What Is Newell's Corporate Strategy

Inconsistent acquisition target:
The leadership at Newell knew that its growth strategy would require big acquisition as the growth prospects offered by purely organic growth from its existing products were very limited. Newell was a veteran buyer. During the last 30 years, Newell had built enormous value for its stakeholders by pursuing a strategy of inorganic growth by acquiring large number of companies like Shaprie pens, Holson Burnes, Intercraft etc. Although acquisitions in the past had been small and manageable, the company’s leaders had a more ambitious vision for the company now and hence believed they needed to think of bigger targets. With the prospect of acquiring Rubbermaid, Newell thought it was building scale in its operations and reinforcing a strong brand, and that it would be the perfect
Also, Rubbermaid also managed to conceal their real business performance and through superficial beautification, was able to portray a healthy picture of their business health
Rubbermaid’s executives were very persistent about the 3-week due diligence period to complete such a huge deal to prevent Newell from delving deep into the company’s performance. As a result of this small window of due diligence and Newell’s own enthusiasm to acquire Rubbermaid, it failed to truly assess the business performance of Rubbermaid, and got distracted with whatever picture Rubbermaid portrayed to them. In reality, what Newell failed to understand was that Rubbermaid was surrounded with problems such as heavy price discounting to wholesalers and as a result low margins, poor customer service, rising price of raw materials etc. As a result, Newell never realized the true worth of Rubbermaid and naturally far more than what the company was actually worth of because of all the problems associated with its