Cosmetics and Revlon Essay example

Submitted By dgek1126
Words: 843
Pages: 4

Revlon growth and success may be attributed to its ability to penetrate multiple industries in the beauty sector. It is a leader in the cosmetics, skin care, fragrance and personal case industry and has established itself globally. It was ironically founded in the midst of the Great Depression in 1932, by Chares Revson. Its initial focus was on manufacturing and developing shares of nail enamel, and then began to sell polishes to department and drug stores. In less than 10 years, the company increased profitability to become a multimillion-dollar organization.

Revlon’s strengths come from a variety of different strategies, all of which combined have sustained its competitive advantage. One of its biggest strengths is its established brand loyalty, which it has embedded into the culture of the female population throughout the world. Its long history of innovating new break-through beauty products has given it a solid foundation and trust amongst customers.

Revlon’s other big strength is R&D, which is invests much of its capital into. It has always striven to innovative new products in order to stay competitive. And the beauty sector is one that is always innovating new products and ideas, so keeping up is necessary to remain profitable, and innovating past competitors is necessary to maintain competitive advantage.

Revlon has had a long history of very affecting advertising. Most of its advertisements are placed in top selling magazine, such as Cosmo and Elle Girl, and are played on television constantly. It has incorporated celebrities in its advertisements in order to increase its influence on the market. Its brand loyalty is what led to its ability to hire celebrities to advertise its products. This strategy is aimed towards women, striving to influence them through the media, and has a psychological motive to it that has proven to be very powerful.

Revlon has a well-managed supply chain, and very efficient distribution channels all around the world that allow its products to be used in over 100 countries. It has large mass merchandisers and chain drug stores, with which it has kept good relations with, and this further improves its sales.

Although Revlon has had commercial success, it is also facing financial trouble, which are its biggest weakness. The biggest weakness is that it has accumulated a lot of debt through its financing of several expansions. Current market conditions are not sufficient for Revlon to attain the high amount of cash flow it needs to repay its obligations.

Revlon’s products are not generating enough demand to cover its debt at an efficient rate, and this can be due to its high prices relative to other competitors. Revlon’s past history of dominance and market leadership influences its current day prices, and although these prices keep it solvent, they are not competitive enough to grow.

Revlon does have several opportunities that it could take advantage of. The biggest one is that men are starting to use personal care products and even cosmetic products. Since Revlon has been focused on targeting females, if it is able to reach the male segment then its growth will accelerate. Revlon could also become more abundance on beauty websites, and leverage the growth in online shopping to market