As the world's developing countries become an increasingly important source of profitable growth, Kimberly-Clark is turning to its operations in markets such as Korea and Australia for business models that can be replicated elsewhere. K-C's success in these two countries has resulted from strong local execution of global strategies � customized where appropriate to maximize local opportunities. They've also focused on innovation, brand equity and organizational strength to drive growth and profitability.

The outcome has been strong performance. Over the last five years, sales growth in Korea and Australia has averaged nearly 10 percent annually and profits are up at a strong double-digit rate. The Korean business holds No. 1 positions in all categories in which it competes, and Kimberly-Clark Australia has the No. 1 or No. 2 position in seven of the eight major consumer product categories in which it competes.

To take better advantage of opportunities outside of North America and Western Europe, K-C recently created the Developing and Emerging Markets business unit. "By combining the developing and emerging markets into one group, we'll put more focus on the best growth opportunities in Asia, Latin America and Eastern Europe," said Robert Abernathy, president of the unit. "We'll improve the speed and consistency of our execution of global strategies, and we'll be able to more rapidly deploy innovations and best practices across the regions. Essentially, our goal is to duplicate the achievements of Korea and Australia."

Entering the market via partnership
K-C's businesses in Korea and Australia both began with joint ventures. Kimberly-Clark Australia (KCA) started in 1963 as a 50-50 joint venture with Amcor, a local packaging company. K-C bought out Amcor in 2001 and 2002, making KCA a wholly-owned subsidiary. In Korea, K-C partnered with a pharmaceutical company, Yuhan Corporation, to form Yuhan-Kimberly in 1970. Today, K-C owns 70 percent of Yuhan-Kimberly.

Entering the market with a local partner or a joint venture is a strategy K-C has employed in other parts of the world as well. This approach has given K-C the local market expertise, flexibility and often lower entry cost to build leadership positions around the globe.

Brand strength drives growth
K-C's businesses in Korea and Australia rely on their deep market knowledge and customer and consumer relationships to build strong brand franchises. They continually research consumer needs and leverage K-C's innovative technologies to provide consumer-preferred brands and products.

"In Korea, our premium strategy is based on differentiated products geared to the specific needs of consumers, which is the best route to profitability, enduring brand image and consumer loyalty," said KookHyun Moon, president of K-C's North Asia Region, which includes Korea.

KCA's strategy also focuses on best-in-class products to drive growth, said Wayne Jones, president of K-C's South Asia Region, which includes Australia. Also important to the strategy are investments in supply chain processes and information technology to enhance customer responsiveness and reduce costs.

K-C's approach in these areas is paying off. For example, since 1995, the introduction of KOTEX® White and KOTEX Goodfeel feminine pads, along with regular, ongoing product upgrades and line extensions have driven Yuhan-Kimberly's market share from 20 percent to more than 60 percent today.

In Australia, VIVA® towels made with our proprietary uncreped-through-air-dried (UCTAD) technology were successfully launched last year and have already captured a 14 percent market share. The company recently started up an UCTAD machine in Australia to support further growth in the region.

Strong organizations attract talent
Strong leadership and committed employees contribute to K-C's success in these markets. "We've simplified our processes and streamlined the business. That leads to an empowered and fast-moving organization. And we attract top talent," Moon said. "People want to work for this company."

In fact, Yuhan-Kimberly was named the No. 1 Asian employer in 2003 by Hewitt Associates and the Asian Wall Street Journal. K-C Australia has also previously ranked among the top 10 best employers to work for in Australia, based on a study by Hewitt.

Success in other markets
K-C's emphasis on local execution of global strategies is paying off in other markets as well. In Central America, K-C's market shares are up to 70 percent in infant care, 40 percent in feminine care and nearly 65 percent in bathroom tissue. In Russia, K-C entered the diaper market eight years ago and is experiencing rapid growth. The HUGGIES® brand holds the leading position in the category and is the springboard for profitable growth in that fast-growing market.

"Our businesses in Korea and Australia are delivering great results," Abernathy said. "They are outstanding models for sustainable, profitable growth. With our new Developing and Emerging Markets unit, we plan to replicate their successes around the world."