The Diaper case Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

The Diaper Case Study Analysis

Legal Factors:

There are numerous factors that could affect the company’s performance eitherpositivelyor negatively. The disposal solid waste act 1976 restricts the companies to use non-biodegradable plastics in their diapers, due to which the cost of the company’s diapers would increase. Most of the players in the diapers industry import machinery, which requires high cost and taxes. Furthermore, various groups put pressure on the industry to use environmental friendly techniques and equipment, which also impose restrictions and oblige the companies to use ecofriendly practices, otherwise the companycould be faced with harsh criticism and several legal notices.

Reactive and Anticipatory Change

Reactivechange refers toa change that a company adopts after a certain event has occurred. Certain events may include some sort of threats and opportunities that the company should be ever ready to face, because these events may last impact on the performance of a company as well as on its sales revenue.(Kotler & Armstrong, 2008).

P&G adopted technological advancement later and also accepted the quality advancement technique when other countries were already using that, which is why P&G was facing some declining trends in its sales as compared to Kimbie's and Huggies.

Kimbies and Clark analyzed the potential in the market regarding the acceptance of the sanitized products then they started focusing on making the fluff pulp product so that the tissue could get attracted towards using more sanitized product.

Anticipatory changes refer to the changes that a management must implement after planning a change strategy. It is a planned change that could be implemented for the betterment of any company. P&G tried to implement the change by reducing the cost of manufacturing diapers for the purpose of making its products attractive to the customers, because they were first offering high priced diapers that seemed less attractive to the customers, because they didn’t have enough money to spend on purchasing those expensive diapers for their babies. P&G also launched its new sanitized product to a regional area with the plan of offering it in small sizes as well. In 1982, P&G did not adopt any change because they were offering poor quality diapers and other competingmarkets like Japan, were offering diapers with an excellent quality.

Kimbies and Clark was bringing the change when it decided to adopt the technological advancement. Because of this acceptance of technological advancement their diapers named Huggies, boosted the sales revenue for K-C.

Suggested Alternatives

Alternative-1: Introduction of Specific Gender Disposable Diapers At National Level:

One of the suggested alternatives to K-C is that the company should roll out its gender specific disposable diapers at the national level. The reason behind the roll out of gender specific alternative is that the introduction would improve the competitive position of the company. The pros and cons of the introduction of specific gender disposable diapers at the international level are as follows:

Pros:

Signals to be responsive in the market against the competitors’ activities.
Allows the company to cover more demographic segment and maintain its competitive edge.
The launch of gender specific diapers would maintain the competitive position of K-C in the US diaper market.
It would avoid the risk of capturing more market share by P&G through it’s His and Her disposable diapers.

Cons:

The additional fixed cost would be required in order to manufacture and market the product, such as: advertising and promotional cost which ultimately impact the profitability of the company.
The product is new to the market and consumers, and the response of the customers towards the product is unknown, which untimely increases the uncertainty about the product.
The product is new to the market, so it also tends of possess high chances of failure.

Alternative-2:Introduce Similar Product with Few Modification

Another suggestive alternative for the company is that the company can also introduce a similar product to its competitor in order to maintain its competitive position in the industry. The pros and cons are as follows:

Pros:

The introduction of a similar product would help the company to maintain its competitive position in the industry.
Modification in the similar product would attract new customer, whichwould help the company to gain more market share as well as toimprove its profitability.
It would prove to be a new product, and Specific diapers would be the extension of the features in the existing product.
Modification might provide first mover advantage to the company.

Cons:

The unknown reaction by the customers towards the modification.
Intensive capital is requiredforthe introduction of new product.
Chances of failure of the new product.

Alternative-3: Focus On Geographical Expansion

Another suggestive alternative is that the company can focus on geographical expansion. The pros and cons of this alternative are as follows:

Pros:

Improve brand recognition and profitability of the company throughits global presence.
Attract new customers by engaging in the new markets.
The company has a chance to achieve economies of scale through global sales.
Improve the profitability and competitive position of the company.

Cons:

Numerous cultures and environmental barriers among different countries.
Huge capital investment is required forthe geographical expansion.
K-C might fail to get potential sales from international markets with an intense competition and tough competitors with high technologies.

Alternative-4:Invest In Technology and Advertising

Another suggestive alternative is that the company should invest in advertising and promotional activities and adopt high technological equipment. The pros and cons of this alternative are as follows:

Pros:

Advertising attracts new customers, which improves the consumer base of the company.
Advance technology helps the company to adopt advance process through which the companywould be able to cut its various overhead costs and import production capacity.
It would provide a high sales growth to K-C than specific disposable products, as the market segment has more potential to grow as compared to thesaturated market segment of disposable diapers.
Improves the reputation of the company, because the new technology would be eco-friendly.
The customers would be able to gain an insight of the features being introduced in the company’s product

Cons:

Huge capital investment is required in upgrading the technology and promotional activities.
Strategies of the company would be easy to imitate.
The trained workforce would be required to handle the new product of the company.

Recommendation

On the basis of the above analysis, it is recommended that the company should focus on the introduction of a similar product than its competitors, who have already introduced few modifications and have their major focus on geographical expansions. The reason behind suggesting these alternatives are:introduction of similar product with few modifications would help the company to attract more consumers and would increase the portfolio of the company. Furthermore, few modifications would provide safety to the company from any legal obligations. Through an expansion, the company would be able to improve its consumer base and would have a new market for its current product, which would ultimately improve the profitability and sales of the companyand provide a competitive edge to the company.

Conclusion

On the basis of analysis, it is concluded that both the companies have been controlling the diapers industry from the last 4 decades. They are competinghighly on the introduction of new technologies to reduce their costs, improvean existing product or to introduce new ones. Both the companies have taken the competition to different markets by making their presences intothe international markets and having production plants in different regional locations throughout the Europe and Asia. In order to increase its sales, the company should move towards geographical expansion. This would help the company to improve its consumer base and would allow it to maintain its competitive position in the diapers’ industry. Moreover, the company should modify its products in order to gain the attention of the consumer towards its product, and to occupy a substantial market position............................

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