Kimberly-Clark Corp SWOT Analysis and Strategic Evaluation Report
Strategic Evaluation
Swot analysis
Strengths
·
Broad sectoral presence –
Kimberly-Clark has established a significant presence across a broad range of
disposable paper products categories, insulating it against downturns in
particular areas and enhancing its responsiveness to changing consumer demand.
·
Strong brand portfolio – the
company’s portfolio includes a number of strong brands with high levels of
consumer recognition and trust.
·
Strong research and development
– Kimberly-Clark’s research and development teams and facilities are amongst
the strongest in the industry, enabling it to drive brand development and adapt
to changing market conditions.
·
Vertical integration –
Kimberly-Clark’s vertical integration of its non-wovens business (it produces
its own polymer-based non-wovens) and its proprietary technologies in tissues
give it a competitive advantage over other industry players.
·
Creative marketing – the
company has been successful at developing innovative marketing practices in
support of its core brands that seek to generate an “emotional affinity” with
consumers.
Weaknesses
·
Reliance on the Americas –
while it has developed a global coverage, Kimberly-Clark continues to rely on
the Americas, and particularly the US, for a large proportion of its sales.
·
Limited presence in China – while
it is the leading manufacturer in Asia Pacific, Kimberly-Clark lags some way
behind major rival, Procter & Gamble, in the increasingly important Chinese
market.
·
Low profit margins in key
sector – nappies/diapers/pants, which accounted for 34% of Kimberly-Clark’s
disposable paper products sales in 2007, is subject to significant raw
materials costs and intense price competition.
Opportunities
·
Dynamism in incontinence
products – Kimberly-Clark is the world’s leading player in incontinence
products, which is forecast to be the most dynamic disposable paper products
sector over the 2007-2012 period, driven by the ageing of populations in many
markets.
·
Growth in emerging markets –
increasing spending power, changing consumer lifestyles and the development of
modern retail channels are driving strong growth in emerging regions such as
Eastern Europe and Asia Pacific, where per capita consumption of disposable
paper products remains low compared with developed markets. Kimberly-Clark has
the opportunity to build on the foothold it has established in markets such as
India and Russia.
·
Eco-consciousness – rising
awareness of environmental issues is set to have a growing influence on
consumption of disposable paper products and create opportunities for the
development of eco-friendly products.
·
Increasing emphasis on
innovation – the growing importance of product innovation in generating sales
in mature developed markets confers a notable competitive advantage on major
players such as Kimberly-Clark which have access to significant research and
development resources.
·
Private label manufacture – the
increasingly brand-orientated character of private label new product
development is creating opportunities for major manufacturers to expand their
interests in the segment. Kimberly-Clark thus has the opportunity to build on
the small amount of private label products which it already manufactures.
Threats
·
Difficult economic conditions
in major developed markets – poor economic conditions are undermining consumer
confidence and purchasing power in Kimberly-Clark’s core North American market.
This could stall the consumer trend towards higher margin products that has
offered the potential to generate growth in mature market conditions in recent
years.
·
Intense pricing competition –
aggressive pricing competition amongst major retailers and strong private label
segments exert a considerable downward pressure on prices in developed
disposable paper products markets.
·
Rising costs – rising raw
material and energy costs are placing significant pressure on Kimberly-Clark’s
profit margins. Profit margins are also likely to be squeezed by the rising
marketing expenditure necessary to maintain competitiveness.
·
Private label development – the
increasing sophistication of the private label segment is increasing the
competition faced by Kimberly-Clark’s brands across an expanding price
spectrum. Indeed, private label products are increasingly encroaching on the
premium segment in core company categories, such as toilet paper.
·
Unfavourable demographic
developments – low birth rates and lower numbers of women aged 10-55 years are
leading to a shrinking consumer base in categories such as
nappies/diapers/pants and sanitary protection, particularly in developed
markets. The resultant intensification of competition increases the onus on
Kimberly-Clark’s product development and marketing expenditure.
If you want SWOT analysis reports, than contact Mahasagar Publications.
