Newell Company: the Rubbermaid Opportunity

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Newell’s businesses target the mass retail market, mostly in the discount segment, by distributing mostly off-the-shelf goods through mass-retail channels, transforming shelf space and on-time delivery into a very powerful value proposition. Since the efficient use of these vital resources is a pillar for the success of Newell, it can be deemed its competitive advantage. Newell’s corporate strategy is to grow through acquisitions, by leveraging synergies in the aforementioned resources rather than in product offerings. The critical resources that are shared throughout Newell’s firms are its managers. This allows for best practices to be disseminated among its newly acquired firms without undermining the business units’ autonomy. In terms of sharing resources, Newell has centralized key administrative functions through a unified data-management system, which allows it to orchestrate its businesses’ activities more efficiently. Newell’s organizational configuration has enabled these key resources work to its advantage, thus achieving coordination. The control systems at Newell are balanced between the financial and operational methods. This allows the firm to regulate performance in terms of both internal and external factors that influence the business. There is a set of multiple operating variables and financial measures that are reviewed monthly, with a healthy bonus for managers that meet related goals. By having its measurement and rewards systems fit with its business goals, Newell’s has ensured that strategic control is established through the proper leveraging of its management team’s experience. According to the “Triangle of Corporate Strategy,” with all three strategic factors present among its resources, organization and business (competitive advantage, strategic control and coordination), Newell has successfully created a corporate advantage that is guided by a value adding vision, which strives to make the value of the firm larger than the sum of all...
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