Newell Company Corporate Strategy Essay

1. In assessing Newell orders embodied- take aim dodging and whether the comp any adds nourish to the businesses inside its portfolio, it is necessary to identify its oerarching scheme and so explain it with context to how it affects the unhomogeneous businesses in spite of appearance the larger bodily body. Newell federations main integrated-level strategy as defined by Dan Fergurson was build on what we do best. The caller-out rivet on offset through strategical encyclopaedisms of cockeyeds that inter transplant low cost and elevateder(prenominal) volume reapings to large retailers, but that were underperforming receivable to high operating cost. After an acquisition, Newell would then change the lively available systems of the firm to align it with its unified structure. The aim was to add operational power and profitability and to think it on a key get throughing. In 1990, Newell as well as recognize the importance of native harvest and included it in its incarnate-level strategy.Newells corporate-level strategy had a high level of positive impact beca intention it was inbredly consistent. The corporate office maintained control everyplace legal, administrative and monetary functions while allowing single(a) air divisions to control marketing, manu accompanimenturing and sales. It also retained exacting control over each divisions incr placidity lines as it disallowed any deviation from the key return coun change defined by Newell. This ensured that the decisions made by various divisions remained in line with the Newell corporate office strategies. Overarching company goals were also align with its business strategies and acquisitions, and this was respectable for the various companies it acquired over prison term. ane of Newells corporate strategies was selling point of intersections across variant monetary pry points. This remained in accordance with its goal of being a provider of low cost and high volu me goods to large retailers and serve uped to keep the company competitive against refreshed entrants to the different price categories.This was advantageous to businesses under Newell as its various(prenominal) crop lines were able to retain eventful shelf space, ensuring better sales of products. pore growth via streamlining strategic acquisitions was enabled by Newells appropriate use of available resources. One of Newells core competencies was its operational force and its system of bringing acquired companies to its high standards of efficiency and profitability. Its success in the streamlining process fecal matter be seen from the rapidity with which changes were made and the results of the process. As stated in the case study,Newellization typically took little than 6 months to implement. After getting Anchor Hocking, the management from Newell achieved cost savings by letting go of redundant resources within the company much(prenominal) as its glass factory and i ts retail stores and introduced sweet systems which helped to bring about improved efficiency such as reducing its node lead order period from 18 to 7 days. While the businesses within Newell may nominate encountered issues due to the re setions on innovative growth, they ultimately benefited from the strain on operational efficiency and cost savings resulting in higher(prenominal) operating margins.Newells corporate-level strategy was reasonably propellent recounting to the environment. While it maintained a harsh focus on certain goals, the corporate strategy was also modified to include new ideas that would ensure sustainable growth. This provoke be seen from the case where Newells growth strategy was expanded to include the internationalistic market, widening their acquisition target national to include companies based overseas. This was due to the fact that Newells target market, retailers like Walmart, was expanding into unusual markets. In 1989, corporate managemen t recognized the importance of internal growth within the respective divisions instead of simply think on each division generating higher levels of profit, and the growth of the company being determined by acquisitions. They reflected this change in perspective by changing the corporate fillip structure to encourage executives to pursue internal growth in addition to its existing goals.Newells corporate-level strategy was effective for numerous another(prenominal) years as open fire be seen from the fact that it had higher returns to investors compared to the S&P 500. This was due to a number of factors such as maintaining internal consistency, efficient use of resources and keeping corporate strategy dynamic relative to the changing environment. Businesses acquired were in synergism and this was beneficial to individual businesses in ensuring less wastage and improved levels of service and efficacy. In addition, businesses were also able to take advantage of Newells econom ies of scale and economies of scope. However, despite its positive financial returns, as financial returns are indicatory of past policies being effective, it would not be symptomatic of future success. Newells strict enforcement of focus on key product lines without allowing for more innovative expansion of those product lines could lead to much slower levels of growth after initial operational synergies were realized.This would in turn be detrimental in maintaining its competitive advantage in the prospicient remain.4. While the acquisition of Calphalon could pose approximately problems in the integrating process, it was aligned to Newells overall corporate strategy and would be beneficial to Newell in the spacious run if Calphalon was incorporated without eroding its support product offering. Calphalons acquisition was beneficial to Newell in two ways. It allowed Newell to branch out into new markets that had not reached saturation without cannibalizing its existing product lines. While Newell pore on view market retailers such as Walmart and spot Depot, Calphalons products were sold to high determination retailers such as Williams Sonoma and Macys. Calphalons product offering and pissed daub light would enable Newell to reach out to the insurance premium market and diversify its product portfolio further. At the same time, Newells strong focus on customer relationships and Calphalons bearing of building partnerships with its retailers are similar and would ease its assimilation into the firm.Calphalons pull strategies could also be leveraged by Newell to differentiate its product portfolio from other low cost competitors, enable it to maintain its existing market share. Newells core competencies would be useful in reducing Calphalons rising cost while concentrating on its strength as a premium product. As can be seen from the financial statements, cost of goods sold increased significantly from 1996 to 1997 without a correspondingly large in crease in revenue. The problems go about by Calphalon in terms of trading operations would be easily manageable for Newell assumption its strong background in operational efficiency and its experience with assimilating acquisitions to its corporate system. However, as Newells product offerings were principally utilitarian while Calphalons products focused on an emotional connection among the product and the premium end user, Calphalons integration into Newell would be more finespun than other acquisitions.As the Newellization process typically removes the acquired companys systems to replace it with Newells system, its stringency could erode Calphalons brand equity as a premium cookware producer. While this would be difficult, it would heretofore make sense in the long run given the potential benefits to Newell and the relatively low amount of risk redeem in the acquisition.The acquisition of Rubbermaid would seem beneficial given the numerous advantages that Newell would g ain, but the numerous complications associated with the process as well as the fundamental differences between Newell and Rubbermaid make the acquisition too risky to undertake, and thus strategically unsound. The advantages associated with the Rubbermaid acquisition are obvious. Rubbermaid fit into Newells criteria for acquisition. It sold targeted product lines to mass retailers, and had strong brand equity. It also suffered from troubled operations, which Newellization would help to address. In addition, the purchase of Rubbermaid would enable Newell to cross the $10 billion threshold that would in turn lead to an increase in market power against retailers like Walmart who enforced harsh policies which were nonnegotiable.However, these advantages are offset by a number of issues. Newell and Rubbermaid, while move the same product offerings, had fundamentally different bases for competitive advantages. While Newell focused on operational efficiency, Rubbermaid was known for its product innovation. This would besotted that the processes that helped to streamline Newell-led companies would probably lead to the eating away Rubbermaids core competencies. At the time of the acquisition, Rubbermaid was only slightly smaller than Newell. The integration process would be more tangled and difficult due to the fact that Rubbermaid had many different product lines, all of which would have to changed to fit Newells corporate system.At the same time, Rubbermaids large size of it would mean that it would be more repugn for Newell to change corporate strategy without alienate the existing workforce. Both of the factors above unite would mean that in order to pursue the acquisition and realize all the benefits associated with it, it would be necessary for Newell to change its corporate strategy to address the differences between Newell and Rubbermaid. However, this was not mentioned in the case study. Thus, without implementing a large-scale change in Newell, it wou ld be difficult to aggregate both companies to create synergy and value for the overall firm. The difficulties in integration, the high risks associated with the integration, and the neediness of change in Newells corporate strategies translate to an illogical acquisition by Newell.