission is to make people feel glamorous with exciting, innovating, high end products that people can afford. I took some of the original mission statement and modified it and included all the nine key components to make a more purposeful mission statement.

Short-Term Strategies and Objectives

Revlon needs to undertake the market penetration strategy as the short-term objective. Market penetration will be undertaken through diversification of the marketing and advertising channels and opportunities. Also, it will involve diversifying the product categories to reach all types of individuals based on their character. The strategy also includes differentiation of the company’s products so that they dominate in the shelf-spaces while competing against other competitors. Market penetration is expected to improve its sales when it is conducted effectively.

Long-Term Strategy and Objectives

The long-term strategy for Revlon should be diversification and globalization. The company’s research and development team should unveil new approaches to improve efficiency in the operations. The entity should make smart acquisitions and partnerships that would improve its value and base on the ground. Globalization was among the weaknesses noted for Revlon while it also had weaknesses in the diversification of products and marketing approaches. Since the entity is already established in the market, it should take advantage of diversification in all areas of its operations.

Functional Approach

The market penetration strategy will be assessed how it will be implemented in the entire organization considering the various functional department of the firm. Therefore, the following section presents the role of each functional department in the implementation of the market penetration strategy.

Management

The management has the role in assessing the company and determining the dormant areas and the fields where the output is not as expected. Managers plan and coordinate the company which is among their duties, and they should indicate the underperforming parts of the business. They should be able to determine where the change should be implemented in the company. Also, they have a role in creating a robust strategy to be implemented by the slagging department.

Accounting and Finance

Accounting and finance have a role in determining the cost-efficient marketing approaches to be employed by the entity. The department should determine how resources are allocated to advertising and marketing. Market penetration is based on passing the message about the product and improving the product to appeal to the customer. Therefore, the accounting and finance should focus on consistently funding product design for the sake of market penetration.

Marketing and Sales

Revlon is currently established, and it uses celebrities for publicity purposes. Therefore, it needs to attempt other approaches like television commercials and social media videos which would work well to promoting market penetration. Marketing and sales department should play the hugest role in designing strategic objectives that will enhance the marketing penetration strategy. Physical marketing and advertising is also a strategy to be employed to improve market penetration.

Research and Development

Research and development is a huge part of the market penetration strategy. It will include targeting the customers to determine their preferences and needs. Research and development will guide the strategies of most departments in achieving adequate market penetration. The department will need to assess the current trends in marketing to determine the best approaches to be used for market penetration. Revlon will need the department to provide information on the latest and efficient approaches that promise rapid change within the organization.

Human Resource

The department understands that it needs the best sales force to achieve its market penetration strategy and objectives. Also, the human resource will be responsible for ensuring that the existing employees are well trained and less insecure which improves their performance towards market penetration. The human resource will need to determine the best individuals to employ advertising, marketing, and promotional activities.

The Management Information System (MIS)

A solid management information system department is expected to play a critical role in keeping the company ahead of its competitors based on important information regarding the market and related analyses. The information system will allow market penetration by guiding on the appropriate channels to be used for communication to improve the target reach. Also, they will determine the appropriate messages with the most responses that can be incorporated into marketing campaigns.

Production and Operations

Production and operation process allow for market penetration when they are tailored to meet the needs of the consumers. Production should be based on the customer preferences. Besides, production should be combined with improved packaging designs for effective market penetration. The product and operations department also needs to reduce the operational costs so they can be leveraged for marketing and advertising to improve sales.

References

Revlon logo found at:

Retrieved September 06, 2017, from https://www.google.com/search?q=Revlon%2Blogo&source=lnms&tbm=isch&sa=X&ved=0ahUKEwj0nP6UvuDXAhUBNSYKHSo_AaQQ_AUICigB&biw=1366&bih=652#imgrc=ruwPWccmQGgn-M:



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