Newell Corporate Strategy Essay

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1. Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its portfolio?

Newell Company’s strategy is to acquire different companies that will help them grow their business in the basic home and hardware products industry before 1994 and started diversifying into unrelated field such as writing instruments and window treatments to grow the company as a whole. These companies are mostly underperforming and suffer from high cost thus Newell would put these companies through a process of streamlining, focusing on operational efficiency and profitability, and this process know as “Newellization” would align these companies to Newell’s own cost structure and processes in less than 18 …show more content…
These retailers such as Wal-Mart had considerable leverage over price and scheduling while threatening to introduce competitor to their stores thus putting more pressure on suppliers to be more efficient in their warehouse inventory management and also their distribution systems. In addition, the industry average for first-pass line-fill was pushed above 80% and Newell had to increase its goal from 95% to near 100%.
The situation of retailers getting stronger and more demanding will erode Newell’s bargaining power over time and thus Newell strategy to only acquire small and underperforming companies has to change. Calphalon fits into Newell’s original strategy of dealing with household materials and add on to their range of cookware products and thus Newell can offer even more variety and reach out to the more high-end segment. Rubbermaid also produce plastic products for home storage and commercial products. However, Newell has to invest a lot more to do “Newellisation” for these 2 companies and thus profit margins will be affected in this case.
As seen in the case, Newell is still too focused in manufacturing and selling hardware and housewares, thus Newell has been adding too many products of the same category and thus it may cannibalize its own products in this case. Although variety is always good, customers would not buy a set of products of the same category such as cooking pots. Cannibalization would
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