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Grand Strategy Matrix

Positioning Revlon

  • Market Growth (Y-Axis): Slow Growth. The overall U.S. cosmetics industry is growing at "nearly 4 percent" and the lipstick segment at "nearly 6 percent" (p. 7; p. 6). This is stable but not rapid growth, placing Revlon in the bottom half of the matrix.
  • Competitive Position (X-Axis): Weak Position. Revlon's CPM score of 2.55 is average, but its scale is a fraction of its main competitors' (p. 5, Ex. 7) and its negative equity signifies a fundamental financial weakness (p. 5, Ex. 6). This places it in the left half of the matrix.

Conclusion: With a weak competitive position in a slow-growth market, Revlon falls into **Quadrant III**.

The Grand Strategy Matrix Diagram

RAPID Market Growth SLOW Market Growth WEAK Competitive Position STRONG Competitive Position I II III IV

Recommended Strategies for a Quadrant III Firm

Firms in Quadrant III are in a precarious position. They must make some drastic changes quickly to avoid further decline and potential liquidation. The primary focus should be on internal stabilization and cost reduction.

  • 1. Retrenchment: This is the primary strategy. Revlon must implement a rigorous cost-cutting program. This should include optimizing the supply chain, reducing overhead in underperforming areas, and potentially a further reduction in headcount beyond the 5,000 employees already cut (p. 2, Strategy). The goal is to dramatically improve profitability to begin repairing the balance sheet.
  • 2. Divestiture: The company should analyze its broad portfolio of brands and divest those that are underperforming or non-core. Selling off smaller, stagnant fragrance or deodorant brands could raise cash to pay down debt and allow management to focus on its iconic, profitable brands like ColorStay and Almay.
  • 3. Related Diversification (Cautiously): Once financially stable, Revlon could pursue related diversification into the growing men's skincare market, which offers higher growth potential than its current core markets (p. 8, para. 1). This should only be considered after successful retrenchment.