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Clorox Company Goes Green, The:

by Andrew Hoffman

Description: In early 2008, Clorox released a new line of environmentally friendly cleaning products called GreenWorks. The product line was the first new brand released by Clorox in 20 years. 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. Unlike the smaller firms, Clorox commanded shelf space at big-box stores such as Wal-Mart, Target, and Costco. 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. This result left Clorox with several strategic questions.

Teaching Points: After discussing this case study, students will be able to:
analyze the strategies Clorox employed to develop and market this product,
analyze Why Clorox chose to develop a new brand instead of acquiring an existing brand or Extending existing Clorox household cleaner product lines,
compare Clorox’s pricing strategy against those employed by competitors,
discuss whether the partnership with the Sierra Club is essential for any additional products or new product lines,
determine whether Clorox leverage the success of GreenWorks in other areas

Key Topics:
• Consumer Products
• Environmental Sustainability
• Innovation
• Strategic Management

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