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Financial Analysis of the Consumer Products Industry

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Financial Analysis of the Consumer Products Industry

The consumer products industry produces and creates products that nearly everybody uses on a daily basis. Toilet paper, toothpaste, diapers, tissues, cosmetics, small appliances, and detergents are just a small sample of what this industry provides. With such a vast array of product offerings, which are essential to modern day living, there is no threat of this industry becoming obsolete. In fact, as emerging markets continue to prosper and new consumers enter the market, there are many growth opportunities available to the industry. In this analysis Proctor and Gamble, the largest competitor in the industry, will be compared Unilever, Colgate-Palmolive, and Kimberly Clark. The goal of this analysis is to figure out which factors drive success in the industry, then use ratios and trends to determine which company is currently performing the best financially. Based on the results, the conclusion should highlight which company will outperform its competition in the future.
Factors that Drive Success in the Industry
In developed markets, the cost of living is on the rise. Gas prices are higher than ever, and unemployment rates are also high. All this financial pressure translates to consumers wanting more for their money. Companies who can offer products that are both valuable to the consumers and priced well will outperform the competition. The consumer products industry is a concentrated, meaning that the industry is dominated and controlled by large corporations. One of the main barriers to entry is the fact that all the companies in the industry have size to their advantage. Having an economy of scale allows these companies to reach more consumers and keep costs low, which, in this industry, is necessary to competitively price products and still turn a profit. To illustrate the importance that

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