Newell Company Case

Topics: Corporation, Newell Rubbermaid, Customer service Pages: 9 (1887 words) Published: June 8, 2014
Newell Company Case Analysis
Group: Nam, Xin, Shuyang
Problem Statement:
CEO John McDonough decided on making acquisition of Calphalon and Rubbermaid, which influent shareholders’ confidence. Newell Company’s Philosophy and Mission
Newell Company created corporate advantages by following the company’s mission and philosophy. The philosophy "Build on what we do best" was started by CEO Mr. Dan Ferguson. This philosophy can be described as Newell focus on selling multiproduct to large mass retailers with high-volume and low-cost. Their mission is "Newell is a manufacturer and full-service marketer of consumer products for serving the needs of volume purchasers.” The company’s philosophy and mission has a great influence on its strategies. Newell creates various strategies to accomplish the company mission. For example, one of Newell’s key strategies is serving the mass retailer. The strategy of acquisition helps to improve manufacturing processes in order to get high-volume and low cost product. Newell’s strategies align with its philosophy and mission. It can create corporate advantages in the industry. Moreover, the basic strategy of total Newell strategy is that “merchandise a multi-product offering of brand-name staple consumers products, with an emphasis on excellent customers service, in order to achieve maximum results for our stockholders”. The acquisition Rubbermaid and Calphalon enhanced Newell’s strength in terms of merchandise multiproduct offering and rise Newell’s brand popularity. However, with negative feedback of Rubbermaid’s customers, Rubbermaid’s strategy of customer services could not alignment with Newell’s mission and basic strategy that lead to a negative influence on shareholder satisfactions. Even though Calphalon’s competitor Meyer have the lower price than Calphalon, Caphalon is for the younger and more fashion oriented market which is not efficient to use the low cost strategy for the high-end product, because Newell maybe unable to match the cost structure of the firm operating with less overhead and fewer product lines. According to the Newell acquision experience, Newell’s strategy is to acquire and integrate business which is nonfashion product, to acquire the company for the fashion ortiented market is Acquisition

Newell’s strategy was to grow and expand their product line. In our opinion, the company is focused on more acquisition strategy than organic growth which represents the true growth for the core of the company. This excludes any growth acquired from takeovers, acquisitions or mergers. Newell acquired different companies in the basics home and hardware products since 1996 (exhibit 3). According to Mergers and Acquisition article, acquisition benefits the company by increasing Company’s value and market power. Two companies together will generate synergy that improves revenue and cost saving of the company. Furthermore, acquisition can create shareholder value as well because two companies together are more valuable than two separate companies. Newell and acquiring companies benefit in many ways from the acquisition. such as, development capabilities. The acquisitions allow Newell to add more products to its products line. It creates complement capabilities which two different abilities of the companies which fit well together. As the result, Newell is able to offer differentiated products of the same category to suit different customers. Moreover, in transferring its technologies to the acquiring companies, Newell has a technology advance such as EDI. The company is able to deliver products according to retailer’s request, making it more efficient, and improving its reputation as a “Good Shipper”. After acquisition, Newell transfers its technology to acquiring companies in order to deliver the products in an efficient way. Acquiring companies learn new technologies from Newell and they both are able to develop the innovation process. The company put acquiring companies...
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