This paper provides an overview of Kimberly-Clark's competitive position across its four operating segments — personal care, consumer tissue, professional, and health care. It examines the structure of the industries in which K-C competes, including the nature of monopolistic competition and key rivals such as Procter & Gamble and Georgia-Pacific. The paper also addresses major industry trends, including retailer dependence and emerging market growth, reviews K-C's historical background and sales breakdown, and evaluates the company's recent financial performance. Finally, it discusses the role and findings of Deloitte & Touche as the company's independent auditor.
Kimberly-Clark operates in four different industries — personal care, consumer tissue, professional, and health care. Each of these industries is similar in that they are oriented toward multinational competition, with firms operating under monopolistic competition and occasionally facing oligopoly conditions. The company's supply chain, production, and distribution are therefore global in nature.
In general, Kimberly-Clark is one of the leading firms in its industries. K-C competes against firms such as Georgia-Pacific, Procter & Gamble, and Energizer Holdings in some of its segments. In most industries, there are only two or three major competitors. The industries in which Kimberly-Clark competes are mature industries, characterized by strong competition among a limited number of players. Private labels are increasingly a significant form of competition.
K-C relies on distribution, brand-building, and product differentiation through marketing in order to build and maintain market share, and these are the key success drivers for other firms in its industries as well. These industries in general are subject to slow growth, as they are consumer staples. In recent years, demand has declined slightly as a result of the economic downturn, but in general demand tracks economic and population growth in the company's mature markets. Only in rapidly growing emerging markets are there significant prospects for growth.
The industry relies on major retailers for a significant portion of its sales. For example, Kimberly-Clark derives between 13–14% of its sales from Walmart (Kimberly-Clark 2009 Annual Report). Firms in the industry are also dependent on the cost of raw materials such as cellulose fiber and synthetic absorbents, and can be subject to adverse price movements in these commodities.
The trend toward increasing dependence on major retailers and the trend toward the need for international markets for growth are the two most important trends in the industry. As private labels gain shelf space and large retailers consolidate their purchasing power, manufacturers such as K-C face ongoing pressure on margins and negotiating leverage.
Kimberly-Clark began in the 19th century and experienced strong growth in the 1920s when it entered into a deal with the New York Times to build a pulp mill in northern Ontario. K-C now covers a broad range of international markets, with 53% of sales coming from the United States, almost 17% from Europe, and 35% from other countries.
The company's sales are split primarily among personal care (44%), consumer tissue (33.5%), and professional (15.7%) segments. This diversified revenue mix provides some insulation against downturns in any single product category, while the substantial share of international sales reflects K-C's global operational footprint.
"Earnings stability and leverage position"
"Deloitte findings on internal financial controls"
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