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THE WAY FORWARD Recommendations for Leveraging Sustainability and Optimizing Existing Green Lines Instructor: Kim Bates Course: Integrative Weekend – W2012 Date: March 4, 2012 Consultants: Deborah Sue Chee Eva von Biehler Mehdi Tahuri Serhiy Rudak S. Mehmood Ul-Hasan Vern Puchoon Executive Summary In the face of consumer changes and current economic conditions, Clorox must make several key decisions regarding resource allocation and strategic focus across its product divisions. Specifically, there has been a strong focus since 2006 on product sustainability and green initiatives.

As such, Clorox needs to determine if this is the right strategy to pursue for the long-term and if it needs to be green organization-wide, not just toward a few products.

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In recent years, many changes have been made to start shifting public perception of Clorox toward being an eco-friendly supporter. Due to this strategy and consumer trends, Clorox should stay the path of being an eco-friendly, green organization. Current consumer preferences support the notion that green sustainability is a megatrend, not a passing fad.

To achieve the Centennial Strategy goal of double-digit profit growth in 2013 and to implement green initiatives and best practices across all Clorox product divisions, small changes in strategy and an increase of approximately $18 million in marketing and advertising needs to happen in the short run. The tweak in strategy will open new growth opportunities in other consumer segments, which will allow Clorox to capitalize on consumer trends and increase revenue. Advertising will support and educate these new segments and is based on the original advertising campaigns that were launched for these divisions in previous years.

Research and development will continue in the medium and long run to ensure Clorox innovates products and takes advantage of growth trends outside of the domestic U. S. market. Implementing the “Clorox Clarity” program will centralize resources to the eco office, allowing more efficient distribution and communication with Clorox’s corporate office. More importantly, the eco office will implement a framework to foster knowledge sharing, information distribution and skills transfer from the three current green divisions – Burt’s Bees, Brita and Green Works – across the entire organization.

This program will be key in making Clorox a truly eco-friends, sustainable organization for the foreseeable future. The proposed recommendations provide a detailed framework and timelines to ensure that Clorox takes advantage of a corporate advantage through sustainability while still achieving the original profit goals targeted in the Centennial Strategy. 1 Introduction After many consecutive years of revenue growth across multiple divisions and product lines, Clorox is now faced with stagnant forecast projections and is in endanger of not achieving its goal of double-digit profit growth for its Centennial Strategy by 2013.

Problem Statement How should Clorox allocate its resources among its brands and products in order to achieve its Centennial Strategy targets while continuing to increase its sustainability efforts? Critical Issues Clorox is currently facing several issues. First, it needs to determine whether the “sustainability” trend is viable in the long term and if it offers ample opportunity for growth. Specifically, the company has to assess the potential of the “green” or “sustainable” market and the return on investment that can be achieved by penetrating this market.

The second issue facing Clorox is the disproportionate revenue generated by its product portfolio. While there is a significant push for a sustainability strategy, the three product lines in this category make up only 10% of the company’s revenue. The remaining 90% of revenue comes from Clorox’s large portfolio of cleaning and household products, many of which are in declining markets. To put this into perspective, in 2010 $4. 98 billion out of $5. 53 billion in sales occurred in declining markets, while growing markets accounted for only $0. 55 billion in sales (Barley, 2011).

If Clorox does not restructure its portfolio mix and increase revenue contribution from the growing markets, it faces the risk of losing sales and its position in those markets. Using its current resources, Clorox needs to determine how to allocate those resources among its current brand portfolio. Equally important is determining whether to invest in new product lines or brands. Clorox also has to decide whether to expand into international markets or focus strictly on expanding its market share across its brands in the primary U. S. market.

Asian, South American, and European markets offer potential for growth but the cost of expanding into these markets and the limited availability of financial resources pose concerns with respect to international expansion. Focus on growth versus profitability is another important strategic decision that needs to be addressed. Clorox projects flat sales for 2011, which is not a positive indicator for investors’ 2 interests and the company performance as a whole. Brands like Green Works have not turned profitable yet and are decreasing the bottom line. It is important that Clorox determine a balance between growth and profitability.

Since Clorox made the shift toward a socially responsible brand image it needs to sustain the momentum it created with its initial marketing efforts and continue to increase awareness among the public about its environmental, social and financial contributions. Lastly, Clorox must determine how the knowledge and expertise it gained through its “green” products will be shared throughout the entire organization. This needs to happen in order to use its corporate advantage in sustainability and involves determining which human resource strategies can be used to foster this advantage across its divisions.

External Analysis The future of the U. S. market for household cleaning products is changing and companies are trying to adapt to a growing change in consumer preferences and demands. The consumer is becoming increasingly interested in a greener and more sustainable lifestyles and products. In 2009, “green” cleaners generated $557 million in sales across the country and, by estimates, will generate approximately $2 billion in sales by 2014 (Market Wire, 2010). Another study reports that in 2010 42% of American adults have used a “green” household cleaning product during the year.

This translates into approximately 48 million households and $12 per household spent on green cleaning products (MyCompanyPR, 2011). The marketing challenge currently facing companies in the household cleaning industry is how to effectively communicate to consumers the benefits of “green” – efficacy, safety, ease of use and convenience – simultaneously. Yet, as market demand for such products continues to grow and consumers become more interested in green and sustainable lifestyles, the opportunity for companies to increase sales by targeting these segments will only increase.

Several factors affect the competitive landscape and the business decisions facing Clorox. From a macro-environmental perspective, trends in social norms and preferences must be considered. As discovered in the 2007 Cambridge Group Demand Landscape study, there has been a shift in consumer preference toward eco-friendly, sustainable products (Barley, 2011). Furthermore, consumers are much more likely to care about non-toxic ingredients, safer products, and the effectiveness of “sustainable” products. 3

Related to this social shift is a combination of political, technological, and environmental shifts that could impact the way Clorox operates. Carbon taxes, government regulation of product development and an increased awareness of carbon footprints may affect how Clorox produces, positions, and markets its products. Legal implications of claiming products as “green”, “natural”, or “sustainable” could come into play, as there are currently no requirements in place to refer to products as such (refer to Exhibit 1 for a full PESTEL analysis).

Finally, the economic landscape is a major concern for Clorox. The current recession will likely impact the company’s bottom line, as can be seen by a projection of flat sales for fiscal year 2011. In the absence of a stable or growing economy, Clorox needs to explore the potential of implementing alternative strategies to increase growth and profitability. Internal Analysis A complete SWOT analysis of Clorox (Exhibit 2) reveals that the Clorox brand poses a strategic advantage and weakness for its “green” product line.

While the Clorox brand name brings instant awareness and credibility of its cleaning products within Green Works, the brand hinders products like Burt’s Bees that strive for a non-harmful, natural image – something that the Clorox bleach product does not portray. This is a key consideration from a branding and positioning standpoint. Leveraging the Clorox brand name has an immediate and serious impact. Where it acts as a support to one product line, it acts as a deterrent to another. Another key concern for Clorox is how its resources should be divided among its product lines.

While the company’s three lines of “green” products (Brita, Burt’s Bees and Green Works) are a major component of its sales and marketing strategy, these products only represent 10% of total revenues. In order to support and continue its sustainability strategy, revenues for its green lines need to represent a much larger portion of its overall portfolio. Clorox faces risks of high commodity costs, and the industry it operates in is extremely competitive. Additionally, Clorox’s highly leveraged position gives it more risk than industry peers.

Due to its international presence there is also currency risk. Clorox has opportunities that it can leverage to increase its “green” product revenue. The company’s relationship with Wal-Mart, its brand affiliation with Sierra, the availability of new channels to reach consumers (ex. social media) and the growing market for green products can all positively impact the growth of this segment. 4 The strategic focus on sustainability needs to bleed into Clorox’s remaining 90% of revenue generating products.

As outlined by (Collis & Montgomery, 1988), an organization successfully leverages a corporate advantage by aligning its resources uniformly with its product lines. As such, Clorox needs to look at how its hub of resources will be aligned and distributed among its diversified product lines to ensure its sustainability strategy is leveraged as a corporate advantage across the organization. Decision Criteria The recommendation should address the following key decision criteria: 1. Environmental sustainability (“green”) for the next 3 to 5 years 2.

Profitability for Clorox 3. Growth potential for Clorox 4. Increase in Clorox brand equity 5. Framework for learning and knowledge transfer across the organization 6. Use of existing resources (keep incremental costs to a minimum) The justification for these decision criteria is outlined in Exhibit 3. Alternatives The objectives and goals for Clorox must be considered when proposing alternatives. At the forefront of these goals is the Centennial Strategy plan for revenue. In addition, brand equity and growth opportunities are factors to consider.

Option 1 – Expand into Emerging Markets with Current Product Mix Open up new markets for existing product lines, especially in areas with high growth and demand for the current product mix. Pros Take advantage of thriving markets with demand for green products Utilization of Clorox’s already existing infrastructure in Latin America Strong competition from Asian manufacturers with low operation costs Cons Does not address the disproportionate revenue in company’s product mix Added cost through new and unproven distribution and marketing mix Further exposure to currency changes Option 2 – Acquire Other Value Brands to Expand Market Share Acquire companies of other value brands in markets where Clorox does not have a presence. For example, in the case of Bert’s Bees, Clorox can buy companies that cater to the needs of consumers other than “Committed Naturalists” and “Health and Beauty Sleuths. ” This market is approximately 78% of the total natural product market. If priced right, this acquisition option would allow Clorox to expand to untapped markets with significantly less cost.

Pros Increased product line and opportunities in new market segments Proven success in untapped market segments by Clorox Increased market share Cons Lack of synergy through addition Risk of investment and impact on profits Additional impact on margins due to cost of borrowing for an entity already too leveraged Option 3 – Concentrate on Growth and Profitability of existing product line with introduction of “Clorox Clarity” knowledge sharing program Focus on a mix of profitability or growth enhancements with current green brands while spending effort on launching “Clorox Clarity” initiative.

Pros Improved bottom line Enhances rand equity with increased emphasis on corporate responsibility Utilizing existing resources such as established distribution and marketing channels Investment in line with long-term strategies of going green Minimal investment and exposure in a highly volatile financial environment Modest growth where potentials exist See Exhibit 5 for Decision

Criteria Matrix Recommendation Following a careful analysis of possible alternatives, the financial impact of such options and Clorox’s objectives, the following recommendation should be implemented: Clorox should focus on growth and profitability for Burt’s Bees, growth for Brita and profitability for Green Works by changing product price and positioning, increasing 6 Cons Foregone potentials of new product lines and new markets Modifying proven model for corporate success which may not yield to expected results arketing efforts, driving awareness and adoption, and capturing additional market share. This adjustment in strategy includes an immediate, short-term increase in marketing and advertising spend to create awareness and educate consumers about green sustainability in the Clorox products. An investment of approximately $18 million in each of the next two years will help solidify a leadership position in the domestic market for Clorox’s three green product divisions (Brita, Burt’s Bees, and Green Works).

In addition, the company needs to implement “Clorox Clarity” – an internal knowledge transfer and sharing program that ensures that best practices for going green are used throughout all Clorox brands and divisional product lines. Implementation Overview and Timing Green Works To achieve profitability in the 3 to 5 year time horizon, marketing and promotional efforts to increase awareness and product adoption need to be increased significantly. As such, the full $15 million advertising budget should be allocated to market Green Works’ products and gain market share.

Additionally, the “Clorox” logo should be removed from all packaging of Green Works products as there is a negative association of the Clorox brand with harmful bleaching chemicals. In place of the Clorox logo, the Sierra Club logo should be leveraged as it will enhance the environmentally friendly nature of the product. Lastly, research shows that TV programming concerning environmental issues accounts for 58% of first time eco-friendly household product purchases. As a result, Clorox should invest in television advertising that runs during these programs to increase awareness of Green Works products.

Once the product has been established in the marketplace, additional access to consumers through Facebook and other social media distribution networks can be used to reach consumers. Marketing to consumers through Target and Wal-Mart will also help increase product adoption. Burt’s Bees Clorox should focus on growth and profitability by expanding its target market through a lower price point while still maintaining its premium status. This strategy will target “Beauty Enthusiasts” and “Demanding Conventionalists” who represent access to 39% more female consumers and an additional 54% of NPC market sales.

Current barriers to accessing this group are pricing and lack of product knowledge. By lowering its price to an optimal level and 7 repositioning the existing product lines to appeal to this secondary market, Burt’s Bees products open the possibility to almost double sales. The repositioning strategy should include providing more samples to new target consumers, packaging that will highlight the products ingredients, and fragrances sought by the target market. This will result in an increased market share and sales volume that can offset any potential loss from existing primary customer segments leaving.

For the medium term, Burt Bees should focus on increasing penetration in its existing global markets, and in the long term, explore expanding into new and growing emerging markets such as China and India via a line of organic products. Brita Given Brita’s high profit margins, Clorox needs to increase the sales within the product line and focus on growth. Brita’s products currently compete in only 12% of the $2 billion water filtration market, which represents a fractional $240 million. Penetration into other sub-segments of the water filtration market offers significant opportunity for growth.

Given the size of the faucet based filtration market for households, Brita must leverage its established brand image and focus on expanding within this segment. In the short term (1 year), Brita should invest in marketing the faucet based filtration system by targeting individual households and emphasizing the superior taste of Brita processed water and its affordability. In the medium term (3 years), Brita needs to invest in R&D of other products and expand its product line to an on-the-go water filtration system.

In the long term (5 years), Brita needs to take advantage of the growing demand by schools other public institutions that are going bottle-free and the growing demographic looking for alternatives to bottled water. Clorox Clarity Set up an ambidextrous structure with eco-office leading the research and innovation in green eco-friendly products in addition to overseeing the Clorox Clarity program. Clorox Clarity is an initiative to create a corporate wide knowledge centre for transfer of green and sustainability know-how from leading eco-friendly brands inside the Clorox family to the primary product group.

Gradually assimilate the non-green products under the green banner. Each of the three sustainable brands will designate Subject Matter Experts (SMEs) to transfer the green best practices to the knowledge centre and consult the managers from the primary product team on developing viable plans for improvement of sustainability indicators in the respective product line. In addition to an intranet being set up to facilitate file sharing and information transfer, bi- 8 weekly meetings will be conducted by the SMEs and non-green product managers and marketing managers to share this information and expertise.

This information will include but will not be limited to: best practices, case examples, marketing messaging, planning, product development and pricing strategy. (See Exhibit 8 for a full timeline implementation plan for these activities. ) Financial Analysis Following a careful evaluation of Clorox’s financial goals, which include double-digit economic profit growth and annual sales growth of 3% to 5% by 2013, the following estimates have been derived given the company’s three to five year strategy, marketing, research and development objectives and overall CPG industry and U. S. economic outlook.

Sales Growth Projected Using Centennial Strategy Annual Targets Given the current state of the U. S. economy and its forecasted real GDP (see Exhibit 9), a conservative approach was taken with respect to sales projection and calculated using the lower limit of the Centennial Strategy annual target of 3% to 5%. This model does not allow Clorox to achieve the Centennial goal of double-digit profit growth by 2013. (See Exhibit 6 for Clorox Income Statement (3% Sales Growth)). Sales Growth Projected Using Historical Figures To achieve the Centennial Strategic goal of double-digit profit rowth by 2013, the following model needs to be used. With some key assumptions regarding revenue, advertising spending and research and development costs (see Exhibit 4), this model achieves the goal of 10% profit growth in 2013. Clorox projected flat sales for its fiscal year ended June 30, 2011. As a result, sales and all associated elements remained the same in 2010 and 2011. In 2012 and beyond, both models assume costs of goods sold are proportionate to the increases in sales and interest expense declines at a rate of 1. 95%, which is the average rate for years 2008 to 2010. Other expense (income) remains constant and income taxes are calculated using a 34% tax rate. An increase in revenue of $249 million and $260 million for years 2012 and 2013, respectively, accounts for this growth. Given the implementation plan for the three green products, it is reasonable to assume that these targets can be met. Specifically, the recommendation opens Burt’s Bees products to double the market spend and more than double its current audience.

Assuming sales increase in proportion to the market segments, almost 9 doubling sales for Burt’s Bees products alone could help attain this goal ($221 million in 2010). Additional revenue from Brita and Green Works almost guarantees the goal to be met by 2013. Risks and Contingencies Burt’s Bees Risks 1. Loss of market share in existing target market segments (committed naturalists and health and beauty sleuths) due to repositioning of the brand towards new target markets 2. Lack of adoption by newly targeted market segments (beauty enthusiasts and demanding conventionalists) 3.

Lowering the price might dilute the current brand image Contingencies 1. Loss of market share in current segments which only accounts for 810% of the targeted market will be mitigated by gains in the newly targeted segments which represent 39% of targeted market 2. Create a new product line specifically designed and developed for the two new segments 3. Adjust the brand image to price sensitive segments which represent 39% of market Brita Risks 1. Saturation in faucet mount filtration market segment does not allow for increased market share and significant sales growth 2.

Lack of focus on the pitcher product leads to a decrease in market share in the market segment where Brita currently dominates 3. Forgone first mover advantage in new markets for bottle free water products in institutions and on the go water systems Contingencies 1. Switch focus to other segments such as on the go water systems or water house filtration 2. Market share will not drop quickly and necessary adjustments will be made to ensure dominant market share remains 3. Leverage existing Brita brand into new markets and focus on improving cost structure by being second mover 0 Green Works Risks 1. Marketing effort focused on efficacy is not effective at convincing consumer that the product works 2. Changing the Clorox label to Sierra does not increase consumer association with safety of product use 3. P&G and Unilever crash Clorox’s advertising campaigns with their large budgets and established distribution systems Contingencies 1. Start a promotional campaign in retail chains and give away samples to prove that the product works 2. Integrate emphases on Sierra brand into marketing campaigns and educate the consumer about Sierra’s reputation 3.

Create in store promotional methods and money back guarantees that entice new consumers to try the products and create buzz about Green Works Conclusion In light of the economic downturn and stagnant revenue growth projections for 2011, it would be easy to justify abandoning the Centennial growth strategy and sustainability initiatives. However, consumer preferences and growth trends have not changed. This supports a commitment to Clorox’s strategy for growth and profitability and proves green sustainability is a trend, not a fad.

A tweak to strategy and a small increase in short-term advertising will allow the three green product divisions to gain more market share, much like the results seen when advertising of these products first launched. The launch of the Clorox Clarity program to share knowledge and foster innovation of sustainability across the entire organization combined with continued research and development in the medium term and market expansion in the long-term will ensure Clorox attains double-digit profit growth by 2013 and secures a market leadership position in green sustainability for the future. 1 Bibliography Clorox. (n. d. ). Eco Governance. Retrieved 3, 2012 from Clorox Company website: http://www. thecloroxcompany. com/corporate-responsibility/planet/eco-goals/ Collis & Montgomery. (1988). Creating Corporate Advantage. Harvard Business Review. Green Household Cleaners to Double U. S. Market Share 2014 Says News Report. Retrieved March 3, 2012, from My Company PR: http://www. mycompanypr. com/green-householdcleaners-to-double-u-s-market-share-2014-says-new-report/pr/516/ The Clorox Company. 2010 Annual Report to Shareholders and Employees.

Retrieved March 3, 2012 from Clorox Company website: http://www. thecloroxcompany. com/downloads/annual-reports/ar10_complete. pdf The World Bank (n. d. ). The global outlook in summary, 2009-2013. Retrieved March 3, 2012 from The World Bank website: http://web. worldbank. org/external/default/main? theSitePK=659149&pagePK=2470434&c ontentMDK=20370107&menuPK=659160&piPK=2470429 U. S. Market for Green Household Cleaning Products Enters Forefront of Consumer Consciousness With Shift Toward More Eco-Friendly and Sustainable Lifestyles.

Retrieved March 3, 2012, from Market Wire: http://www. marketwire. com/press-release/us-marketgreen-household-cleaning-products-enters-forefront-consumer-consciousness1265177. html 12 Appendix: Exhibit 1: PESTEL Analysis Political Economic Social Technological Environmental Legal Carbon taxes Recession impact on consumer behavior, demands, necessities Health conscious population (ie: hand sanitizers) Increased product innovation Increased demand for environmentally friendly products Regulatory standards for natural products claims

Environme ntal preservatio n tax Cost of living & availability of disposable income More focus on CSR and relief efforts (ie: carbon footprints, Katrina ) Decreased product costs Carbon footprint awareness HR legal implication of mergers Exhibit 2: SWOT Analysis Strengths •Established brand name •Product breadth •Management •Distribution Network •Growth markets Weaknesses • Negative brand connotation with “green” • 90% of revenue in declining markets • Green Works not profitable • Limited resources for funding • Limited presence in “green” market Opportunities “Green” is a growing trend •Partnership with Sierra •Wal-Mart distribution •International markets •Diversified reach to consumers Threats •P&G and Unilever •Economic uncertainty •New competitors •Uncertain projections of “green” trend Exhibit 3: Decision Criteria Rationale Considering the market trend toward Eco-friendly/sustainable products and the company Environmentally mission of becoming Eco-Leader in consumer market place, the plan should reflect the Sustainable overall direction and milestones on the path to achieving sustainability improvement in (“green”) 25% of products by 2013 (Clorox, 2011).

Profitable Provide Growth Potential Positive Brand Equity Provide framework for learning/ knowledge transfer Leverage existing resources (keep low costs) Satisfy 2013 goal and remain profitable onward. Demonstrate how each component of the plan contributes to 2013 profitability and double-digit margin there on. Strategy should look for, consider and increase opportunities for growth targeting 3% to 5% year over year.

Enhance Clorox family brand equity by selecting socially respected partners and focusing on quality products that work in order to improve brand awareness, loyalty, perceived quality and association. As the long-term strategy of the company is to march toward greener, more environment friendly products we need a strategy to capitalize on the Green know-how and develop a mechanism to transfer the knowledge across primary brands. Utilization of Clorox existing corporate manufacturing and marketing resources is important to reduce both cost and carbon foot-print. 13

Exhibit 4: Financial Assumptions Financial Assumptions: $15M budget for greenworks Year 3 and 5 – increase in R&D Assumed growth rate is lowest target range increase prop to sales assumes ad increase is proportional across green brands (0. 0075% of sales) – taken from 15million for GW as percent of 2billion sales assumes $2 and 3million RnD costs in 2012 and 2014 for Brita and Green Works, respectively (as per timeline plan) implement in 2011/2012 restructuring costs (learning and knowledge transfer program, eco office) assume interest expenses decline at an average rate of 1. 95% (average of last three years) other expenses remain constant assume tax rate stays constant at 34% Exhibit 5: Decision Criteria Analyzed Long Term Sustainability 1. Expand into Emerging Markets 2. Acquisition/New Product Lines 3. Existing w/ Clorox Clarity Profitable Growth Potential Brand Equity Green shared learning Low costs Total 3 2 5 Exhibit 6: Projected Growth at 3% Sales Growth

Projected Growth – Clorox Income Statement (3% Sales Growth) Years ended June 30 Dollars in millions, except per share amounts Net sales Costs Gross profit Selling and administrative expenses Advertising costs Research and development costs Restructuring and asset impairment costs Interest expense Other expense (income), net Earnings before income taxes Income taxes Net earnings Y5 2015 6,229 3,441 2,788 841 515 118 0 133 25 1,156 393 763 Y4 2014 6,047 3,340 2,707 816 525 118 0 134 25 1,088 370 718 Y3 2013 5,871 3,243 2,628 792 536 115 2 136 25 1,021 347 674 Y2 2012 5,700 3,149 2,551 769 536 121 4 137 25 958 326 633 Y1 2011 5,534 3,057 2,477 747 518 119 4 139 25 925 322 603 2010 5,534 3,057 2,447 747 518 119 4 139 25 925 322 603 14 Exhibit 7: Historical Growth Projection Historical Projection – Clorox Income Statement (4. % Sales Growth) Years ended June 30 Dollars in millions, except per share amounts Net sales Costs Gross profit Selling and administrative expenses Advertising costs Research and development costs Restructuring and asset impairment costs Interest expense Other expense (income), net Earnings before income taxes Income taxes Net earnings Y5 2015 6,599 3,646 2,954 891 515 118 0 133 25 1,272 432 840 Y4 2014 6,315 3,489 2,827 852 525 118 0 134 25 1,172 398 773 Y3 2013 6,043 3,338 2,705 816 536 115 2 136 25 1,075 366 710 Y2 2012 5,783 3,195 2,588 781 536 121 7 137 25 981 334 648 Y1 2011 5,534 3,057 2,477 747 518 119 4 139 25 925 322 603 2010 5,534 3,057 2,447 747 518 119 4 139 25 925 322 603 Exhibit 8: Timeline for Implementation Timeline for Implementaiton PLANNING Year 1 – 2011 Q3 EXECUTION Year 2 – 2012 Q3 Year 3 – 2013 Q3 Year 4 – 2014 Q3 Year 5 – 2015 Q3

Q1 Green Works Competitive marketing Increase availability through Target and Wal-Mart Sierra packaging change TV advertising Facebook promotions R&D (new products) Expand product lines Enter new markets Brita Market to households (faucets) R&D – product innovation Enter colleges and universities Burt’s Bees Lower price Reposition to new segments Repackage In-store sampling New fragrances Expand exisiting global markets Enter new markets Clorox Clarity Identify Green Product SMEs Assign Green Products to Eco Office (for resource allocation) Create Intranet for file sharing Schedule bi-weekly meetings Eco Office manages program Management rotation duties Q2 Q4 Q1 Q2 Q4 Q1 Q2 Q4 Q1 Q2 Q4

Sustainability,

Marketing,

Clorox,

Productmanagement,

Burt’sBees,

Brand,

Revenue,

BrandmanagementTHE WAY FORWARD Recommendations for Leveraging Sustainability and Optimizing Existing Green Lines Instructor: Kim Bates Course: Integrative Weekend – W2012 Date: March 4, 2012 Consultants: Deborah Sue Chee Eva von Biehler Mehdi Tahuri Serhiy Rudak S. Mehmood Ul-Hasan Vern Puchoon Executive Summary In the face of consumer changes and current economic conditions, Clorox must make several key decisions regarding resource allocation and strategic focus across its product divisions. Specifically, there has been a strong focus since 2006 on product sustainability and green initiatives.

As such, Clorox needs to determine if this is the right strategy to pursue for the long-term and if it needs to be green organization-wide, not just toward a few products. In recent years, many changes have been made to start shifting public perception of Clorox toward being an eco-friendly supporter. Due to this strategy and consumer trends, Clorox should stay the path of being an eco-friendly, green organization. Current consumer preferences support the notion that green sustainability is a megatrend, not a passing fad.

To achieve the Centennial Strategy goal of double-digit profit growth in 2013 and to implement green initiatives and best practices across all Clorox product divisions, small changes in strategy and an increase of approximately $18 million in marketing and advertising needs to happen in the short run. The tweak in strategy will open new growth opportunities in other consumer segments, which will allow Clorox to capitalize on consumer trends and increase revenue. Advertising will support and educate these new segments and is based on the original advertising campaigns that were launched for these divisions in previous years.

Research and development will continue in the medium and long run to ensure Clorox innovates products and takes advantage of growth trends outside of the domestic U. S. market. Implementing the “Clorox Clarity” program will centralize resources to the eco office, allowing more efficient distribution and communication with Clorox’s corporate office. More importantly, the eco office will implement a framework to foster knowledge sharing, information distribution and skills transfer from the three current green divisions – Burt’s Bees, Brita and Green Works – across the entire organization.

This program will be key in making Clorox a truly eco-friends, sustainable organization for the foreseeable future. The proposed recommendations provide a detailed framework and timelines to ensure that Clorox takes advantage of a corporate advantage through sustainability while still achieving the original profit goals targeted in the Centennial Strategy. 1 Introduction After many consecutive years of revenue growth across multiple divisions and product lines, Clorox is now faced with stagnant forecast projections and is in endanger of not achieving its goal of double-digit profit growth for its Centennial Strategy by 2013.

Problem Statement How should Clorox allocate its resources among its brands and products in order to achieve its Centennial Strategy targets while continuing to increase its sustainability efforts? Critical Issues Clorox is currently facing several issues. First, it needs to determine whether the “sustainability” trend is viable in the long term and if it offers ample opportunity for growth. Specifically, the company has to assess the potential of the “green” or “sustainable” market and the return on investment that can be achieved by penetrating this market.

The second issue facing Clorox is the disproportionate revenue generated by its product portfolio. While there is a significant push for a sustainability strategy, the three product lines in this category make up only 10% of the company’s revenue. The remaining 90% of revenue comes from Clorox’s large portfolio of cleaning and household products, many of which are in declining markets. To put this into perspective, in 2010 $4. 98 billion out of $5. 53 billion in sales occurred in declining markets, while growing markets accounted for only $0. 55 billion in sales (Barley, 2011).

If Clorox does not restructure its portfolio mix and increase revenue contribution from the growing markets, it faces the risk of losing sales and its position in those markets. Using its current resources, Clorox needs to determine how to allocate those resources among its current brand portfolio. Equally important is determining whether to invest in new product lines or brands. Clorox also has to decide whether to expand into international markets or focus strictly on expanding its market share across its brands in the primary U. S. market.

Asian, South American, and European markets offer potential for growth but the cost of expanding into these markets and the limited availability of financial resources pose concerns with respect to international expansion. Focus on growth versus profitability is another important strategic decision that needs to be addressed. Clorox projects flat sales for 2011, which is not a positive indicator for investors’ 2 interests and the company performance as a whole. Brands like Green Works have not turned profitable yet and are decreasing the bottom line. It is important that Clorox determine a balance between growth and profitability.

Since Clorox made the shift toward a socially responsible brand image it needs to sustain the momentum it created with its initial marketing efforts and continue to increase awareness among the public about its environmental, social and financial contributions. Lastly, Clorox must determine how the knowledge and expertise it gained through its “green” products will be shared throughout the entire organization. This needs to happen in order to use its corporate advantage in sustainability and involves determining which human resource strategies can be used to foster this advantage across its divisions.

External Analysis The future of the U. S. market for household cleaning products is changing and companies are trying to adapt to a growing change in consumer preferences and demands. The consumer is becoming increasingly interested in a greener and more sustainable lifestyles and products. In 2009, “green” cleaners generated $557 million in sales across the country and, by estimates, will generate approximately $2 billion in sales by 2014 (Market Wire, 2010). Another study reports that in 2010 42% of American adults have used a “green” household cleaning product during the year.

This translates into approximately 48 million households and $12 per household spent on green cleaning products (MyCompanyPR, 2011). The marketing challenge currently facing companies in the household cleaning industry is how to effectively communicate to consumers the benefits of “green” – efficacy, safety, ease of use and convenience – simultaneously. Yet, as market demand for such products continues to grow and consumers become more interested in green and sustainable lifestyles, the opportunity for companies to increase sales by targeting these segments will only increase.

Several factors affect the competitive landscape and the business decisions facing Clorox. From a macro-environmental perspective, trends in social norms and preferences must be considered. As discovered in the 2007 Cambridge Group Demand Landscape study, there has been a shift in consumer preference toward eco-friendly, sustainable products (Barley, 2011). Furthermore, consumers are much more likely to care about non-toxic ingredients, safer products, and the effectiveness of “sustainable” products. 3

Related to this social shift is a combination of political, technological, and environmental shifts that could impact the way Clorox operates. Carbon taxes, government regulation of product development and an increased awareness of carbon footprints may affect how Clorox produces, positions, and markets its products. Legal implications of claiming products as “green”, “natural”, or “sustainable” could come into play, as there are currently no requirements in place to refer to products as such (refer to Exhibit 1 for a full PESTEL analysis).

Finally, the economic landscape is a major concern for Clorox. The current recession will likely impact the company’s bottom line, as can be seen by a projection of flat sales for fiscal year 2011. In the absence of a stable or growing economy, Clorox needs to explore the potential of implementing alternative strategies to increase growth and profitability. Internal Analysis A complete SWOT analysis of Clorox (Exhibit 2) reveals that the Clorox brand poses a strategic advantage and weakness for its “green” product line.

While the Clorox brand name brings instant awareness and credibility of its cleaning products within Green Works, the brand hinders products like Burt’s Bees that strive for a non-harmful, natural image – something that the Clorox bleach product does not portray. This is a key consideration from a branding and positioning standpoint. Leveraging the Clorox brand name has an immediate and serious impact. Where it acts as a support to one product line, it acts as a deterrent to another. Another key concern for Clorox is how its resources should be divided among its product lines.

While the company’s three lines of “green” products (Brita, Burt’s Bees and Green Works) are a major component of its sales and marketing strategy, these products only represent 10% of total revenues. In order to support and continue its sustainability strategy, revenues for its green lines need to represent a much larger portion of its overall portfolio. Clorox faces risks of high commodity costs, and the industry it operates in is extremely competitive. Additionally, Clorox’s highly leveraged position gives it more risk than industry peers.

Due to its international presence there is also currency risk. Clorox has opportunities that it can leverage to increase its “green” product revenue. The company’s relationship with Wal-Mart, its brand affiliation with Sierra, the availability of new channels to reach consumers (ex. social media) and the growing market for green products can all positively impact the growth of this segment. 4 The strategic focus on sustainability needs to bleed into Clorox’s remaining 90% of revenue generating products.

As outlined by (Collis & Montgomery, 1988), an organization successfully leverages a corporate advantage by aligning its resources uniformly with its product lines. As such, Clorox needs to look at how its hub of resources will be aligned and distributed among its diversified product lines to ensure its sustainability strategy is leveraged as a corporate advantage across the organization. Decision Criteria The recommendation should address the following key decision criteria: 1. Environmental sustainability (“green”) for the next 3 to 5 years 2.

Profitability for Clorox 3. Growth potential for Clorox 4. Increase in Clorox brand equity 5. Framework for learning and knowledge transfer across the organization 6. Use of existing resources (keep incremental costs to a minimum) The justification for these decision criteria is outlined in Exhibit 3. Alternatives The objectives and goals for Clorox must be considered when proposing alternatives. At the forefront of these goals is the Centennial Strategy plan for revenue. In addition, brand equity and growth opportunities are factors to consider.

Option 1 – Expand into Emerging Markets with Current Product Mix Open up new markets for existing product lines, especially in areas with high growth and demand for the current product mix. Pros Take advantage of thriving markets with demand for green products Utilization of Clorox’s already existing infrastructure in Latin America Strong competition from Asian manufacturers with low operation costs Cons Does not address the disproportionate revenue in company’s product mix Added cost through new and unproven distribution and marketing mix Further exposure to currency changes Option 2 – Acquire Other Value Brands to Expand Market Share Acquire companies of other value brands in markets where Clorox does not have a presence. For example, in the case of Bert’s Bees, Clorox can buy companies that cater to the needs of consumers other than “Committed Naturalists” and “Health and Beauty Sleuths. ” This market is approximately 78% of the total natural product market. If priced right, this acquisition option would allow Clorox to expand to untapped markets with significantly less cost.

Pros Increased product line and opportunities in new market segments Proven success in untapped market segments by Clorox Increased market share Cons Lack of synergy through addition Risk of investment and impact on profits Additional impact on margins due to cost of borrowing for an entity already too leveraged Option 3 – Concentrate on Growth and Profitability of existing product line with introduction of “Clorox Clarity” knowledge sharing program Focus on a mix of profitability or growth enhancements with current green brands while spending effort on launching “Clorox Clarity” initiative.

Pros Improved bottom line Enhances rand equity with increased emphasis on corporate responsibility Utilizing existing resources such as established distribution and marketing channels Investment in line with long-term strategies of going green Minimal investment and exposure in a highly volatile financial environment Modest growth where potentials exist See Exhibit 5 for Decision

Criteria Matrix Recommendation Following a careful analysis of possible alternatives, the financial impact of such options and Clorox’s objectives, the following recommendation should be implemented: Clorox should focus on growth and profitability for Burt’s Bees, growth for Brita and profitability for Green Works by changing product price and positioning, increasing 6 Cons Foregone potentials of new product lines and new markets Modifying proven model for corporate success which may not yield to expected results arketing efforts, driving awareness and adoption, and capturing additional market share. This adjustment in strategy includes an immediate, short-term increase in marketing and advertising spend to create awareness and educate consumers about green sustainability in the Clorox products. An investment of approximately $18 million in each of the next two years will help solidify a leadership position in the domestic market for Clorox’s three green product divisions (Brita, Burt’s Bees, and Green Works).

In addition, the company needs to implement “Clorox Clarity” – an internal knowledge transfer and sharing program that ensures that best practices for going green are used throughout all Clorox brands and divisional product lines. Implementation Overview and Timing Green Works To achieve profitability in the 3 to 5 year time horizon, marketing and promotional efforts to increase awareness and product adoption need to be increased significantly. As such, the full $15 million advertising budget should be allocated to market Green Works’ products and gain market share.

Additionally, the “Clorox” logo should be removed from all packaging of Green Works products as there is a negative association of the Clorox brand with harmful bleaching chemicals. In place of the Clorox logo, the Sierra Club logo should be leveraged as it will enhance the environmentally friendly nature of the product. Lastly, research shows that TV programming concerning environmental issues accounts for 58% of first time eco-friendly household product purchases. As a result, Clorox should invest in television advertising that runs during these programs to increase awareness of Green Works products.

Once the product has been established in the marketplace, additional access to consumers through Facebook and other social media distribution networks can be used to reach consumers. Marketing to consumers through Target and Wal-Mart will also help increase product adoption. Burt’s Bees Clorox should focus on growth and profitability by expanding its target market through a lower price point while still maintaining its premium status. This strategy will target “Beauty Enthusiasts” and “Demanding Conventionalists” who represent access to 39% more female consumers and an additional 54% of NPC market sales.

Current barriers to accessing this group are pricing and lack of product knowledge. By lowering its price to an optimal level and 7 repositioning the existing product lines to appeal to this secondary market, Burt’s Bees products open the possibility to almost double sales. The repositioning strategy should include providing more samples to new target consumers, packaging that will highlight the products ingredients, and fragrances sought by the target market. This will result in an increased market share and sales volume that can offset any potential loss from existing primary customer segments leaving.

For the medium term, Burt Bees should focus on increasing penetration in its existing global markets, and in the long term, explore expanding into new and growing emerging markets such as China and India via a line of organic products. Brita Given Brita’s high profit margins, Clorox needs to increase the sales within the product line and focus on growth. Brita’s products currently compete in only 12% of the $2 billion water filtration market, which represents a fractional $240 million. Penetration into other sub-segments of the water filtration market offers significant opportunity for growth.

Given the size of the faucet based filtration market for households, Brita must leverage its established brand image and focus on expanding within this segment. In the short term (1 year), Brita should invest in marketing the faucet based filtration system by targeting individual households and emphasizing the superior taste of Brita processed water and its affordability. In the medium term (3 years), Brita needs to invest in R&D of other products and expand its product line to an on-the-go water filtration system.

In the long term (5 years), Brita needs to take advantage of the growing demand by schools other public institutions that are going bottle-free and the growing demographic looking for alternatives to bottled water. Clorox Clarity Set up an ambidextrous structure with eco-office leading the research and innovation in green eco-friendly products in addition to overseeing the Clorox Clarity program. Clorox Clarity is an initiative to create a corporate wide knowledge centre for transfer of green and sustainability know-how from leading eco-friendly brands inside the Clorox family to the primary product group.

Gradually assimilate the non-green products under the green banner. Each of the three sustainable brands will designate Subject Matter Experts (SMEs) to transfer the green best practices to the knowledge centre and consult the managers from the primary product team on developing viable plans for improvement of sustainability indicators in the respective product line. In addition to an intranet being set up to facilitate file sharing and information transfer, bi- 8 weekly meetings will be conducted by the SMEs and non-green product managers and marketing managers to share this information and expertise.

This information will include but will not be limited to: best practices, case examples, marketing messaging, planning, product development and pricing strategy. (See Exhibit 8 for a full timeline implementation plan for these activities. ) Financial Analysis Following a careful evaluation of Clorox’s financial goals, which include double-digit economic profit growth and annual sales growth of 3% to 5% by 2013, the following estimates have been derived given the company’s three to five year strategy, marketing, research and development objectives and overall CPG industry and U. S. economic outlook.

Sales Growth Projected Using Centennial Strategy Annual Targets Given the current state of the U. S. economy and its forecasted real GDP (see Exhibit 9), a conservative approach was taken with respect to sales projection and calculated using the lower limit of the Centennial Strategy annual target of 3% to 5%. This model does not allow Clorox to achieve the Centennial goal of double-digit profit growth by 2013. (See Exhibit 6 for Clorox Income Statement (3% Sales Growth)). Sales Growth Projected Using Historical Figures To achieve the Centennial Strategic goal of double-digit profit rowth by 2013, the following model needs to be used. With some key assumptions regarding revenue, advertising spending and research and development costs (see Exhibit 4), this model achieves the goal of 10% profit growth in 2013. Clorox projected flat sales for its fiscal year ended June 30, 2011. As a result, sales and all associated elements remained the same in 2010 and 2011. In 2012 and beyond, both models assume costs of goods sold are proportionate to the increases in sales and interest expense declines at a rate of 1. 95%, which is the average rate for years 2008 to 2010. Other expense (income) remains constant and income taxes are calculated using a 34% tax rate. An increase in revenue of $249 million and $260 million for years 2012 and 2013, respectively, accounts for this growth. Given the implementation plan for the three green products, it is reasonable to assume that these targets can be met. Specifically, the recommendation opens Burt’s Bees products to double the market spend and more than double its current audience.

Assuming sales increase in proportion to the market segments, almost 9 doubling sales for Burt’s Bees products alone could help attain this goal ($221 million in 2010). Additional revenue from Brita and Green Works almost guarantees the goal to be met by 2013. Risks and Contingencies Burt’s Bees Risks 1. Loss of market share in existing target market segments (committed naturalists and health and beauty sleuths) due to repositioning of the brand towards new target markets 2. Lack of adoption by newly targeted market segments (beauty enthusiasts and demanding conventionalists) 3.

Lowering the price might dilute the current brand image Contingencies 1. Loss of market share in current segments which only accounts for 810% of the targeted market will be mitigated by gains in the newly targeted segments which represent 39% of targeted market 2. Create a new product line specifically designed and developed for the two new segments 3. Adjust the brand image to price sensitive segments which represent 39% of market Brita Risks 1. Saturation in faucet mount filtration market segment does not allow for increased market share and significant sales growth 2.

Lack of focus on the pitcher product leads to a decrease in market share in the market segment where Brita currently dominates 3. Forgone first mover advantage in new markets for bottle free water products in institutions and on the go water systems Contingencies 1. Switch focus to other segments such as on the go water systems or water house filtration 2. Market share will not drop quickly and necessary adjustments will be made to ensure dominant market share remains 3. Leverage existing Brita brand into new markets and focus on improving cost structure by being second mover 0 Green Works Risks 1. Marketing effort focused on efficacy is not effective at convincing consumer that the product works 2. Changing the Clorox label to Sierra does not increase consumer association with safety of product use 3. P&G and Unilever crash Clorox’s advertising campaigns with their large budgets and established distribution systems Contingencies 1. Start a promotional campaign in retail chains and give away samples to prove that the product works 2. Integrate emphases on Sierra brand into marketing campaigns and educate the consumer about Sierra’s reputation 3.

Create in store promotional methods and money back guarantees that entice new consumers to try the products and create buzz about Green Works Conclusion In light of the economic downturn and stagnant revenue growth projections for 2011, it would be easy to justify abandoning the Centennial growth strategy and sustainability initiatives. However, consumer preferences and growth trends have not changed. This supports a commitment to Clorox’s strategy for growth and profitability and proves green sustainability is a trend, not a fad.

A tweak to strategy and a small increase in short-term advertising will allow the three green product divisions to gain more market share, much like the results seen when advertising of these products first launched. The launch of the Clorox Clarity program to share knowledge and foster innovation of sustainability across the entire organization combined with continued research and development in the medium term and market expansion in the long-term will ensure Clorox attains double-digit profit growth by 2013 and secures a market leadership position in green sustainability for the future. 1 Bibliography Clorox. (n. d. ). Eco Governance. Retrieved 3, 2012 from Clorox Company website: http://www. thecloroxcompany. com/corporate-responsibility/planet/eco-goals/ Collis & Montgomery. (1988). Creating Corporate Advantage. Harvard Business Review. Green Household Cleaners to Double U. S. Market Share 2014 Says News Report. Retrieved March 3, 2012, from My Company PR: http://www. mycompanypr. com/green-householdcleaners-to-double-u-s-market-share-2014-says-new-report/pr/516/ The Clorox Company. 2010 Annual Report to Shareholders and Employees.

Retrieved March 3, 2012 from Clorox Company website: http://www. thecloroxcompany. com/downloads/annual-reports/ar10_complete. pdf The World Bank (n. d. ). The global outlook in summary, 2009-2013. Retrieved March 3, 2012 from The World Bank website: http://web. worldbank. org/external/default/main? theSitePK=659149&pagePK=2470434&c ontentMDK=20370107&menuPK=659160&piPK=2470429 U. S. Market for Green Household Cleaning Products Enters Forefront of Consumer Consciousness With Shift Toward More Eco-Friendly and Sustainable Lifestyles.

Retrieved March 3, 2012, from Market Wire: http://www. marketwire. com/press-release/us-marketgreen-household-cleaning-products-enters-forefront-consumer-consciousness1265177. html 12 Appendix: Exhibit 1: PESTEL Analysis Political Economic Social Technological Environmental Legal Carbon taxes Recession impact on consumer behavior, demands, necessities Health conscious population (ie: hand sanitizers) Increased product innovation Increased demand for environmentally friendly products Regulatory standards for natural products claims

Environme ntal preservatio n tax Cost of living & availability of disposable income More focus on CSR and relief efforts (ie: carbon footprints, Katrina ) Decreased product costs Carbon footprint awareness HR legal implication of mergers Exhibit 2: SWOT Analysis Strengths •Established brand name •Product breadth •Management •Distribution Network •Growth markets Weaknesses • Negative brand connotation with “green” • 90% of revenue in declining markets • Green Works not profitable • Limited resources for funding • Limited presence in “green” market Opportunities “Green” is a growing trend •Partnership with Sierra •Wal-Mart distribution •International markets •Diversified reach to consumers Threats •P&G and Unilever •Economic uncertainty •New competitors •Uncertain projections of “green” trend Exhibit 3: Decision Criteria Rationale Considering the market trend toward Eco-friendly/sustainable products and the company Environmentally mission of becoming Eco-Leader in consumer market place, the plan should reflect the Sustainable overall direction and milestones on the path to achieving sustainability improvement in (“green”) 25% of products by 2013 (Clorox, 2011).

Profitable Provide Growth Potential Positive Brand Equity Provide framework for learning/ knowledge transfer Leverage existing resources (keep low costs) Satisfy 2013 goal and remain profitable onward. Demonstrate how each component of the plan contributes to 2013 profitability and double-digit margin there on. Strategy should look for, consider and increase opportunities for growth targeting 3% to 5% year over year.

Enhance Clorox family brand equity by selecting socially respected partners and focusing on quality products that work in order to improve brand awareness, loyalty, perceived quality and association. As the long-term strategy of the company is to march toward greener, more environment friendly products we need a strategy to capitalize on the Green know-how and develop a mechanism to transfer the knowledge across primary brands. Utilization of Clorox existing corporate manufacturing and marketing resources is important to reduce both cost and carbon foot-print. 13

Exhibit 4: Financial Assumptions Financial Assumptions: $15M budget for greenworks Year 3 and 5 – increase in R&D Assumed growth rate is lowest target range increase prop to sales assumes ad increase is proportional across green brands (0. 0075% of sales) – taken from 15million for GW as percent of 2billion sales assumes $2 and 3million RnD costs in 2012 and 2014 for Brita and Green Works, respectively (as per timeline plan) implement in 2011/2012 restructuring costs (learning and knowledge transfer program, eco office) assume interest expenses decline at an average rate of 1. 95% (average of last three years) other expenses remain constant assume tax rate stays constant at 34% Exhibit 5: Decision Criteria Analyzed Long Term Sustainability 1. Expand into Emerging Markets 2. Acquisition/New Product Lines 3. Existing w/ Clorox Clarity Profitable Growth Potential Brand Equity Green shared learning Low costs Total 3 2 5 Exhibit 6: Projected Growth at 3% Sales Growth

Projected Growth – Clorox Income Statement (3% Sales Growth) Years ended June 30 Dollars in millions, except per share amounts Net sales Costs Gross profit Selling and administrative expenses Advertising costs Research and development costs Restructuring and asset impairment costs Interest expense Other expense (income), net Earnings before income taxes Income taxes Net earnings Y5 2015 6,229 3,441 2,788 841 515 118 0 133 25 1,156 393 763 Y4 2014 6,047 3,340 2,707 816 525 118 0 134 25 1,088 370 718 Y3 2013 5,871 3,243 2,628 792 536 115 2 136 25 1,021 347 674 Y2 2012 5,700 3,149 2,551 769 536 121 4 137 25 958 326 633 Y1 2011 5,534 3,057 2,477 747 518 119 4 139 25 925 322 603 2010 5,534 3,057 2,447 747 518 119 4 139 25 925 322 603 14 Exhibit 7: Historical Growth Projection Historical Projection – Clorox Income Statement (4. % Sales Growth) Years ended June 30 Dollars in millions, except per share amounts Net sales Costs Gross profit Selling and administrative expenses Advertising costs Research and development costs Restructuring and asset impairment costs Interest expense Other expense (income), net Earnings before income taxes Income taxes Net earnings Y5 2015 6,599 3,646 2,954 891 515 118 0 133 25 1,272 432 840 Y4 2014 6,315 3,489 2,827 852 525 118 0 134 25 1,172 398 773 Y3 2013 6,043 3,338 2,705 816 536 115 2 136 25 1,075 366 710 Y2 2012 5,783 3,195 2,588 781 536 121 7 137 25 981 334 648 Y1 2011 5,534 3,057 2,477 747 518 119 4 139 25 925 322 603 2010 5,534 3,057 2,447 747 518 119 4 139 25 925 322 603 Exhibit 8: Timeline for Implementation Timeline for Implementaiton PLANNING Year 1 – 2011 Q3 EXECUTION Year 2 – 2012 Q3 Year 3 – 2013 Q3 Year 4 – 2014 Q3 Year 5 – 2015 Q3

Q1 Green Works Competitive marketing Increase availability through Target and Wal-Mart Sierra packaging change TV advertising Facebook promotions R&D (new products) Expand product lines Enter new markets Brita Market to households (faucets) R&D – product innovation Enter colleges and universities Burt’s Bees Lower price Reposition to new segments Repackage In-store sampling New fragrances Expand exisiting global markets Enter new markets Clorox Clarity Identify Green Product SMEs Assign Green Products to Eco Office (for resource allocation) Create Intranet for file sharing Schedule bi-weekly meetings Eco Office manages program Management rotation duties Q2 Q4 Q1 Q2 Q4 Q1 Q2 Q4 Q1 Q2 Q4

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Clorox Case Analysis. (2016, Nov 22). Retrieved from https://graduateway.com/clorox-case-analysis/

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