Kohler Company Core Competencies

Background

Kohler Co. was founded in 1883, by John Michael Kohler, in Sheboygan, Wisconsin. One of the oldest and largest privately held firms in the US, Kohler Co., in 1998, employed 17,500 employees and reached over $2 billion in sales. Its business portfolio ranged from its well-known plumbing fixtures to small engines and generators; and recently diversifying into furniture and luxury resorts. Known for its ability to innovate, Kohler Co. considered one of its main core competencies its ability to keep the company private and family owned, in its over 100 year history. As a privately held company, Kohler Co. was not required to disclose its financial statements. Furthermore, Kohler believed in keeping the business within the family for future generations. However, in 1998, after an unsuccessful attempt in 1978 to allocate outside shares back into the hands of family members, Herbert V. Kohler Jr., Chairman and CEO of Kohler Co., proposed to recapitalize the company. The recapitalization process would allow family members to either a) sell their stock back to the company at fair market value (exit opportunity for them), or b) convert their stock to a
has always had to ability to innovate. After first establishing the bathtub in 1883, Kohler expanded to develop a Kohler village, in 1900, to allow employees to live near the manufacturing operations at cost. Thirty-five years later, Kohler Co. expanded into becoming a leader in plumbing fixtures manufacturing. As times changed, Kohler Co. was always able to evolve. Even as technology changed, Kohler Co. continued to innovate and stand firm on its core competencies; remain private, family-owned, continue to reinvest 90% of its earnings back into the company, and pledge 5% to its foundation. Kohler Co. had no intention to go public, nor sell its company. The only and last debenture was in 1977, and Kohler Co. decided to completely pay off those bonds a year