Kenvue KVUE Business Risk Report

I. Market Risks

A. Competition risk – Kenvue operates in highly competitive markets for consumer health products, where it faces significant competition from both established and emerging companies. The company must continuously innovate to maintain its market share against competitors.

B. Regulatory risk – As a company in the health and personal care sector, Kenvue is subject to rigorous domestic and international regulations. Changes in regulations or failure to comply can result in penalties, product recalls, or harm to the company’s reputation.

C. Demand volatility risk – Demand for Kenvue’s products can be highly sensitive to changes in consumer preferences and economic conditions. Shifts in health trends or economic downturns might reduce demand for certain products.

II. Financial Risks

A. Foreign exchange risk – Kenvue, being a global operator, is exposed to currency fluctuations that can impact its profitability, especially in its international transactions and conversions.

B. Credit risk – The company faces credit risk from its customers, which can affect its financial conditions if significant numbers of customers fail to meet their payment obligations.

C. Liquidity risk – Kenvue must manage liquidity risk to ensure it has sufficient cash flow to meet its financial obligations and fund its operations without significant disruptions.

III. Operational Risks

A. Supply chain risk – Kenvue’s reliance on global supply chains exposes it to risks such as delays, disruptions from natural disasters, or geopolitical events that can hinder product availability.

B. Technology risk – Dependency on information technology systems places Kenvue at risk of operational disruptions from IT failures or security breaches.

C. Business continuity risk – The company faces risks associated with business continuity, including natural disasters or pandemics affecting its operations and workforce productivity.

IV. Strategic Risks

A. Reputational risk – Any negative occurrences associated with Kenvue’s products, such as quality failures or health concerns, can significantly damage its brand image and consumer trust.

B. Expansion risk – As Kenvue seeks to expand into new geographic and product markets, it encounters risks from unfamiliar market dynamics and operational complexities.

C. Partnership risk – The company’s strategy includes collaborations with other firms which can pose risks if these partnerships fail to meet strategic objectives or lead to conflicts.

V. Legal and Compliance Risks

A. Litigation risk – Kenvue could be exposed to various legal claims and lawsuits, which could involve substantial legal expenses and damage to its reputation.

B. Compliance risk – Failure to adhere to laws and regulations in any of the countries where Kenvue operates could lead to fines, penalties, and a loss of business licenses.

C. Intellectual property risk – Protecting intellectual property is crucial for Kenvue, and infringement on its rights or the loss of intellectual property could impact its competitive position.

VI. Human Capital Risks

A. Talent retention risk – The competitive nature of the talent market poses a risk for Kenvue in retaining skilled employees vital for its research, development, and business operations.

B. Workforce diversity risk – Kenvue faces the challenge of creating a diverse workforce, which is essential for fostering innovation, understanding various consumer markets, and enhancing business performance.

C. Succession planning risk – The risk associated with inadequate succession planning can result in leadership voids that disrupt company strategies and operations.

VII. Information Security Risks

A. Data privacy risk – Kenvue collects and stores sensitive consumer data, subjecting it to risks of data breaches and non-compliance with global data protection regulations.

B. Cybersecurity risk – Ongoing and evolving cybersecurity threats pose significant risks to Kenvue’s IT infrastructure and data security.

C. Insider threat risk – Kenvue is susceptible to insider threats where employees might cause intentional or unintentional damage to the company’s systems or data.

VIII. Environmental and Social Responsibility Risks

A. Climate change risk – Environmental regulations and the physical risks related to climate change can impact Kenvue’s operations and supply chain logistics.

B. Supply chain sustainability risk – There is a significant risk in ensuring that all aspects of the supply chain operate sustainably, which is critical to maintaining brand credibility and meeting regulatory standards.

C. Community relations risk – Kenvue’s operations can impact local communities, and failing to manage these relationships can affect the company’s operations and image.