If anyone’s parents are like my mom, growing up our clothes would come out of the wash with spots of Clorox bleach. The Clorox Company is a leading American global manufacturer and marketer of consumer and professional products. Although best known for its liquid bleach and other cleaners, The Clorox Company is a multinational manufacturer that brands a diverse variety of well-known household products ranging from cleaning items to salad dressings (Hidden Valley) to personal care items (Burt’s Bees) to charcoal (Kingsford) to cat litter (Fresh Step). Clorox makes and sells its products worldwide. Its products are sold primarily through mass retailers, like grocery outlets, warehouse clubs, dollar stores, hardware centers, and e-commerce channels.
The Clorox Company was founded in 1913 in Oakland, California by a handful of men who each invested $100 to make liquid bleach by using water from the San Francisco Bay’s salt ponds. Its best-seller did not start off as a household product, however. Up until around 1916, the company’s bleach was packaged in five-gallon returnable containers that had to be delivered by horse-drawn wagons! Since going public in 1928, Clorox has gone through numerous acquisitions, splits, product launches, and divestitures. In its beginning stages, Clorox found it difficult to stand apart in its industry and from its competitors. In 1957, household product conglomerate Procter and Gamble (P&G) bought Clorox; but in just over a decade later, P&G divested the company and Clorox went back to being an independent, one-product firm. After its split with P&G, Clorox began venturing into other household consumer goods as well as specialty food products.
Clorox began committing a notable amount of money and administrative support into research and development to find a niche of its own. It also relied upon acquisitions to broaden its product line. By 2000, The Clorox Company added 115 new products to its portfolio. Now, the company organizes its operations into four segments: Household, Health and Wellness, Lifestyle, and International. The company has stayed close to its roots and is headquartered in Oakland, California. Its various manufacturing, distribution, office, and R&D facilities operate in Pleasanton, California. Through many ups-and-downs, Clorox has made itself into a formidable household name, with 2022 net sales of $7.1 billion and about 9,000 employees worldwide as of June 30, 2022.
From its 10-K filing, The Clorox Company states it “operates through strategic business units (SBUs) that are also the Company’s operating segments. These SBUs are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International.”
The Health and Wellness segment consists of cleaning products, home care products, professional cleaning products, vitamins, minerals, and supplements. Clorox and CloroxPro are the two main brands under this segment. The Household department houses the brands Glad, Kingsford, and Fresh Step. Items found under the Household unit are storage items like bags and wraps, grilling products, and cat litter. The Lifestyle segment consists of food (mostly seasonings, dips, sauces, and dressings), natural personal care products and water-filtration products. Brands under this department are Hidden Valley, Burt’s Bees, and Brita. All three of these segments are mainly marketed and sold in the U.S. The last segment – International – consists of products sold outside the U.S. International products and brands are like the ones marketed and sold in the U.S.; they include laundry additives, home and natural personal care products, water-filtration products, health products, charcoal, cat litter, food, storage items, and professional cleaning products. The Clorox Company’s 10-K filing suggests that it is a largely decentralized organization. Because it has split its operations into four segments, the company most likely also disperses decision-making authority among multiple employees, departmental teams, and managers.
One of the threats listed in The Clorox Company’s D&B Hoovers’s SWOT analysis is “Intense Competition”. Because Clorox is a large, mass merchandiser in a highly competitive market, it most likely uses market-based pricing. It establishes its prices on what it thinks its consumers are willing to pay. Additionally, the analysis states, “Clorox operates in a highly competitive household cleaning and personal care industry. The factors that determine the level of competition within the industry include product performance, brand image and recognition, advertising and promotional capabilities, quality, distributions capabilities and price.” Price acting as one of the determining factors of competition also supports my theory that Clorox uses market-based pricing. The company must keep close tabs on what prices are appropriate for the industry and its consumers. Under the “Company Description”, D&B Hoovers references Clorox’s strategy. It states, “Clorox’s IGNITE strategy accelerates innovation in key areas to drive growth and deliver value for both the company’s shareholders and society. Specifically, IGNITE focuses on four strategic choices to sustain long-term, profitable growth: Fuel Growth, Innovate Experiences, Reimagine Work and Evolve Portfolio.” This strategy takes a productive, assertive approach that would cause The Clorox Company to lean into price setting, or market-based pricing.