Executive summary
The business world is rapidly changing, and the search for new business opportunities is very vital. Therefore many businesses and commercial enterprises that were localized and restricted to the borders of their mother country are expanding and becoming multinational corporations (Kotler p.54). One such company that has that potential is Revlon, and therefore the Russian market presents a new frontier for business the only question is whether Revlon can rise to the occasion and successfully penetrate that market to realize profits and effectively compete with existing companies.
Introduction and background
The need to meet business objectives and goals is very important and therefore companies have always strived to meet their targets by all means necessary. Charles Darwin’s postulation survival for the fittest is becoming a day to day terminology and phrase in the commercial world. Business survival is becoming more and tougher and therefore it becomes necessary that businesses come up with mechanisms that will help companies remain in business (Hunger and Wheelen p.3-6). The topmost and highest level of strategy, therefore, ultimately demands that a company has only three options to carry out its business deals, and these are either to grow, attain stability, or in worst-case scenarios retrench its activities.
Commercial enterprises do not always have a smooth business cycle and often are affected by business cycles depending on various factors such as competition, geographic region, and so on. Furthermore, every industry has its life cycle, and every product line is also limited to a certain lifespan and is therefore up to the company to successfully pursue options that will ensure its survival (Wheelen and Hunger p.77). Therefore by the virtue that there is a timeline attached to the lifespan of a product many commercial enterprises end up forming highly competitive strategies that increase the intensity of rivalry within an industry and when they exhaust this industry they expand to other regions by crossing borders to look for much better business opportunities before their products reach the decline stage.
Revlon is an American cosmetic company that has ambitions of spreading its wings and entering numerous world markets to maximize revenue streams from its revenue lines (Revlon 2010). Furthermore, The Russian industry has been identified by research done by numerous agencies such as Euromonitor as a hot spot for cosmetic products, and, therefore, Revlon can attempt to enter this market and successfully sell its products in the Russian market.
It is therefore necessary for companies to identify the most viable products by accurately identifying the stage that they are in as far as the product life cycle is concerned. While suggests indicate that over the last ten years that the Russian industry has been growing steadily, and even when the recession hit Russia the industry was still able to witness some growth.
Problem statement
There exists a high level of ambiguity and information asymmetry on the part of business executives and overall organization as to the path which is to be followed by commercial organizations especially when adopting a cross-border multinational approach. It, therefore, becomes necessary for business executives to look into the viability of expanding and growing their businesses and whether it is worth it by looking at various factors that are for and against their business prospects.
Objectives of the Proposal
Identify whether the Russian market is a viable multinational expansion point for Revlon by taking an in-depth look into the Russian market.
Literature Review
Multinational expansion by commercial organizations
Many commercial organizations usually start with the dream of one day serving many people. Entrepreneurs in their initial years of businesses usually desire to start-up businesses be able to survive on savings stabilize their businesses until they start earning a return on profits. But there reaches a point when a company has now stabilized and established itself as a market leader or a very big participant in the industry and therefore to achieve its mission and goals the company is forced to expand( Hunger & Wheelen p138-144). Entrepreneurs and business executives normally have an adventurous spirit and, therefore, they usually go ahead and craft a comprehensive plan that will move their companies from being a regionalized, domestic company to a multinational company. Consequently when an organization moves into other countries through direct manufacturing, exporting, alliances & mergers, or contractual agreements it then goes forward to become a multinational company.
Multinational corporations normally use a portfolio matrix for plotting products by the county to make business and strategy decisions that are to be taken while prospecting to go multinational. Therefore a products competitive strengths attractiveness can be determined by looking at the market share that are users of the product, product profit margins, contribution margin, competition within the country on the other hand a countries attractiveness can be analyzed by its market size, disposable income indicators, the market rate of growth, government regulation together with political and economic factors. Therefore depending on how high or low the degree of country attractiveness and product competitive strengths a company like Revlon can either invest, divest, or either practice selective investment strategies ( Wheelen & Hunger p.142).
Revlon
Revlon is an American company that was founded back in the year 1932 by Charles Revson his brother, and a chemist called Charles Lachman. The company mainly deals with cosmetics, perfumes, and skincare products other beauty products, which often have included nail makeup, hair makeup, lip makeup, and even facial makeup. The company has its headquarters in New York and has about 7000 employees. Revlon has been slowly acquiring companies within the United States since the 1960s and has now begun its world domination plan and, therefore, it is planning on how to fully enter the European and Asian Markets (Revlon 2010). The Russian market in specific is a market that has promised a lot of growth recently, and future economic forecasts suggest that the industry will be expected to continue growing until the year 2013(Aginsky group 2010).
Russian consumers are a unique set of consumers especially women are the type of consumers who are known to use makeup on regular basis therefore making the market quite attractive for potential entrants.
It, therefore, becomes necessary for Revlon to evaluate the availability and viability of any business opportunities that Arise out of the Russian cosmetic industry market and therefore use the findings to develop short-term, mid-term, and long-run strategies that will enable the company to successfully pursue and even establish itself as a force to be reckoned with within that industry (Hunger and Wheelen p.1-10)).
Research methodology
Data to be included in the report will be obtained from trusted secondary sources that give an in-depth analysis of the Russian cosmetics industry, the Data will be qualitatively analyzed to create a conclusive report on the viability of Revlon starting serious business operations within Russia.
References
Aginsky Consulting Group. 2007. Cosmetics market research summary. Web.
Euromonitor International. Web.
Revlon. 2010. Web.
Wheelen, Thomas & Hunger, David. (2002). Strategic management and business policy. New Jersey: Prentice hall.
Kotler Philip, 1999. Principles of marketing. New Jersey: Prentice hall.