MKT 341
Rohan & Khalid Clorox Case Study 5th Nov 2018
1. Upon reading the case, it is clear that there are 3 reasons why GreenWorks succeeded beyond
expectations. (i) Clorox raised Accessibility of Green Cleaning products in the market. Unlike smaller
competitors in the market, such as Seventh Generation, Clorox had built business relationships with large
retail distributors - including WalMart and Costco- through which the company had been able to earn
access to a shelf space and sell GreenWorks products. (ii) Clorox created not only Awareness, but also
Acceptability for Green Cleaners. Before GreenWorks entered the market, consumers were wary of
Green-Cleaning products, deeming them inferior and overpriced in comparison to trusted generalist
brands.The market was catered to more educated individuals, willing to pay a premium for sustainable
products. Clorox went beyond this demographic to create a universal need for Green-cleaners, increasing
awareness even for isolated consumers. With the trusted Clorox brand name, they targeted customers who
frequently bought Clorox products, but not Green products from smaller brands. (iii) Affordability was
also key to their success, as Clorox priced GreenWorks products significantly lower than competitors,
however, 10-20% higher than traditional cleaners to show that Green products are actually superior. This
catered not only to price-conscious consumers who were already buying Green products, but also to an
untapped market of consumers who saw Green-products as overpriced and inferior to traditional cleaners.
2. Clorox should continue to build out its GreenWorks product line for the following reasons: (i) The
market has grown a lot since Clorox’s entry. Although GreenWorks managed to capture 40% of the
market for Green cleaning products in 2009, smaller competitors did not lose their market share. This
indicates that the total pie or market size for Green cleaning products was expanding simultaneously.
Since the overall market size for Green cleaning products is forecasted to grow in the coming years
(exhibit 10), it would be a strategic mistake for Clorox to abandon its GreenWorks product line. However,
one of the ways GreenWorks expanded its market share was by decreasing price. This has a potential to
backfire, as other companies can also reduce their price, which could lead to price competition. (ii)
Another reason why Clorox should continue to build out its GreenWorks product line is because there is a
MKT 341
Rohan & Khalid Clorox Case Study 5th Nov 2018
huge opportunity for growth internationally, as there are studies showing that many countries in Europe
and Asia, there is a demand of Green Cleaners.1 GreenWorks can use its existing infrastructure to
dominate markets that are potentially more profitable than the US and gain a significant share of within
the global personal and household products industry. However, before it expands to new markets, we
recommend that GreenWorks should solidify its brand in the US, as a bad first impression in foreign
markets can prove to be disastrous. (iii) Thirdly, Clorox should strengthen relationships with big channels
such as Walmart, that constitute about 30% of its sales and gives it access to broader markets. However,
they should be careful not to completely depend on Walmart for sales, as the company can potentially
terminate its contract or use its power as leverage to ask for lower price.
3. A First-Mover’s advantage in any new market, is usually when the first entrant gains a significant
competitive advantage due to control over certain resources in that market.2 However, when a first entrant
is not able to capitalise on this advantage, they are often left vulnerable to “Second-Movers”, who
compete more efficiently and gain an edge over the first entrant.
With the Rule of Three3 in mind, Clorox is one of the 3 generalists in the traditional cleaners market. By
being the first full-line generalist to enter the market for Green cleaning products, Clorox was able to
utilize a First-Mover’s advantage in various segments. For example, the case shows evidence that
consumers were not quite satisfied with niche Green Cleaners, and would rather buy trusted brands that
were affordable. However, being a full line generalist to serve various markets as a first mover can be
risky as Clorox would be required to increase spending on R&D. In that case, the best way to alleviate
this risk is by becoming an excellent second mover.
Despite not being the first entrant, Clorox does have a First-Mover’s advantage in non-traditional product
categories due to its superiority as a generalist, with the ability to increase accessibility and affordability
of non-traditional products beyond their niche strategies.
1
Global Industry Analysts, Inc. www.strategyr.com/Household_Green_Cleaning_Products_Market_Report.asp
2
Grant, Robert M. (2003). Cases in Contemporary strategy analysis.
3
Sheth, Jagdish. (2002). Competitive Markets and the Rule of Three. Ivey Business Journal.
