Introduction In 1998‚ Newell Company set out to expand its revenue base through strategic acquisition of two major companies. Newell’s CEO at that time was John McDonough‚ who was in charge of positioning the publicly traded company to an improved revenue base through differential product mix. The idea to broaden Newell Company through acquisition was an energetic and very optimistic strategic initiative to increase shareholder value in a shortened period of time. Unfortunately‚ the company compromised
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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
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Newell Company: The Rubbermaid Opportunity In October 1998‚ Newell Company was considering a merger with Rubbermaid Incorporated to form a new company‚ Newell Rubbermaid Incorporated. The agreement would be through a tax-free exchange of shares valued at $5.8 billion. Newell had revenues of $3.7 billion in 1998 across three major product groupings: Hardware and Home Furnishings‚ Office Products‚ and Housewares. Rubbermaid is a renowned manufacturer of a wide range of plastic products ranging from
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NEWELL / RUBBERMAID Analysis BACKGROUND In October 1998‚ Newell Company was considering a merger with Rubbermaid Incorporated to form a new company‚ Newell Rubbermaid Incorporated. The amalgamation would be through a tax-free exchange of shares valued at $5.8 billion. Newell had three major product groupings: Hardware and Home Furnishings‚ Office Products‚ and Housewares. Rubbermaid is a renowned manufacturer of a wide range of plastic products ranging from children’s toys through housewares.
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Newell Company: Corporate Strategy This case presents an example of a real world dilemma for corporate executives. It is not enough for a company to have superior historical financial performance for the financial markets. These markets will put a premium on a company only if the business strategy is sound and the plans for future growth are solid. Under such constant pressures for growth‚ company executives constantly look for the "hidden gems" in other companies‚ geographical areas‚ and product
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DOES NEWELL HAVE A SUCCESSFUL CORPORATE-LEVEL STRATEGY? DOES THE COMPANY ADD VALUE TO THE BUSINESSES WITHIN ITS PORTFOLIO? Newell’s has a good corporate- level strategy as they had over 40 businesses in the late 1990’s. They main objective is to acquire companies failing and have financial problems. They bring up these companies by developing them to become cost efficient through operational strategies and creating profits. This will take Newell up to 18 months to transform these companies.
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The case is about the company Newell considering the acquisition of Rubbermaid Incorporated to develop a new company. . Rubbermaid is a manufacturer of plastic products ranging from children’s toys‚ house wares‚ to commercial items. Acquisitions are Newell’s main foundation when it comes to growing as a company and making sure every acquisition goes through the proper Newellization process to improve new businesses. Rubbermaid suffered from problems affecting the retail buyers who purchased their
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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
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How did Newell try to create value? First of all‚ there are a lot of answers to that question. What strikes most is the high number of acquisitions undertaken by the Newell Company‚ which in the end let it become the single most important company in the business of housewares. The main effect were tremendous economies of scale and to a smaller amount economies of scope. Targeted firms all showed a big market share and helped ensuring Newell’s significant presence in the retailer’s shelf space
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Newell Company: Corporate Strategy Newell‚ manufacturer and marketer of basic home and hardware products‚ is a rather unrelated diversified company with more than 30 operating businesses. Grown over the years through many acquisitions‚ the company is facing one of her most important challenge: the acquisition of Calphalon (high-quality cookware) and Rubbermaid (plastic products). Both the acquisition were part of that period’s CEO’s plan to increase Newell’s strength on the market‚ and to boost
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