Revlon Case Study

Revlon is kn deliver as one of the best enhancive companies of alone condemnation and is considered to be one of the domain of a functions largest. The primitive core products of Revlon ar specialty hide products, salon-quality beauty and hair products to take its drugstore line of makeup. Revlon is based in raw(a) York and traded publicly. Their goal and vision has been to consistently raise quality beauty aids and products at a reasonable price. In the in the end few years Revlon has been struggling. With a debt almost at $2. 3 billion it has necessitate the ornawork forcetal giant to try and conformation ways to reduce this debt.The research and using of resilient Radiance, a line of decoratives for cured women was announced on January 2006, this roll step forward was suppose to help revitalize gross revenue and profit. The roll prohibited of this product did not f ar good and was not veritable by the market. The already existing rivalry had lower prices for their decorative products. These were universe exchange by major retailers wish Wal-greens and Wal-mart, whom already had another(prenominal) Revlon products on its shelves. This being the campaign the product line was su exited nightspot months after being introduced. It is projected that this rig back is going to monetary value the fraternity in the $100 megs.In addition to the Vital Radiance launch, thither had been plans to release a new fragrance in 2006 too. This was detain until the debt that was incurred from their decorative introduction could be structured. afterward issuing a $185 million in hackneyed to attempt to raise coin to lessen the debt, MacAndrews & Forbes Holdings agreed to purchase stock and also agreed to purchase ever soy stock not bought by electric current stakeholders. The following paragraphs below we impart prove how the future of Revlon is going to be opinionated by changes in demographic changes, kind trends and how the compe tition adjust to the urrent economy and the reception of internal factors that contri yete to the success of the comp some(prenominal). The demographic composition of the dusk in States has impacted the cosmetic and ad hominem c are effort. A checkmate of major changes which have occurred that need to be considered, are the aging population and pagan and racial population changes which are prudent for a major shift change. The conclusion amongst 1946 and 1964 approximately 75 million Americans were born in the U. S. this number is topnotch symbolic for the cosmetic industry.These Americans are referred to as the go bad boomers and the major dilemma with the baby boomers they do not standardized to travel by money. Research has determined that the baby boomer generation have not changed how they spend money and the women from this era are works longer than in past years. A couple of other factors to consider is the U. S. adolescentage market along with the pagan an d racial make-up. According to data collected the teen market is judge to be at around 20 million by 2010, this teen market consist of teenagers between the ages of 12 and 19.Along with this exploitation is the African Americans which is the largest of the ethnic groups is quickly being surpassed by the Latino population and this ethnic group is expected to be the largest by 2010 and should surpass 40. 5 million individuals. In addition to this multi-cultural offshoot being experienced without the United States, the non-hispanic is expected to shrink 68% by 2010. If Revlon can take advantage of this growth and expand to the foreign markets where analysis has shown that there will be a throne of opportunities for potential sales of cosmetic and personal care products throughout the world.Obviously with when there are corroboratory aspects in cable, there is forever and a day some type of negative act that could potentially affect the overall business climate and growth of a caller-out. In regards to Revlon, passel are more sociablely, chastely and fiscal conscious more than ever before. Older people unfortunately are a negative affect because they typically have destineed less usable income and have a less disposition for look good items, they are tack in their ways. Gas prices affect how people spend also and lastly the industry has always been under scrutiny for the misuse of animals that are used in cosmetic testing.So companies alike Revlon have to always be very aware that consumer watch groups are constantly monitoring what companies like Revlon are doing. Knowing this and maintaining social responsibility, will hamper companies like Revlon from being run through the courts thereby ruining their reputation and any potential growth to get out debt. Considering all these factors it behooves Revlon to really push the world markets so as not to limit themselves to U. S. sales, which currently is experiencing a recession which has diminish the dollar value throughout the world, so by taking advantage or global business and maintaining U.S. sales Revlon should be able to show a positive net income in the near future. Revlon like some(prenominal) other cosmetic and peel off care firms face competition in this industry that is out of this world. So many companies want a piece of this market, that it pop out to be saturated with all types of cosmetic companies. Women, obviously the largest consumer in the industry with men now desiring to maintain their youth like to shop at local drugstores, super values stores like Wal-mart and Kmart.Additional companies like Avon and the meshing have made it easier for the consumer to save time and money by using these types of sales. For Revlon, not only do companies, home shop and door to door type cosmetic firms, rede competition, but the major competitors such Procter and Gamble, Avon, Estee Lauder and LOreal are significant, that jinx U. S. sales and foreign market sales. Others like specialty stores Sephora and Body Shop to include Victoria Secrets and the intermission to name a few represent additional challenges.To add to the challenges currently set about Revlon, there is competition for the African market. historied models and singers alike have developed their own brands and capturing portions of the African market and advertise to the African American community. By studying and analyzing the cosmetic market it is requisite for Revlon to look to other avenues to make themselves more attractive to the consumer. By investing into the companion increasing their visibleness in the social realm will be significant in attracting a larger consumer base.Revlon invested a great worry of money on research and how to extend better services to women. More than $25 million dollars has been fagged thus far. to boot by using familiar faces to incite in amplifying Revlons fealty to social responsibility they are attracting more people. Singers like Sheryl Crow, who actively participates on a board for Revlon that is responsible for research cures for cancer in addition Ms Crow being associated with the field of study Breast Cancer Coalition, which is also supported by Revlon truly magnifies the maturity of the firm to help the ommunity. Revlon is committed to events that assistant fund raising opportunities to find cures in addition to supporting agencies like the National Council of Negro Women, and New York Women in pick out is indicative to the commitment to social responsibility. The reorganization of management to save money each year has been implemented by David Kennedy who is the CEO and was selected in 2006. His previous experience as Coca-Cola executive director and the previous CFO for Revlon made him a perfect fit for a lodge under stress.His plan to cut 8% of the Revlon workforce, which equates to about 250 positions, which is intended to save the society approximately $34 million dollars a year. By con red-bloodedating different functions throughout the party and reducing pose management allows for eht decrement in personnel. However, without a doubt when a company plans to save money, they have to spend money to get there. It is estimated that it will cost about $29 million dollars to restructure but as previously verbalise it is intended to save the company $34 million dollars annually thereafter.Once implemented it is essential to go after the market by changing or reorganizing marketing techniques. merchandising and advertising are key to the extract of Revlon. Revlon primary customers are the large merchandisers and image drug stores. Although the debt is high Revlon has until now kept up(p) the development side of its organization and is still is main objective. Without changing, developing and designing they would fall behind the major competitors. In 2006 Revlon spent a little over $24 million dollars on research and development, but most importantly hired clxx pe ople to accomplish this.Even through toilsome times, advertising continues to be the way to go and promote the company. Investing in common faces to be spokespersons such as Halle Berry, Julianne Moore and Eva Mendez, and so on , is attractive to the consumer and by using a variety of women of different ages markets their products to young and middle aged alike. The current manufacturing and distribution of Revlon has allowed the company to pull their resources and consolidate facilities.By reducing the bar of distribution facilities has allowed for spoke and hub operations, which allows a company to cover more locations from a star vantage point. With its current locations Revlon is well meet to manage its distribution points. The financial arithmetic mean during the restructuring period did not fare well with a net loss of $50 million dollars due to this the restructuring program is ongoing. Revlons commitment to build a solid brand and improve their organizational commitme nt abilities is their life line.