Newell
Newell Company
Corporate Strategy Assignment
Case Analysis
Corporate Strategy
Newell focuses on market for hardware and do-it-yourself (DIY) products to volume merchandisers Adhering to a strategy of acquisition, consolidation and centralization, the company built divisions with economies of scale across a broad range of price points in numerous product offerings. Based on “Build on what we do best” philosophy
The strategy is to acquire companies that manufacture low-technology, non seasonal, noncyclical, non fashionable products that volume retailers would keep on the shelves year in and year out.
Followed a program selling approach offering categories of “good” “better” “best” products.
Acquired businesses shared fundamental similarity
The companies chosen for acquisition were underperforming due to high cost and the operating margins are less than 10% in general
Newallization
The acquired companies were put through a process of streamlining, focusing on operational efficiency and profitability
Followed stringent approach of redirecting acquired business to focus on their core product and align them with Newell’s systems and processes.
Three standard systems are introduced in the acquired company within 6 to 18 months after acquisition Integrated financial system
Sales and order processing system
Flexible manufacturing system
Centralized administration at corporate level is responsible for legal and tax issues, benefits,
Electronic Data Interchange, credit and collection, financial control systems
Each division is responsible to handle design, manufacturing, marketing, sales, and service as well as merchandising to the customer but centrally controlled by corporate-run administrative, legal, and treasury systems.
Non negotiable payment agreement of 2%-30-net-45
Corporate Advantages
Established process of integrating acquisitions and streamlining it with parent company practices
Corporate Strategy Assignment
Case Analysis
Corporate Strategy
Newell focuses on market for hardware and do-it-yourself (DIY) products to volume merchandisers Adhering to a strategy of acquisition, consolidation and centralization, the company built divisions with economies of scale across a broad range of price points in numerous product offerings. Based on “Build on what we do best” philosophy
The strategy is to acquire companies that manufacture low-technology, non seasonal, noncyclical, non fashionable products that volume retailers would keep on the shelves year in and year out.
Followed a program selling approach offering categories of “good” “better” “best” products.
Acquired businesses shared fundamental similarity
The companies chosen for acquisition were underperforming due to high cost and the operating margins are less than 10% in general
Newallization
The acquired companies were put through a process of streamlining, focusing on operational efficiency and profitability
Followed stringent approach of redirecting acquired business to focus on their core product and align them with Newell’s systems and processes.
Three standard systems are introduced in the acquired company within 6 to 18 months after acquisition Integrated financial system
Sales and order processing system
Flexible manufacturing system
Centralized administration at corporate level is responsible for legal and tax issues, benefits,
Electronic Data Interchange, credit and collection, financial control systems
Each division is responsible to handle design, manufacturing, marketing, sales, and service as well as merchandising to the customer but centrally controlled by corporate-run administrative, legal, and treasury systems.
Non negotiable payment agreement of 2%-30-net-45
Corporate Advantages
Established process of integrating acquisitions and streamlining it with parent company practices