Energex

In late January 2011, Beth Springer headed into the executive committee strategy meeting at The Clorox Company (Clorox) in Oakland, California. Clorox manufactured and marketed premium, branded consumer products primarily in the U.S. through grocery stores and mass merchandisers. Springer, executive vice president international and natural personal care, and the other executive committee members would discuss Clorox’s annual and long-range plans. (See Exhibit 1 for executive committee members.) She knew tensions could run high as they debated whether to recommit to the existing strategy and tactics, offshoots of Clorox’s 2007 Centennial Strategy.

Shortly after the arrival of Clorox chairman and CEO Don Knauss in 2006, the company crafted a strategic plan honoring the company’s 100th anniversary in 2013. The Centennial Strategy, as it was called, provided a roadmap for long-term, accelerated growth and defined the metrics to evaluate success. A key aspect was the company’s increased emphasis on major, global consumer trends (“megatrends”). Over the next few years, Clorox focused on two of the megatrends—health and wellness, and environmental sustainability—which led to products and go-to-market strategies that addressed consumers’ growing interest in what Clorox broadly termed “sustainability.” This, in turn, drove the successful repositioning of Brita (a water filtration system), the acquisition of Burt’s Bees (a natural personal care line), and the launch of Green Works (a natural cleaning product line).

In August 2010, Clorox reported fiscal year 2010 sales of $5.5 billion and progress against its Centennial Strategy annual targets that mostly met or exceeded expectations despite the challenging business environment. (See Exhibits 2 and 3 for five-year financial summary and progress on the Centennial Strategy annual targets, respectively.) However, the financial outlook for 2011 was less favorable, and Clorox projected flat sales for its fiscal year ending June 30, 2011. Sales of Clorox’s brands—most with leading market shares—were soft amidst the prolonged economic downturn.

As Springer settled into her chair, she wondered if

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