Kimberly-Clark corporation manufactures consumer goods and participates in the highly competitive household good and personal care products categories. In addition, the company has a strong paper business (and owns a considerable amount of timber) which it uses to supply its own needs as well as sell to other companies. This research considers the company's recent performance, and offers insights as to the future direction of the organization.
Over the past ten years, revenues increased at a strong 8.5 percent annually, but that figure fell to five percent for the last five years. Earnings outpaced revenues during both those periods, advancing 11 percent over the past ten years, and 5.5 percent annually over the past five years (Gerstein, 1996, p. 942). In December 1995, Kimberly-Clark merged with one of its major competitors, Scott Paper, which became Kimberly-Clark Tissue. This gave the new company increased market share, but also brought with it consolidation and economies of scale that would not have been possible otherwise. The company continues to compete against the much larger Procter & Gamble, but the merger should give it greater resources to compete effectively.
Kimberly-Clark Corporation produces items in three business segments: personal care products (Class I), tissue-based products (Class II) and newsprint, paper and other products (Class III) (Jaffe, 1996, p. 1298). Class I products include disposable diapers, training and youth pants; feminine and adult incontinence care products; wet wipes, health care products; and related items. The company has strong brand name recognition in this business segment, including Huggies, Pull-Ups, Kotex and Depend. Personal care products accounted for 80 percent of the company's sales and 76 percent of the company's profits in 1994 (Jaffe, 1996, p. 1298).
Class II products include facial and bathroom tissue, paper towels and wipes for household use and related produc...