ASSIGNMENT OF STRATEGIC MANAGMENT

SUBMITTED BY MAAM FARAH

MADE BY

RAHUL RAKHAJA

REVLON PUBLIC POLICY AND STRATEGY Revlon was founded in the midst of the Great Depression, 1932, by Charles Resin and his brother Joseph, along with a chemist, Charles Lachman, who contributed the "L" in the Revlon name. [3] Starting with a single product a new type of nail enamel the three founders pooled their resources and developed a unique manufacturing process. Using pigments instead of dyes, Revlon developed a variety of new shades of opaque nail enamel. In 1937, Revlon started selling the polishes in department stores and drug stores. In six years, the company became a multimillion dollar organization. By 1940, Revlon offered an entire manicure line, and added lipstick to the collection. During World War II, Revlon created makeup and related products for the U.S. Army, which was honored in 1944 with the Army-Navy "E" Award for Excellence. By the end of the war, Revlon was listed as one of America's top five cosmetic houses. Expanding its capabilities, the company bought Graef & Schmidt, a cutlery manufacturer seized by the government in 1943 because of German business ties. This acquisition made it possible for Revlon to produce its own manicure and pedicure instruments, instead of buying them from outside supply sources. In November 1955, Revlon went public. The IPO price was $12 per share, but it reached $30 per share within 8 weeks. In the 1960s, Revson segmented Revlon Inc into different divisions, each focusing on a different market. He borrowed this strategy from General. Each division had its own target customer:

REVLON TYPE INDUSTRY FOUNDED FOUNDERS HEADQUATERS KEY PEOPLE REVENUE PUBLIC (NYSE REV) COSMETIC SKIN FRAGRANCE PERSONELL CARE 1932 JOSEPHS & CHARLES REVSON LACMAN NEW YORK CITY ALAN T ENNIS PRESIDENT AND CEO US$ 1.3 BILLION US$170.8 (MILLION) US$7942.0 6,800

OPERATINGINCOME TOTAL ASSETS EMPLOYEE

VISSION To refresh the world MISSION Our Job Is Outstanding Customer Satisfaction... Ever y Day SWAT ANALYSIS Strengths Cost advantage Asset leverage Effective communication Talented Human resources High R&D Innovation Online growth Loyal customers Market share leadership Strong management team Strong brand equity Strong financial position Supply chain Pricing Real estate Reputation management Unique products Weaknesses Bad communication Diseconomies to scale Over leveraged financial position Low R&D Low market share No online presence Not innovative Not diversified Poor supply chain Weak management team

Weak real estate Weak, damaged brand

Opportunities Acquisitions Asset leverage Financial markets (raise money through debt, etc) Emerging markets and expansion abroad Innovation Online Product and services expansion

Threats Competition Cheaper technology Economic slowdown External changes (government, politics, taxes, etc) Exchange rate fluctuations Lower cost competitors or imports Maturing categories, products, or services Price wars

INTERNAL ASSESMENT INTERNAL FACTORS EVALUATION MATRIX KEY FACTORS STRENGTH o.15 Market share leadership Innovation Strong management team Supply chain Online growth Loyal customers Reputation management INVENTORY TURNOVER WEAKNESS

WEIGHT

RATING

SCORE

3 4 3 3 3 2 3 2

o.45 o.40 0.27 0.27 0.24 0.14 0.30 0.16

0.10 0.09 0.09 0.08 0.07 o.o7 0.08

Bad communication Diseconomies of scale Low market share Weak management team Weak, damaged brand

0.05 0.06 0.05 0.04 0.04

1 1 1 1 1

0.05 0.06 0.05 0.04 0.04

TOTAL

1.00

2.47

COMPETATIVE PROFILE MATRIX

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REVLON SUCCESS FACTOR QUALITY FINANCIAL POSITION ADVERTISING MARKET SHARE MANAGEMENT TECHONOLOGY GLOBAL EXPENSION

GARNIER OLLAY WEIGHT RATING SCORE RATING SCORE RATING SCORE 0.02 0.15 4 1 0.08 0.15 3 3 0.66 0.45 3 2 0.66 0.30

0.09 0.10 0.11 0.13 0.10

2 4 2 1 4

0.18 0.4 0.22 0.13 0.40

2 2 3 3 1

0.18 0.20 0.33 0.39 0.10

2 1 2 2 1

0.18 0.10 0.22 0.26 0.10

PRICE COMPITATIVENESS

0.08

0.24

0.16

0.16

CUSTOMER LOYALITY

0.12

0.24

0.24

0.24

TOTAL

1.00

2.84

2.71

2.22

REVLON COSMECTIC COMPANY EXTERNAL FACTOR RATING SCORE FACTOR OPPURTUNITIES Acquisitions

WEIGNT 0.13 0.15 0.12 0.10 0.09

RATING 3 4 3 2 2

SCORE 0.39 0.60 0.36 0.20 0.18

Financial markets (raise money through debt, etc) Asset leverage Product and services expansion Emerging markets and expansion abroad

THREATS Competition

0.08 0.09 0.08 0.07 0.09 1.00

2 2 3 2 1

0.16 0.18 0.24 0.14 0.09 2.54

Lower cost competitors or imports Maturing categories, products, or services Lower cost competitors or imports

Price wars TOTAL

INCOME STATEMENT

Dec 2010

Sales Cost of Sales Gross Operating Profit Selling, General, and Administrative Expenses Research & Development Operating Income before D & A (EBITDA) Depreciation & Amortization Interest Income Other Income - Net Special Income / Charges Total Income Before Interest Expenses (EBIT) Interest Expense Pre-Tax Income Income Taxes Minority Interest Net Income From Continuing Operations Net Income From Discontinued Operations Net Income From Total Operations Extraordinary Income/Losses Income From Cum. Effect of Acct. Change Income From Tax Loss Carry forward Other Gains / Losses Total Net Income Normalized Income (Net Income From Continuing Operations, Ex. Special Income / Charge) Net Income Available To Common Basic EPS from Continuing Ops. Basic EPS, Total Basic Normalized Net Income/Share EPS for Continuing Ops. EPS for Discontinued Ops EPS for Total Ops. EPS for Other Gains (L) EPS, Total Diluted Normalized Net Inc/Shr (Net Income From Continuing Operations, Ex. Special Income / Charge) Dividends Paid per Share

1,321.40 389.70 931.70 666.60 0.00 265.10 65.60 0.50 (23.60) 0.00 176.70 96.90 79.80 (247.20) 0.00 327.00 0.30 327.30 0.00 0.00 0.00 0.00 327.30

326.70 327.00 6.30 6.31 6.29 6.25 0.01 6.26 0.00 6.26

6.24 0.00

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Balance sheet:
Assets Fiscal year is January-December. All values USD millions. Cash & Short Term Investments Cash Only Short-Term Investments Total Accounts Receivable Accounts Receivables, Net Accounts Receivables, Gross Bad Debt/Doubtful Accounts Other Receivables Inventories Finished Goods Work in Progress Raw Materials Progress Payments & Other Other Current Assets Miscellaneous Current Assets Total Current Assets 2010 $76.7M 76.7M 197.5M 197.5M 200.6M (3.1M) 0 115M 65.4M 9.9M 39.7M 0 86.9M 67M 476.1M

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Fiscal year is January-December. All values USD millions.

2010

Liabilities and stake holders equity Net Property, Plant & Equipment Property, Plant & Equipment - Gross Buildings Land & Improvements Computer Software and Equipment Other Property, Plant & Equipment Accumulated Depreciation Total Investments and Advances Other Long-Term Investments Long-Term Note Receivable Intangible Assets Net Goodwill Net Other Intangibles Other Assets Tangible Other Assets

2010 106.2M 301M 63.5M 1.9M 91.6M 194.8M 0 0 0 239.1M 182.7M 56.4M 35.9M 6.3M

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Liabilities and stake holders equity Total Assets

2010 1.09B

Liabilities & Shareholders' Equity 2010 ST Debt & Current Portion LT Debt Short Term Debt Current Portion of Long Term Debt Accounts Payable Income Tax Payable Other Current Liabilities Dividends Payable Accrued Payroll Miscellaneous Current Liabilities Total Current Liabilities Long-Term Debt Long-Term Debt excl. Capitalized Leases Non-Convertible Debt Convertible Debt 11.7M 3.7M 8M 88.3M 18.7M 199.8M 0 51.8M 148M 318.5M 1.16B 1.16B 1.16B 0

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2010 Capitalized Lease Obligations Provision for Risks & Charges Deferred Taxes Deferred Taxes - Credit Deferred Taxes - Debit Other Liabilities Other Liabilities (excl. Deferred Income) Deferred Income Total Liabilities Non-Equity Reserves Preferred Stock (Carrying Value) Redeemable Preferred Stock Non-Redeemable Preferred Stock Common Equity (Total) Common Stock Par/Carry Value Retained Earnings ESOP Debt Guarantee Cumulative Translation Adjustment/Unrealized For. Exch. Gain 48.1M 48.1M 0 (696.4M) 500,000 (1.55B) 0 33.1M o o o 257.2M 257.2M 0 1.74B 1.1M -

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2010 Unrealized Gain/Loss Marketable Securities Revaluation Reserves Treasury Stock Total Shareholders' Equity Accumulated Minority Interest Total Equity Liabilities & Shareholders' Equity 0 (7.2M) (648.3M) 0 (648.3M) 1.09B

Management: Q no1; Revlon firm use strategic management concepts? Ans; yes, because of this they deal with daily necessities QNO 2; Are company objective and goals measurable and well communicated? Answer: Yes because annual profit is increasing QNO3; Do managers all level plan effectively? Answer: Yes, we are achieving our goals Qno4; Is the organization structure appropriate?

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Answer: of course Qno5; Are job description and job specification are clear? Answer: we are appointing right person for the right Job thats why we can say that companys job specification and job description are highly cleared Qno6; Do managers dedicate authority to others? Answer: No, the investors usually get what and when they want with good and approvable interest. Qno7; Is employee moral is high? Answer: Yes, employee is dedicated because of management give the authority to work in a good physical condition and moral communication and attention between employee and management. Qno8; Are employee turnover and absenteeism are low? Answers: yes, because employee are much satisfied with the management and cooperation for them. Qno9; Are organization reward and control mechanism effective? Answer: yes, that is the reason employee their best to get the reward and give benefit to the organization too. MARKETING Qno1; Are market segments work effectively? Answer: Yes, they are working for the betterment of market position of company. Qno2; Is the organization position is well among competitors? Answer: according to the matrix pilgrims place a critical success among market competitors. Qno3; has the firm market share being increasing? Answer: Yes, the strength of a company is value of share holder that are increasing day by day because of continuous success. Qno4: Are present channel of distribution is reliable and cost effective? Answer: Yes, distribution of their goods all over the country is reliable and effective why thats why they lead over in market. Qno5: Does the firm have an effective sales organization? Answer: Yes, the sales of their product externally and internally are increased because of when they keep on launching their branches all over the Brazil and internationally they get reward of appreciation.

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Qno6: Does the firm conduct market research? Answer: Yes, they make the department of their own development and research. Qno7; Are product quality and customer service is good? Answer: yes, the material they choose is in good form and company emphasis on most of quality much on quantity. Qno8; Are the firm product and service price appropriately? Answer: NO, here the company is now as getting international recognition they increases their price which some how lower the interest of common people n daily basis eating in country.

Qno9: does the firm have canned effective promotion advertising and publicity strategy? Answer: Yes, advertising is the most effective way to get recognition over all and get a good place in market, to attract the customers. Qno10: are marketing planning and budgeting effective? Answer: the plan of what of launching of new product with taste and customers demand is on budget and finance and high quality effective planning and decision of management and qualified people in pilgrims. Qno11: do firm marketing manager have adequate exercise training? Answer: the restaurant is having top class chefs and waiters and whole crue who work effectively under the command of specified management, who take the dealing of every in and out of going product.

FINANCE AND ACCOUNTING: Qno1: where is the firm, strong and weak as indicated by financial ratio analysis? Answer: it is indicated in internally and externally matrix of company. Qno2: can the firm raise needed short term capital? Answer: here the firms are getting long term capital because they use to introduce the product on the basis of customers and usually recognized by fried and grilled chicken, duck, and birds which people admired and demand to have on when ever they want. Qno3; can the firm raise needed long-term capital through debt capital Formula: owner equity= Assets liabilities OE = 476.1M - 318.5 OE= 313.7 Answer
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Qno4: Does the firm have sufficient working capital? Answer; Yes, our sales are good due to effective marketing strategy Qno5: Are capital budgeting procedure effective? Answer: yes, we are currently achieving 179.70 billion yearly bases. Qno6: Are the dividend pay out policies reasonable? Answer: investors are highly motivated to invest because of having low loss and their full attention towards the stake holder who keep on investing on the firm. Qno7: does the firm have good relations with investors? Answer: Yes. The investors are always welcome in firm with marketable interest Qno8: Are the Firms financials experienced and well trained? Answer: Yes, it is internationally recognized that is why it is highly appreciable with all and get well trained employee in the firm. Qno9: Liquidity ratios: a. Current ratio = current assets/current liabilities CR = 476.1M/318.5
CR = 1.495 ANSWER

b. Quick ratio = current assets inventory/ current liabilities QR = 476.1 115 /318.5 QR = 1.133 c. Debt to total asset ratio = Total debts/ Total assets DTA = 23.4/109 DTA = 0.12.3 B answer Debt to total equity ratio = total debts/ total equity DTR= 23.4/648.3 DTR= 0. 0360 ANSWER. d. Debts to equity Ratio = long term debts/ total stock equity DER = 8B/648.3 DER = 0.0123 ANSWER. e. Time interest Ratio= profit before interest and taxes/ total interest charge TIR = 176.70/423.9 TIR = 0.4168 ANSWER. f. Inventory turnover = Sales/ Inventory of finished Goods IT= 1321.40/ 115 IT= 2.794 ANSWER. g. Fixed assets Turnover = sales / Fixed assets turnover
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FAT = 1321.40/472.6 FAT = 2.7960 ANSWER. h. Account receivable Turnover = Annual credit sale / Account receivable A/c T = 327.30 / 197.5 A/c T =1.6572 ANSWER. i. Average collection period = Account receivable / Total sale / 365 days ACP = 197.5/ 1321.40/365 ACP = 4.0948 ANSWER.

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