COMPANY PROFILE -The Clorox Company
Business Sector :Consumer and Professional Products – Cleaning, Food
Operating Geography :United States, Global
About The Clorox Company :The Clorox Company is a leading manufacturer and marketer of consumer and professional products. The company is headquartered in Oakland, California. It has around 8000 employees worldwide. It has 2 R & D centres, one in USA and another in Argentina. The company ranked 455 on Fortune’s 500 ranking (2016).
The Clorox Company Revenue :US$5.8 Billion (FY ending June, 2016)
Competitive Analysis of The Clorox Company
|1. Strong financial performance |
2. Strong product portfolio
3. Diversity at work place and engaged employees
4. Corporate Social Responsibility
5. Strong R&D
|1. Limited geographic presence
2. Decline in free cash flow in 2016 compared to 2015
3. Dependence on retailers.
|1. Exploring new markets|
2. Fuel growth by reducing waste
3. Expansion of brands
|1. Intense competition from its competitors
2. Criticism of advertising message
3. Government regulations
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Detailed SWOT Analysis of The Clorox Company
1. Strong financial performance: Clorox's sales grew 2 percent from US$ 5655 million in 2015 to US$ 5761 million. Its gross margin expanded by 150 basis points to 45.1 percent. Its diluted net earnings per share from continuing operations grew 8 percent from US$4.57 million in 2015 to US$4.92 million in 2016.
2. Strong product portfolio: The product portfolio includes cleaners, homecare, healthcare, plastic bags, water filtration products etc. Nearly 80 percent of its global brands rank as the No. 1 or No. 2 market-share leaders in their respective categories.
3. Diversity at workplace and engaged employees: Clorox has 30% female independent board members vs. 20% Fortune 500 average. In the workforce, the company has 25% and 31% ethnic minorities among U.S. non-production managers and employees respectively. The Diversity MBA has ranked The Clorox Company among the top three “Best Places for Women & Diverse Managers to Work.”The company’s current employee engagement score stands at 87%, 8% higher than the FMCG industry norm. Clorox posted a recordable incident rate of 0.61 squares in the workplace.
4. Corporate Social Responsibility: Clorox expanded its CSR activity a step further by becoming a signatory of THE UNITED NATIONS GLOBAL COMPACT in 2015. Clorox continued to drive its eco strategy, making sustainability improvements to 31 percent of its product portfolio since the baseline calendar year of 2011. Clorox supports its global communities through Be Healthy, Be Smart and Be Safe initiatives. The company’s total community impact in the fiscal year 2016 was US$ 16.9 million.
5. Strong R&D: Clorox invested US$141 million in 2016 for its R&D projects. In 2015, it invested US$136 millions. The company’s recent launch of Hidden Valley Ranch With helped strengthen its leadership position in dressings and sauces.
1. Limited Geographic Presence: Clorox generated 83% of its revenue from U.S. markets. Clorox could derive only 17% revenue from International market. This high dependence on U.S. market may adversely impact the company’s sales growth objective. The company may think of starting its manufacturing facility in India as soon as possible.
2. Decline in free cash flow in 2016: The Clorox Company’s free cash flow declined from US$733 million in 2015 to US$596 million in 2016. The company must try to increase its free cash flow as this will be useful for business expansion and acquisition of other brands.
3. Dependence on retailers: Dependence on large-format retailers such as Walmart (WMT), Target (TGT), and Costco (COST), which have greater bargaining strength, can be a weakness for Clorox. These retailers demand higher discounts, slot fees or reduction in shelf space for private label. This might reduce sales of Clorox brands.
1. Exploring new markets: Clorox should expand its business in emerging markets like India and China. Although they have plant in China, but they must expand its operation to gain the advantage of large consumers. In India Clorox has a great opportunity because of the population size and consumer’s increasing purchasing power capability.
2. Fuel growth by reducing waste: Enterprise wide initiatives, including light weighting of charcoal briquettes, renegotiated international ocean freight rates and a number of other administrative improvements, contributed to $109 million in cost savings.
3. Expansion of brands: Clorox acquired Renew Life and evolve its portfolio into the digestive health space, a $10 billion category expected to grow 7 percent annually. Clorox must explore other leading which they should consider for acquisition.
1. Intense competition from its competitors: Clorox faces stiff competition in terms of pricing decisions, product development, and innovation. Clorox company’s main competitors are Unilever, P&G, and Colgate-Palmolive etc. Their advertising and promotional events and strong financial condition poses a threat to Clorox. .
2. Criticism of advertising message: The National Advertising Division asked Clorox to either discontinue or modify its advertisements for Green Works on the grounds that the cleaners do not work as per the claim by Clorox.
3. Government regulations: Clorox had to exit from Venezuela in 2015 due to stringent government regulation on price increase of its products. Clorox reported a loss of US$23 million before interest and taxes.The Clorox CompanySWOT analysis has been conducted by Saswata Banik and reviewed by senior analysts from Barakaat Consulting.
1. The Clorox Company- Who We Are -https://www.thecloroxcompany.com/who-we-are/
2. Integrated Report- https://s21.q4cdn.com/507168367/files/doc_financials/annuals/2016/CLX-2016-Integrated-Report_Finalv2.pdf
3. Benchmarks by Company-https://www.theacsi.org/index.php?option=com_content&view=article&id=149&catid=&Itemid=214&c=Clorox
4. Diversity MBA: Clorox No. 3 Place to Work- https://www.thecloroxcompany.com/blog/diversity-mba-clorox-no-3-place-to-work/
5. Hurdles in Clorox’s Growth: Weaknesses and Threats-https://marketrealist.com/2015/11/hurdles-cloroxs-growth-weaknesses-threats/
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