Comprehensive Overview - Kimberly Clark Business

Part
01
of six
Part
01

Kimberly Clark - Product Offerings and Innovations: Adult & Feminine Care

Kimberly Clark offers many brands of adult and feminine care products. Some of these brands include Depend, Poise, Kotex, and Intimus. More information regarding these products is provided below.

Product Offerings

Adult Care Products
  • Kimberly Clark offers three different brands of adult care, which are Depend, Poise, and Plenitud.
  • Depend has a line of products for adults to take control of bladder leakage, Poise is only targeted to adult women with bladder leaks (liners and pads), and Plenitud offers pads, liners, and absorbent underwear.
  • Depend is offered in the US, Australia and New Zealand, Canada, Czech Republic, Korea, Mexico, Netherlands, Portugal, Slovakia, and Spain.
  • Poise is offered in the US, Canada, Argentina, Bolivia, Caribe, Central America, Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay.
  • Plenitud is offered in Argentina, Bolivia, Caribe, Chile, Colombia, Ecuador, Paraguay, and Uruguay.
Feminine Care Products
  • The company's brands for feminine care include U by Kotex, Kotex, Kotex White, Kotex Anydays, Kotex Goodfeel, Intimus, and Camelia. All the brands offer period products for women, such as pads, tampons, and liners.
  • U by Kotex is offered in the US, Canada, Australia, and New Zealand.
  • Kotex is offered in the US, Canada, Mexico, Australia and New Zealand, China, Colombia, Czech Republic, Hong Kong, Ireland, Israel, Netherlands, Russia, Slovakia, South Africa, Turkey, Ukraine, and the UK.
  • Kotex White, Kotex Anydays, and Kotex Goodfeel are offered in Korea. Intimus is offered in Brazil and Camelia is offered in Germany.

Innovations

  • In 2019, Kimberly Clark announced its latest innovation in the brand Depend. It developed the Fit-Flex technology, which "features a new blush color and a variety of designs for women, and an ultra-soft, flexible fabric." This new enhancement provides customers with additional support.
  • In early 2019, Kimberly Clark reinvented its shelf spaces regarding their feminine care category. With the use of consumer research and shopper insights, they developed, alongside Wild Blue, visionary retail designs for their shelves to create a warm, welcoming destination for millenials.
Part
02
of six
Part
02

Kimberly Clark - Product Offerings and Innovations: Paper (Bath, Towels, Facial)

Kimberly Clark's offerings for paper-based products include hand towels, bathroom tissues, facial tissues, toilet seat cover sheets, napkins, and wipers. The company is innovative and uses Airflex Technology that ensures that each paper-based hand towel is ultra absorbent, especially when compared to conventional paper towels.


Description of their Product Offerings

Hand Towels

a. Rolled Towels

  • Rolled hand towels are paper-based towels crafted for busy washrooms with high traffic. The hand towels are available in various dispensing systems and formats. The paper-based hand towels are sold under the brand names SCOTT and Kleenex.

b. Folded Towels


Bathroom Tissues

a. Folded Bath Tissue

  • Folded bath tissues dispense single sheets, and when compared to rolled bath tissues, it uses around 40% less paper. The tissue is sold under the brand name Scott.

b. Jumbo Roll Tissue

c. Small Roll Tissue


Facial Tissue


Toilet Seat Cover Sheets


Napkins

  • Pop-up napkins are soft and supply "one-at-a-time dispensing, easy loading, high capacity", and it helps to decrease consumption.


Wiper


Innovations Specifically Surrounding Kimberly Clark's Paper Products


Research Strategy:

Our research began by searching for information on Kimberly Clark's paper-based products by exploring the company's website. We then conducted further research to check the product offerings of the company by looking at the product section of the site, along with details on the features and usage of the products.

Regarding innovation, we checked the press releases and any news the company has disclosed on innovation in its paper-based product range. We also observed reviews on 3rd party websites such as Amazon and testimonials of the company to identify any innovation in its product range.
Part
03
of six
Part
03

Kimberly Clark - Competitors

After an extensive search through company databases, press releases, company reports, and media articles, details about Kimberly Clark's true competitors do not appear to be available in the public domain. However, the research team was able to identify close competitors to Kimberly Clark, which are P&G, Unilever, and Edgewell Personal Care. More information regarding these companies is provided below.

Kimberly Clark Product & Size

  • The Company operates in three major operating segments, which are personal care, consumer tissues, and K-C professional.
  • Under the 'Personal Care' segment the company offers a wide variety of products such as disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other related products which are sold under the brands Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Kotex, U by Kotex, Intimus, Depend, Plenitud, Poise, and others.
  • Products in the 'Consumer Tissues' segment include tissue, paper towels, and napkins, and are sold under the brands Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, and Neve, among others.
  • 'K-C Professional' category provides supporting products such as wipers, tissue, towels, apparel, soaps and sanitizers under brands such as Kleenex, Scott, WypAll, Kimtech, and KleenGuard, among others.
  • Based on the various company databases such as Hoovers, Zoom Info, Craft.co, etc., some close competitors of the Company include Unilever, P&G, Edgewell Personal Care Company, Georgia-Pacific, Clorox and Krugar Products.
  • The Company had net consolidated sales of $18.5 billion in 2018 and approximately 41,000 employees as of December 31, 2018.

Close Competitors

P&G

Website
  • The company's website can be accessed here.
Why It is a Close Competitor and Not a True Competitor?
  • P&G, similar to Kimberly Clark, offers adult and feminine care products as well as family care products, such as paper towels, tissues, toilet Paper, etc. under various brands like 'Always', 'Always Discreet', 'Tampax', 'Bounty', 'Charmin', and 'Puffs'.
  • The company, like Kimberly Clark, is one of the most sought after brands in these categories and enjoys 25% share of the global feminine care market. The US market shares for family care products are 40% for 'Bounty' and 25% for 'Charmin' brands.
  • In terms of size, however, the company is much bigger than Kimberly Clark and had $67.7 billion in net sales and approximately 97,000 employees in FY19. 'Baby, Feminine & Family Care' segment alone represented 27% of the company sales of $18.3 billion.
Value Proposition
  • The company provides value to consumers through its range of quality products, its customer service, and its reputation as a reliable manufacturer.
  • P&G provides products that cater to all customer segments, including some of the world’s most popular and respected consumer brands.
  • Its broad range of high quality products and its reliable supply chain and distribution operations also create value for its retail and distribution customers in the form of revenue and sales.

Unilever

Website
  • The company's website can be accessed here.
Why It is a Close Competitor and Not a True Competitor
  • The company operates in a range of beauty and personal care as well as home care products closely in line with Kimberly Clark. It offers feminine and adult facial and personal care products under brands such as 'Fair & Lovely', 'Axe', 'Rexona', 'Alberto Balsam', etc., and home care products under brands like 'Rin', 'Vixel', 'Wheel', etc.
  • The Company however does not have any major competing brands in feminine & adult sanitary care, including incontinence like Kimberly Clark. It also does not have a strong foothold in any paper products.
  • In terms of size, the company is much bigger than Kimberly Clark as it had $57.7 billion in net sales and it has approximately 154,848 employees.
Value Proposition
  • Unilever’s most important value proposition is its ability to provide quality goods at reasonable prices. Its scale allows it to produce goods at relatively lower cost while maintaining quality.
  • Unilever owns a significant number of brands, each with its own unique value proposition. For example, Magnum is known for providing quality ice-cream at premium, while Knorr is known for providing household items, such as stock cubes and sauces, at very inexpensive prices.
  • The company's ability to have access to niche markets, particularly in developing countries, adds on to its value proposition by making its products omnipresent globally. This coverage gives Unilever a strong branding, driving sales.

Edgewell Personal Care

Website
  • The company's website can be accessed here.
Why It is a Close Competitor and Not a True Competitor
  • The company closely competes with Kimberly Clark in feminine care brands such as 'Carefree', 'Playtex', 'Stayfree' and 'o.b brands'. It offers tampons and market pads and liners and is one of the top three manufacturers of feminine care products in North America. Thus, the Company acts as a strong competitor to Kimberly in this product line.
  • Edgewell Personal Care, however, does not operate in the paper products (bath, towels, facial) category as it has no offering in that segment, whereas Kimberly is an extremely potential player in that category.
  • In terms of size, this company is much smaller in scale than Kimberly, with revenues of just $2.2 billion in 2018 and approximately 5,900 employees.
Value Proposition
  • The company has several strong brands in growing categories and enjoys a unique "Challenger" position. In addition, it has a diverse geographic footprint and a culture dedicated to innovation, productivity, and value creation.
  • It has a history of strong profit growth and cash flow generation and a history of successful M&A which adds on to its value proposition.
  • Edgewell Personal Care 's value proposition is further accentuated by the ongoing value drivers that it leverages, such as accelerate top line growth, systematic cost reduction, substantial free cash flow generation, and disciplined approach to acquisitions.

Research Strategy:

We were unable to provide true competitors which are similar in size and product offerings. All the close competitors identified who deal in the same product categories as Kimberly Clark are much bigger in size and operations or the ones which are somewhat close in size (revenue/number of employees) do not deal in all the Kimberly product categories.
In order to find Kimberly Clark's true competitors, our first strategy was to initiate a search through various credible company databases, such as Zoom Info, Craft.Io, Hoovers, Crunchbase, and Manta, after studying the business model and product offerings of Kimberly Clark. These databases are the most potential source where any pre-compiled list of competitors is present for any company. We were able to locate a list of competitors for the company through these databases, including P&G, Unilever, Edgewell Personal Care Company, Georgia-Pacific, Clorox, and Krugar Products, among others. However, on comparing the size of these in terms of revenues or number of employees none of them was in close ball park of Kimberly. Some players, like P&G and Unilever, were found to be much bigger in size, while those like Krugar and Edgewell were much smaller. Also, apart from P&G, there was no other company found that operated in both adult & feminine care (including incontinence) and paper (bath, towels, facial) products in tune of the scale of Kimberly. As this strategy resulted in identifying few close competitors of Kimberly, it did not reveal any true competitors.
Our second strategy was to hunt through the company's website, press releases, annual reports, presentations, earnings call transcripts, management commentary, and management interviews. All these are potential sources where any company provides insights into its competition especially in annual reports and, at times, discloses the players it considers its direct competitors. Hence, we decided to follow this path and see if Kimberly had disclosed any direct competitors which we could use as a proxy for true competitors. While the company did mention that it faces competition from several established brands as well as private label players in its annual report, it does not directly mention or identify the names of any of its competitors. Also, it does not provide any direct comparison with competitors in earning call transcripts. Hence, this strategy failed to yield desired results.
Our third strategy was to scour through the industry level reports for the key product segments of Kimberly from sources like Deloitte, Mckinsey, Statista, Nielsen, Business Insider, etc. Such reports are an extremely potential source of key players operating in any industry and our aim was to identify key players in the "Paper Products" and "Adult & Feminine Care" industries which are the major operating segments of Kimberly and then triangulate the list of true competitors from the same. While we were able to find relevant reports for these segments, the other major players mentioned in these were again similar to the found above. These included P&G, Unilever, Georgia-Pacific, and Edgewell Personal Care Company. Couple of new names like PayChest Inc. and Thinx Inc were also found through the reports, but again none of these had the similar products or size like that of Kimberly. For example Paychest Inc. has $6.1 million in revenues as compared to Kimberly's $18 billion and does not offer any adult or feminine care products. Thus, no true competitors could be identified through this strategy as well.
Our fourth strategy was to hunt through the media articles from Forbes, WSJ, Business Insider, Live Mint, Bloomberg, Reuters, Capital IQ, etc., along with various feminine and adult care blogs such as 'Menstrupedia', 'Honey Pot', 'Represh', 'Healthline', etc. These are again potential sources where various company profiles belonging to a sector/industry are discussed and our idea was to identify any players through these sources which are true competitors of Kimberly. However, no pertinent information could be located through these sources. All the information found discussed the profiles of close competitors mentioned above, like Unilever and P&G, along with the information on the top brands offered by these companies in feminine and adult care as well as paper products.
Our last strategy was to hunt through third party broker/analyst reports, especially the initiating coverage reports on Kimberly, as it is a public company. These reports are an extremely potential source where brokers undertake relative valuation of the companies that they track. Such valuation entails comparison of the company valuations with that of competitors. Our idea was to leverage these reports in order to identify any true competitors of the company. While we were able to locate the analyst coverage for the company, most of the reports were behind pay walls and the public information available was centered around the price targets, buy/sell recommendations, and the financial analysis of the company, with no information regarding its competitors. Hence, this strategy did not work out either.

From our research, we can conclude that the primary reason for the information to be missing is the fact that not many players are as diverse as Kimberly in their product offerings, due to which it has a clear competitive advantage and no true competitors, although it does have many close competitors.
Part
04
of six
Part
04

Kimberly Clark - Competitors: The Findings

One of the top competitive advantage of P&G when compared to some of its competitors is the low cost at which it sells its product.

1. P&G

Competitive Advantage

  • The company uses differentiation as its generic strategy for competitive advantage. Procter & Gamble highlights quality and value in its consumer goods. For example, the company offers high quality cleaning agents, like Tide laundry detergent, at affordable prices. Based on this generic competitive strategy, a suitable strategic objective is to maintain P&G’s high investments for R&D to ensure high-quality and valuable products.
  • When compared with some of its competitors such as Unilever, the company sells some of its product at a low cost.
  • The company has been in the industry for over 181 years and has experience in producing products in the industry. On top of that, it has won the trust of millions of customers worldwide. P&G products can be found in millions of living rooms, kitchens, laundry rooms, and bathrooms and have been passed down from generation to generation.

Differentiating Factors

  • The company is keen when it comes to safety. Every single product goes through science-based quality checks. The process is similar to that of regulatory agencies around the world such as the US FDA, EPA, the EU, the WHO, and others. This science based strategy originates from doubt, define, determine, and diligence.

Strengths

  • The company has subsidiaries that are very valuable on their own such as Gillette, which is the 138th ranked brand in the world and has a 20 billion dollar brand valuation. Tide and Ariel are in the top 500. Duracell, Pampers, Pantene, Vicks, Whisper, and Olay are really popular. Naturally, P&G is an umbrella brand and trusted by many.
  • The company has an excellent R&D which enables the company to innovate new products that are extremely successful.
  • The company has the high gross profit margin in the FMCG industry. As a result, the brand invests a lot in brand building and generates a large amount of revenue.
  • The company has the best distribution channel which ensures the deliveries of the products are accessible in required locations.
  • The company operates globally in more than 180 countries accompanied by 25 manufacturing sites across 19 states in the US. Around the world, it owns and operates 85 manufacturing facilities across 37 nations.
  • The company's growing online presence is evident, as the company has experienced increased revenue from online sales in the recent years. E-commerce sales of P&G have grown faster in recent years. Apart from e-commerce channels for online sales, the company is also using online channels for marketing.

Perceived Weaknesses

  • The company over depends on the US and Walmart for market. Walmart was the largest distributor of P&G products in 2018, 2017, and 2016. The net sales of the company linked to Walmart were 15%, 16%, and 15%, respectively. The US also dominates the market of the company, as it accounts for 41% of the total net sales of P&G. No other individual country exceeded 10% of its total net sales.
  • The company has been experiencing stagnant growth for the past 5 years. In 2014, the company's revenue was 74.4 billion dollars, in 2017 the revenue was 65.1 billion dollars, which was a decline. Then, in 2018, its revenue picked up and touched 66.8 billion dollars.
  • For a while, the company experienced management-related problems which stimulated poor strategic decisions. This explains why the company is not seeing impressive growth despite reducing the size of its product portfolio.

Revenue

  • The total revenue of the company in 2018 was USD 66,832,000,000.
  • The Adult & Feminine Care (including incontinence) and Paper (bath, towels, facial) segments accounted for 27% of the total revenue.
  • Calculations: 27% x USD 66,832,000,000 billion = USD 10,804,464,000 billion

2. Unilever

Competitive Advantage

  • The company is one of the world’s leading consumer goods companies, producing and selling around 400 brands in more than 190 countries.
  • The company is a market leader in the industry and this allows them to be market trend-setters.
  • The flexibility of their products ensures they are never losing their market share.
  • The company has won the trust of many customers. About 2.5 billion people use Unilever products to look good, feel good, and get more out of life.

Differentiating Factors

  • The company has unique sustainable brands that supports social and environment wellness. It also contributes to the USLP and inspires people to make a genuine difference. For example, Dove helps young people build self-esteem, Dirt is Good products encourage kids to enjoy real play, and Knorr is working to change the food system from farm to fork.

Strengths

  • The company has global footprint, as it operates in more than 190 countries globally. This allows them to be an international brand.
  • The company has strong distribution channels which ensures the company serves every geographical region it can cover.
  • The company has a strong workforce of over 170,000 employees from various cultural backgrounds.
  • The company has a successful track record of developing new products initiated by research and development activities the company invests on. This offers the company the flexibility to come up with new products as per the changing requirements of consumers.
  • The price of the products is flexible and this allows the company to play on its policies from time to time while adjusting the price for its customers. This ensures they never lose their market share.

Perceived Weaknesses

Revenue

3. Edgewell Personal Care

Competitive Advantage

  • The company has 6000 employees and operates in over 50 countries with 25 brands.
  • Despite being new in the industry, as it was opened in 2015, the company's brands and people have a long history of making the products that people love. Inspired by their focus on wellness, they have a portfolio of products that synthesizes their deep expertise.

Differentiating Factors

  • The company's unique branding with an image of hummingbird differentiates the company from other competitors as it implies the company is an ultimate challenger, is fast, agile, and innovative, small but strong, and resourceful. It packs a punch well beyond its size.

Strengths

  • They have a strong distribution network to utilize the full potential of the market.
  • The expansion has helped the company to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • The company's dedicated customer relationship management department has been able to achieve high level customer satisfaction and good brand equity among potential customers.
  • They have highly skilled workforce through successful training and learning programs. The company invests heavily in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

Perceived weaknesses

  • As per the scale of expansion and different geographies the company is planning to expand to, they need to put more money in technology to integrate the processes across the board.
  • Even though Edgewell Personal Care is spending above the industry average on research and development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bringing out products based on tested features in the market.
  • The marketing of the products by the company has left a lot to be desired. Even though the products are success in terms of sale, its positioning and unique selling proposition is not clearly defined which can lead to attacks in this segment from the competitors.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • There is limited success outside the core business despite being one of the leading organizations in its industry. It has faced challenges in moving to other product segments with its present culture.

Revenue

  • The feminine care segment represented 15% of the company's net sales in 2018 and 2017.
  • The company's net sales, as of 2018, was USD 2,234,400,000 billion.
  • Calculations 15% x 2,234,400,000 = USD 335,160,000 million
  • The companies sun and skin care products accounted for 20% of the net sales in 2018.
  • Calculations 20% x 2,234,400,000= USD 446,880,000 million
Part
05
of six
Part
05

Kimberly Clark - Trends: Adult & Feminine Care (including incontinence) Products

Three trends in Kimberly Clark's Adult & Feminine Care Products are the personalization of pads for teens, the use of organic materials in new cotton liners, and authentic marketing of their Poise line of adult incontinence products.

Personalization of Teen Sanitary Pads

  • U by Kotex provides specially marketed Teen and Tween sanitary pads. The wrappers around each pad are colorful and have unique patterns to escape the bland packaging used by other companies. This personalization of the products to a younger demographic makes them more appealing to the target audience.
  • This trend was chosen because it was listed as one of the efforts undertaken by Kotex to drive global growth.
  • Kimberly-Clark quickly broke into the billion-dollar sales mark. The Marketing Manager in Feminine Care of Kimberly-Clark Australia, Margaret Cheung, says "success has come from showing girls that the brand really understands them because we talk directly to them and injecting energy and excitement into the feminine hygiene category by maintaining the fun and edgy personality of the U by Kotex brand."

Organic Materials in New Products

  • Kotex recently launched two new organic cotton products in their U by Kotex range of liners. The use of organic cotton products effectively eliminates the risk of discomfort or allergic reactions to products which would normally bar the use of such products made of inorganic materials.
  • This trend was chosen because it is a direct response to customer feedback, creating products based on customer needs, which is important for company growth. Mintel, a market research firm in London, UK, says "Individually, natural/organic femcare brands have little market power, but collectively, this is where we’re seeing the growth and this is the genre of products that has the greatest potential to disrupt mainstream brands." This innovation of new products in direct line with customer feedback is breaking into whitespace that is almost untapped by current feminine hygiene product creators and protecting themselves from other companies using these materials to steal from their customer base.
  • This trend was only undertaken five months ago, in June 2019. While the amount of companies marketing the use of organic materials in their products has grown from 4.3% in 2016 to 9.4%, there is no measured effect on Kotex's revenue or growth due to this innovation at the moment due to its infancy.

Marketing Strategy of Poise Products

  • Adult incontinence in women, or Light Bladder Leakage (LBL), is a fairly common, but taboo subject, affecting almost 40% of the Australian female population over the age of 35. Poise by Kimberly-Clark aims to normalize the condition through some humorous and personalized marketing strategies in an attempt to market to the women more organically while leading them to the proper products to treat their condition.
  • This trend was chosen because it has been shown to be a direct contributor to Poise's growth in revenue.
  • The growth in sales due to the successful campaigning strategy is showcased when Cheung states, "We saw that the penetration of those buying a specific adult care product had increased from 26 per cent to 45 per cent."


Part
06
of six
Part
06

Kimberly Clark - Trends: Paper (Bath, Towels, Facial) Products

Kimberly Clark's paper products - including paper towels, bathroom tissues, facial tissue, and napkins - are categorized under its consumer tissue division. Some of the trends surrounding Kimberly Clark's consumer tissue category include the growth of the category, sustainable packaging, and its increase in price.

Kimberly Clark's Growth

  • In 2017, Kimberly Clark's net sales for its consumer tissue category was $5.9 billion. This figure increased to $6 billion in 2018.
  • While volumes were down in facial tissue and bathroom tissues, they increased for paper towels.
  • In the third quarter of 2019, sales in its consumer tissue segment increased by 1%, while net selling prices increased by 5%.
  • Third quarter profits for Kimberly Clark's consumer tissue division increased by 25% due to the company's lower input costs, higher net selling prices, and cost savings.
  • In North America, consumer tissue sales increased by 5% and net sales rose by 8%.
  • The company's growth has been included as a trend because it reveals how Kimberly Clark is doing in the paper category, and it is indicative of how the brand might do in the future. The company's growth allows its investors and shareholders to be confident in it.

Kimberly Clark's New Innovations

  • Kimberly Clark is the first "major towel and tissue manufacturer in North America to introduce products made with 20 percent plant fiber in place of tree fiber or recycled fiber."
  • To do this, the company had to develop a new supply chain in order to directly get wheat straw from US farmers.
  • In 2018, the company partnered with Deltares to develop Waterloups - a tool that tracks climate and social factors affecting the availability of water.
  • The company claims that not only could this help users, it could also be useful for its tissue-making operations, most of which are situated in watersheds with high risks of water scarcity.
  • The company uses sustainable and innovative packaging methods for its consumer tissue brands like Huggies and Kleenex. For packaging, it uses materials that are recyclable, reusable, and degradable.
  • Kimberly Clark's innovations highlight how the company is leveraging technology and new concepts. This makes it a trend. According to BDS, innovation can improve a company's sales. It also boosts the company's market position.

Kimberly Clark Increases Price of Consumer Tissue Products

  • Kimberly Clark increased its prices and packaging counts for several consumer tissue brands, including Cottonelle.
  • Kimberly Clerk increased the price of its Viva paper towels and Kleenex facial tissue by mid single digits.
  • The company's prices for tissue paper increased by 7% in North America. This helped Kimberly Clerk "absorb $135 million in higher costs globally for pulp and other materials."
  • This increase in price was done to offset significant commodity cost inflation in North America.
  • The price increase has paid off, as the company's organic sales have grown.

Research Strategy

In order to gather some trends surrounding Kimberly Clark's paper (bath, towels, facial) product category, we examined the most discussed topics around the company's paper category (it calls this category, consumer towel). We focused on topics related to the company's consumer towel packaging, innovations, and growth. We chose trends that were discussed in at least two credible publications within the last two years.
Sources
Sources