MBSA1213-02

STRATEGIC MANAGEMANT

Revlon, Inc., 2015

SESSION 2019/2020

SEMESTER 2

NAME : LUKSHMAN RAO HAIBABU

MATRIC NO : MBS181073

LECTURER : DR THERESA HO CHAR FEI

 TABLE OF CONTENTS

Organization Overview ..................................................................................................................... 3

Business Model Building Blocks ................................................................................................... 3
I. Customer segments: ............................................................................................................. 4
II. Value Proposition: ................................................................................................................. 5
III. Distribution Channels: ...................................................................................................... 5
IV. Customer relationship: ..................................................................................................... 6
V. Revenue streams: .................................................................................................................. 7
VI. Key resources: .................................................................................................................... 8
VII. Key activities: ...................................................................................................................... 9
VIII. Key partners: ....................................................................................................................... 9
IX. Cost structure: .................................................................................................................. 10
Business Model Canvas ................................................................................................................. 11
Organization Overview

Revlon cosmetics industry takes new step toward the technology side. Revlon was

founded in 1932, by Charles Revson and his brother Joseph, along with a chemist,

Charles Lachman. Ever since that Revlon industry has been growing rapidity in

innovation and technology in producing cosmetics. Competing with other companies

and keeping a growing market share n the world marker is a challenge task. In the

industry we could find many skin care products which are for women. Revlon business

organization is a functional structure. A functional structure is a group of members

working together in a organization in different functional departments such as

marketing, accounts, sails, research, etc. Special boards of directors, chairman direct

the organization while CEO, CFO carries out the directors’ muster strategy by

managing the company.

Business Model Building Blocks

A business model can be described by looking at a set of nine building blocks. To

get a good picture of Revlon’s business model this write-up describes its;
I. Customer segments:

A group of Revlon’s customers with distinct characteristics. Customers are the

livelihood of every company since the revue streams come from them. Revlon is a

beauty care focused organization and we can categorize female as the primary

group of customers and male as secondary group of customers. Revlon’s

segmented market which target women in all agers such as teen, parents and old

women.

Revlon produces a diverse range of product that appeal to a wide demographics

of women from ages between 20 to over 50 years old depending on the product

category. As Revlon has a wide brand portfolio that cater to a range of consumer.

Revlon make up category targets women aged 20 to 30. This demographic is

beginning to establish their cosmetic brand loyalty and stay committed to the brand.

Revlon’s hair colour targets women aged 20 to 40, who are looking for quality

products at affordable price compared to a salon. Revlon’s skincare targets women

aged between 35 to 50 as the products are age defying focused. The consumer

has average levels of income and is hard working middle class, professional

women. They have an energetic, healthy and busy lifestyle. The consumer is

committed to purchasing from brands that support and celebrate women as week

as being ethical. Revlon is a global company with products that can be found

worldwide and are easily accessible through being stocked at supermarkets, drug

stores and online.

 II. Value Proposition:

In align to Revlon’s vision “Glamour, Excitement and Innovation through high-quality

Revlon’s bundles of product and service that satisfy the customers segments’ needs.

Revlon able to offer a wholesale price to attract the long-term customers. For instance,

on lipstick products since it is one of the common items used by all level female

segment. The wholesale pack can be group by the colour variant such as matt, glossy

and pace. Apart of all this its environmentally friendly and no annellation to any habitat.

Among the strategy, Revlon attracts the customers by using celebrity brand

ambassador for their products.

III. Distribution Channels:

The channels through which Revlon communicate with their Consumer channel and

professional channel and through these channels like advertising using well known

models which they practice since 1990s’, Revlon also does promotion in the beauty

outlets, official websites.

Revlon operates under four global brand teams reporting its results under four

segments: Revlon, Elizabeth Arden, Portfolio brands, and Fragrances. Of these 4

segments, the Elizabeth Arden segment has been the major contributor for Revlon’s

top line

IV. Customer relationship:

The types of relationships we entertain with each customer segment. Revlon has direct

selling service in this organization where they can meet the agents or distributors in

person. Aside that, they have online service where able to reach the virtual customer

service chat. The Company believes that its renewed focus on e-commerce and its

evolving marketing and sales initiatives will support the foundation for driving a

successful long-term omni-channel strategy and significantly increase its e-commerce

penetration. The Company appointed Grey as its new global creative agency of record

to provide integrated communications services, including traditional and digital

advertising and promotion and activation marketing for the Company’s brands,

including Revlon, Elizabeth Arden, Almay, CND, Cutex and SinfulColors, along with

many of its key fragrance brands, including Charlie, Britney Spears, Curve, Tapout

and Elizabeth Taylor. To drive its digital transformation, the Company engaged

Sapient Razorfish during

 V. Revenue streams:

The streams through which Revlon earn its revenue from its customers for value

creating and customer facing activities. Owing to its large liabilities, Revlon had been

struggling in the past few years to allocate cash flows towards marketing and research

and development expenses. However, its strategic acquisitions aimed at diversifying

its product mix are paying off. The company launched a Brand Renewal program in

2014 which will enable it to introduce, eliminate, or retain brands based on their appeal

and profitability, thus increasing focus on profitable brands. Colour cosmetics and hair

colour together constitute around 80% of Revlon's valuation according to our

estimates. However, as the company starts strengthening segments such as fragrance

and others, we expect future growth to be driven by these diversification efforts.

VI. Key resources:

With that target in mind, Revlon is reorganizing into four divisions. Revlon and

Elizabeth Arden will operate in their own segments, Fragrances will operate as a unit,

and the remaining brands such as Almay, American Crew, Sinful Colors, Mitchum and

others will operate as the Portfolio division, Garcia explained. The regions report to

the chief operating officer of markets, Pieraccioni, and each brand division is led by its

own president — Anne Talley at Revlon, JuE Wong at Arden, George Cleary for

Fragrances and Sennen Pamich for the Portfolio segment. Talley is returning to

Revlon after more than a decade at L’Oréal, where she was most recently general

manager, retail strategies and business development for L’Oréal Luxe. Wong was

appointed president of Arden in mid-2015. Before the Revlon-Arden merger, Cleary

was named president, global fragrance, for Arden. Pamich has been overseeing

Revlon’s professional division for several years and joined the company during the

Colomer Group merger in 2013 (that $660 million deal added CND Shellac and

American Crew to Revlon).

Source: https://wwd.com/business-news/business-features/revlon-reorganizes-to-focus-on-its-

brands-as-stars-10749522/
VII. Key activities:

The most important activities performed by Revlon implement their business model.

Revlon is trying to do its bit to differentiate itself and stay in the competition, but very

little seems to have worked out yet. Some of the steps taken by Revlon so far include:

Till 2013, Revlon was focused on colour cosmetics, and then it realized the potential

for growth in the professional segment. Hence, it acquired The Colomer Group in mid-

2013. Also, in 2013, the company exited China’s beauty market on account of losses

faced in the region. Understanding the need to continuously shuffle its brands to suit

the ever-changing beauty market, Revlon launched a Brand Renewal program in

2014, that is expected to help it in introducing, retaining, or eliminating brands from its

basket as per their user appeal and profitability contribution. Revlon exited its

unprofitable Venezuela business in Q2 2015 in order to concentrate on more profitable

geographies. Revlon launched its first new fragrance label in over a decade (called

Love Is On) in The Duty Free & Travel Retail Global Summit held in Cannes.

Leveraging upon its fragrance acquisition, the company is trying to expand its portfolio

in this segment, and it is also trying to target a new customer base in the travel retail

segment, who are looking for affordable makeup products through this channel.

VIII. Key partners:

The partner and suppliers that Revlon work with. Revlon works with thousands of

suppliers around the world whose partnerships are critical to our business success

and long-term, responsible growth.

With a focus on building mutually beneficial strategic supply partners, Revlon can

deliver better innovation and competitive advantages than could be achieved through

traditional, transactional purchasing relationships. Revlon's comparison of Quarterly

Growth Rates to its Suppliers. Revlon Inc's Suppliers recorded increase in sales

by 26.36 % year on year in Q4 2018, from the previous quarter, sales fell by -6.1 %,

Revlon Inc's cost of sales deteriorated by % year on year, sequentially cost of sales

grew by 1.57 % in Q4.

Source; https://csimarket.com/stocks/suppliers_glance.php?code=REV

IX. Cost structure:

The cost Revlon incur to run their business model. Revlon’s recent income statement

and balance sheet are provided in case study Exhibits 5 and 6, respectively. On the

balance sheet, notice the negative retained earnings because the company has been

incurring losses, although for 2014 there was a positive net income of $41 million.
Business Model Canvas