The Clorox Company Goes Green SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Clorox Company Goes Green

Finalist and 3rd Place winner in the 2011 Oikos Casewriting Competition. In early 2008, Clorox released a new line of environmentally friendly cleaning products called GreenWorks. Following the success of smaller firms such as Seventh Generation and Method, Clorox targeted the niche market of green products, with an estimated market size of $150 million. Using its competitive advantages in distribution and economies of scale, Clorox priced its GreenWorks products below those of smaller competitors. Surprisingly, Clorox's market entry did not steal revenue from smaller players, but instead caused the market for green cleaning products to explode, leaving Clorox with several strategic questions.

Authors :: Andrew Hoffman

Topics :: Strategy & Execution

Tags :: Public relations, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Clorox Company Goes Green" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Clorox Greenworks facing as an external strategic factors. Some of the topics covered in The Clorox Company Goes Green case study are - Strategic Management Strategies, Public relations, Social responsibility and Strategy & Execution.

Some of the macro environment factors that can be used to understand the The Clorox Company Goes Green casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, wage bills are increasing, etc

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Introduction to SWOT Analysis of The Clorox Company Goes Green

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Clorox Company Goes Green case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clorox Greenworks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clorox Greenworks operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of The Clorox Company Goes Green can be done for the following purposes –
1. Strategic planning using facts provided in The Clorox Company Goes Green case study
2. Improving business portfolio management of Clorox Greenworks
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Clorox Greenworks

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Strengths The Clorox Company Goes Green | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Clorox Greenworks in The Clorox Company Goes Green Harvard Business Review case study are -

Diverse revenue streams

– Clorox Greenworks is present in almost all the verticals within the industry. This has provided firm in The Clorox Company Goes Green case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Ability to lead change in Strategy & Execution field

– Clorox Greenworks is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Clorox Greenworks in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

- Clorox Greenworks is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Clorox Greenworks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Clorox Company Goes Green Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– Clorox Greenworks has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Clorox Company Goes Green HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Cross disciplinary teams

– Horizontal connected teams at the Clorox Greenworks are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Effective Research and Development (R&D)

– Clorox Greenworks has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study The Clorox Company Goes Green - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Analytics focus

– Clorox Greenworks is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Andrew Hoffman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Strong track record of project management

– Clorox Greenworks is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Low bargaining power of suppliers

– Suppliers of Clorox Greenworks in the sector have low bargaining power. The Clorox Company Goes Green has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Clorox Greenworks to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Strategy & Execution segment

- digital transformation varies from industry to industry. For Clorox Greenworks digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Clorox Greenworks has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

High switching costs

– The high switching costs that Clorox Greenworks has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Organizational Resilience of Clorox Greenworks

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Clorox Greenworks does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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Weaknesses The Clorox Company Goes Green | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Clorox Company Goes Green are -

Capital Spending Reduction

– Even during the low interest decade, Clorox Greenworks has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

High cash cycle compare to competitors

Clorox Greenworks has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, Clorox Greenworks has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Clorox Greenworks even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Aligning sales with marketing

– It come across in the case study The Clorox Company Goes Green that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The Clorox Company Goes Green can leverage the sales team experience to cultivate customer relationships as Clorox Greenworks is planning to shift buying processes online.

Increasing silos among functional specialists

– The organizational structure of Clorox Greenworks is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Clorox Greenworks needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Clorox Greenworks to focus more on services rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the segment, Clorox Greenworks needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study The Clorox Company Goes Green, is just above the industry average. Clorox Greenworks needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the The Clorox Company Goes Green HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Clorox Greenworks has relatively successful track record of launching new products.

Lack of clear differentiation of Clorox Greenworks products

– To increase the profitability and margins on the products, Clorox Greenworks needs to provide more differentiated products than what it is currently offering in the marketplace.

Interest costs

– Compare to the competition, Clorox Greenworks has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

High bargaining power of channel partners

– Because of the regulatory requirements, Andrew Hoffman suggests that, Clorox Greenworks is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

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Opportunities The Clorox Company Goes Green | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities highlighted in the Harvard Business Review case study The Clorox Company Goes Green are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Clorox Greenworks can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Using analytics as competitive advantage

– Clorox Greenworks has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Clorox Company Goes Green - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Clorox Greenworks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Clorox Greenworks can use these opportunities to build new business models that can help the communities that Clorox Greenworks operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Clorox Greenworks to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Clorox Greenworks to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Clorox Greenworks is facing challenges because of the dominance of functional experts in the organization. The Clorox Company Goes Green case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Clorox Greenworks can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Clorox Greenworks can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Clorox Greenworks can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Better consumer reach

– The expansion of the 5G network will help Clorox Greenworks to increase its market reach. Clorox Greenworks will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Clorox Greenworks can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Clorox Greenworks to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Creating value in data economy

– The success of analytics program of Clorox Greenworks has opened avenues for new revenue streams for the organization in the industry. This can help Clorox Greenworks to build a more holistic ecosystem as suggested in the The Clorox Company Goes Green case study. Clorox Greenworks can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Clorox Greenworks to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Leveraging digital technologies

– Clorox Greenworks can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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Threats The Clorox Company Goes Green External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The Clorox Company Goes Green are -

High dependence on third party suppliers

– Clorox Greenworks high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Clorox Greenworks can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Clorox Company Goes Green .

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Clorox Greenworks will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Environmental challenges

– Clorox Greenworks needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Clorox Greenworks can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.

Increasing wage structure of Clorox Greenworks

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Clorox Greenworks.

Shortening product life cycle

– it is one of the major threat that Clorox Greenworks is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Clorox Greenworks.

Easy access to finance

– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Clorox Greenworks can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Clorox Company Goes Green, Clorox Greenworks may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Technology acceleration in Forth Industrial Revolution

– Clorox Greenworks has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Clorox Greenworks needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Stagnating economy with rate increase

– Clorox Greenworks can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Clorox Greenworks in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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Weighted SWOT Analysis of The Clorox Company Goes Green Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Clorox Company Goes Green needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study The Clorox Company Goes Green is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study The Clorox Company Goes Green is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of The Clorox Company Goes Green is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Clorox Greenworks needs to make to build a sustainable competitive advantage.

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