Revlon Inc. is a world leader in cosmetics. It was formed in 1932 by brothers Charles and Joseph Revson and Charles Lachmann with a $300 investment. During Revson’s time, a near monopoly on beauty parlor sales was developed brought about by door-to-door sales of nail polish. He expanded into the lipstick market with the slogan “Matching Lips and Fingertips”. Thus, after six years the small nail Enamel Company transformed into one of the most recognizable brands and companies in the world. After the death of Charles Revson, Michel Bergerac took over and built up the pharmaceutical side of the business. As a result of this, Revlon lose its ground in cosmetics. Thereafter, Ronald Perelman, chairman and CEO of …show more content…
Moreover, people now are more health conscious as ever, they are skeptics on the rise of new cosmetic products. As such, new players trying to penetrate the market are having a hard time surviving in the market unless the consumers perceived the value and safeties of the products as attested by experts.
THREAT OF SUBSTITUTE PRODUCTS | High | Low | Threat of substitute products | The differentiation of substitute products | | | High | Rate of improvement in price-performances Relationship of substitute product | | | High |
There is a high threat of product substitute in the beauty and personal care industry as evidence by the great number of major players in the market. These players offer relatively the same products that it is very easy for the consumers to switch from one product to another.
BARGAINING POWER OF BUYERS | High | Low | Bargaining power of buyers | Concentration of buyers relative to suppliers | | | Low | Switching costs | | | High |