Newell Company Essay
1. Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its portfolio?
* Newell’s corporate-level strategy focuses on the growth through acquisitions of companies that manufactured low technology, nonseasonal, noncyclical, and nonfashionable products that volume retailers would always keep on their shelf. These companies usually manufacture brand-name staple products that ranked #1 or #2 but may not be efficiently managed.
* Newell’s goal is to increase its sales and profitability by offering a comprehensive range of products and reliable service to the mass retail channel. Newell has chosen to develop its product line through key acquisitions, rather than internal organic growth. The strategy succeeds based on their two pronged approach of following an established acquisition process (Newellization) and ensuring corporate continuity across the division to support its performance in the market. This strategy helps Newell successfully diversify their portfolio of products for mass retailers.
2. What are Newell’s distinctive resources?
* Pricing model that that covers across all product categories: Newell used different pricing point, “good,” “better,” and “best” to meet all customers needs achieving the critical mess
3. What challenges faced the company in the late 1990s?
* One of the main challenges in the late 1990s was the increase in customer buying power. By 1997, three mass retailer chains controlled 80% of the discount retailer market. This allowed retailers to obtain significant leverage over price and scheduling. * Another challenge in the 1990s was the acquisitions of Calphalon and Rubbermaid. These were both major stepping stones for Newell in that both companies will bring greater brand recognition to the Newell brand. It was a challenge because of the speed in which the companies were acquired and the short amount of time between the two acquisitions.
At the time, Calphalon was in a different market, and Newell wanted to enter the department and specialty store competition. This required changes within the Newell Company because of a different view of products and competition. Rubbermaid was a difficult acquisition because of the vastness of the company in general. Some industry observers worried that this target would be too large to be “Newellized.”