...Question 1. Success of Newell Corporate Strategy The strategy of Newell Corporation can be described as a strategy of related diversification. The diversification strategy may seem unrelated because Newell was acquiring companies from different industries (office products, picture frames, cookware etc.), but in fact the diversification was related on the basis of: 1) Deploying the unique resources of the company (management relationship with retailers, logistics etc.) 2) Using the same channels of distribution (Wall-mart, Kmart, etc) 3) Common characteristics of the products: low-technology, non- seasonal, non- cyclical, non-fashionable . The most representative quantitative data that proves the success of the Newell strategy is 10 years average return of 31% for investors, that was much higher than average market return of 18%. Also we can mention the stable growth of revenues and profit of the company, but these figures may be not very representative, because the growth in revenues could be a result of extensive growth of the company (if you acquire a lot of companies, your sales will grow for sure, but it is not an indicator of success). What is more important is a stable growth in earning per share in 1992-1997 from $1,05 to $1,82. Another indicator of stable financial situation in the company was a high level of liquidity. This fact could be mention not only on the level of competitive strategy, but also on the level of corporate strategy because the policy of relationship...
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...1. Based on the case and the paper "Creating Corporate Advantage" characterize the previous corporate strategy of Newell (before 2001) in terms of: Corporate Resources ; Businesses; Functions of Corporate Office Before Daniel Ferguson became Newell´s CEO, as an old-line manufacturer of brass curtain rods, the company´s main effort was in offering curtain rods through a big array of channels. In the absence of a defined composition of strategy with a specific target and as to build a corporate advantage, Ferguson recognized that there many elements within the company could be aligned with one another. He foresaw the market trend and announced Newell´s consolidation in the retail business. Based on “build on what we do best”, Newell started to focus on manufacturing and distributing sized merchandise lines to the volume merchandiser. Over the next three decades, through the acquisition of businesses that fit its strategy, Newell acquired 75 different sized companies. What made Newell´s strategy so special? To answer this question, there are three elements that contributed positively to the success of Newell’s corporate strategy: corporate resources, businesses and functions of Corporate Office. Starting with the nature of the resources owned by Newell, which include its assets, skills and capabilities, we could not say whether it is specific or general; Newell is responsible for owning a large diversified portfolio with different business units. This outstanding portfolio included...
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...Newell Company-The Rubbermaid Opportunity When performing an internal analysis of Newell Company, a few common denominators of Newell’s businesses can be observed. Newell’s strategy was to acquire companies selling well-branded goods to mass retailers at low profit margins. The after the acquisition of theses companies, they would go through a process known as “Newellization.” The goal of “Newellization” was to align the newly acquired companies with Newell operations, with the end goal of turning profit margin to 10-15% within a period of less than 18 months. The companies targeted typically offered products that had operations similar in nature to Newell existing line of products but also offered growth prospects to develop the company as a whole. This allowed Newell to accomplish an integration of these companies rapidly and help achieve an overall efficiency. All of the businesses target the mass retail market. They target this market by distributing off-the-shelf products through mass-retail channels. This is one of the main reasons the Newell businesses achieved success as their value propositions of shelf space and on-time delivery were incorporated into their strategies. Newell also uses growing through acquisitions as another one of its corporate strategies. This is done by the leveraging of synergies among resources, not products, allowing things to be very consistent throughout each business and the newly acquired firms. I believe the critical corporate...
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... (BUSA 5051)MBA (PART TIME) (2013)Individual Assignment (Session 5) | | Egor A. Oussov (Student No. 578723)Word Count: 996 Submission Date: May 15, 2012 | Table of Contents Table of Contents 2 1. Newell Case Study 3 Question 1: 3 Question 2: 4 Question 3: 4 Question 4: 5 List of References 6 1. Newell Case Study Question 1: Does Newell have a successful corporate-level strategy? Does the company add value to the business within its portfolio? Newell has a successful corporate-level strategy which has definitely proven itself over nine decades with annual revenue reaching $6 billion. The corporate strategy is embedded on well defined pillars, which has a strong emphasis on the growth through acquisitions of top performing brands in relating industries, creating efficiencies though centralised administration with an assessment of the divisional performance in terms of profitability and distributing their products through mass retailers. Newell’s CEO believed acquisitions contributed towards growth strategy which provided “course corrections”, increasing their market power and striving towards $10 billion plus market mass which would help to reach the critical mass to help to increase their profitability and market dominance. I strongly believe that Newell corporate division adds value for its businesses within its portfolio. The head office is responsible for identifying, screening and acquiring strategically contributive entities and “Newellisation” process...
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...From the Newell case, the main takeaways are that a company needs to have a clear direction or vision where it should be operate in and then it should create the competitive advantages in that space, follow with the consistent corporate strategy to sustain those competitive advantages. Newell started with a strong vision in providing quality products to mass retailers. Its competitive advantage is to set a strong brand recognition with the mass retailers by always full-filling their deliveries on time and offers wide range of products with strong brand identities that the end users demand from the retailers. To sustain these competitive advantages, Newell grew through acquisition of companies that fit its strategic goals and transformed these companies to operate more efficiently through economy of scale and centralization of corporate functions. With an excellent track record with the mass retailers, strong relationships between the executive teams, and the corporate environment fostering driven management teams, Newell created corporate advantages that reinforces its competitive advantages and made them extremely difficult to copy by the new entrants and to substitute by its competitors. Prior to acquisition of Calphalon and Rubbermaid, Newell created corporate advantages through 2 streamlines. First, Newell consistently generate growth through strategic acquisitions that aligned with its key goals of maximizing profit and servicing mass retailers. Second, Newell created corporate...
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...Diversification: Newell Co used a “related linked” diversification approach. Newell is organized into three business categories: Hardware/Home Furnishings, Office Products, and Housewares. These three business categories share distribution channels, such as supermarkets (Wal-Mart) and office supply stores (Staples). The products are sold under different brands and do not generally share any technology. Prior Diversification Efforts: According to the case, immediately after a new acquisition, “Newellization” typically took place in less than 18 months. In that time, three categories of standard Newell systems were introduced: an integrated financial system, a sales and order processing system, and a flexible manufacturing system. Corporate teams, composed of a few company executives, were assembled to centralize administration, accounting, and customer-related financial aspects, consolidating the systems into a single corporate computer system. Rubbermaid Acquisition: Rubbermaid had excellent skill with its ability to develop products, however, it struggled bringing that skill to the bottom line. For Rubbermaid, it will be a chance for a company to deliver its brand equity to the bottom line. While Newell has had much experience with acquisitions of smaller companies, Rubbermaid might be too large to digest. Rubbermaid had to restructure its operations twice, as well as customers complained that Rubbermaid could not provide the service that they required. These motives...
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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 items, operations, not being able to compete with rival prices, to a decline in the company’s net earnings. In this case Newell Company contemplated whether or not acquiring Rubbermaid would be a good decision to make. Although Rubbermaid posed great growth opportunity and could possibly bring an increase in income for Newell, I do not think it would be a wise idea for them as a company to merge. Newell Company is highly respected and well known for its customer satisfaction, in-full delivery, the ability to implement sophisticated EDI tie-in with its customers, and the provision of marketing and merchandising programs for the different products they offer. Rubbermaid has had many problems when it comes to customer service, competing with their competitors, and unrealistic financial targets. In an article done by Fortune it was revealed that Rubbermaid had angered their most important retail buyers with ballooning cost forcing them to give shelf space to competitors, lacked modern...
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...Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its portfolio? Yes, Newell does have a successful corporate strategy and it does add value to the businesses within its portfolio. Newell’s corporate strategy can be summarized as follows. Newell manufactures low-technology, high-volume staple products in the categories hardware/ home furnishings, office products as well as housewares and sells to large mass retailers. It mirrors the consolidation in the retail business and the related market power of volume merchandisers by a continuous flow of acquisitions of companies. These companies are well-known brands and often claim a #1 or #2 position in terms of market share but that on the other hand are poorly managed on the cost side and hence financially underperforming. Newell substantially increases their operational efficiency and hence profitability by introducing Newell’s financial system, IT-based sales and order processing system and flexible manufacturing system (“Newellization”), i.e. by streamlining their processes. Regarding its mass retail customers Newell aims at a solid reputation for its high service quality (e.g. use of EDI and POS data along with reliability of JIT delivery), commanding a price premium. This quality level is also established in the acquired companies. Moreover, by consolidating industry capacity at high and low price points Newell reduces price pressure in the market, creates economies...
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...2.0 Problem 2.1. Expanding into Latin America From 1993 to 2002, KFC dominated the chicken segment of the U.S. fast-food market. Their market share, however, decreased by 13.4% over that 10 year period (Exhibit 4, 553). As the fast-food market matured, firms began to focus on globalization to continue growth. By early 2004, 56% of KFC’s restaurants were outside of the U.S. (558). Their initial focus was on Mexico, Puerto Rico, and the Caribbean, where they established dominance among competitors. Their struggle was in expanding beyond those markets. In their attempt to expand into Central and South America, KFC was met with many challenges. Many Latin American markets had not adopted the fast-food concept and preferred a more leisurely dining experience. The intense competition with major U.S. fast-food chains made it very risky to enter a new market. The geographic distance from the corporate offices made it difficult to control standards and quality. To continue growth, KFC would have to develop a strategy to overcome these obstacles and expand into these markets. 2.2. Strengthening position in Central America KFC initially expanded into Mexico, Puerto Rico, and the Caribbean due to geographic proximity and existing political and economic ties to the U.S. They were able to establish dominance in these markets because they had first-mover advantage and the local cultures accepted the fast-food concept. To further expand into Central America, KFC will have to develop a strategy...
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...Problemática. En este caso, se busca resolver si el próximo pasó de Newell alineada a su estrategia de crecimiento, mediante la diversificación, y específicamente si Newell podrá aumentar su valor, al realizar la denominada “Newellización”, con la última adquisición de Rubbermaid, dado su gran tamaño frente a las anteriores adquisiciones Contexto. Newell realiza su crecimiento mediante la estrategia de diversificación, realizando adquisiciones de empresas semejantes (Anexo 3), que fabricaban productos (Anexo 6) que pudiesen permanecer en los estantes de comerciantes (clientes) de alto volumen (Anexo 5), durante todo el año, y que a su vez, fueran empresas donde existieran brechas de eficiencia operacional y rentabilidad respecto a las que maneja Newell, de manera que luego de ser adquiridas, pudieran ser intervenidas (“Newellización”) y lograr que éstas lleguen a los niveles que Newell desea. A través, de estas adquisiciones Newell pretende ser líder en las diferentes líneas de productos y en todas las categorías de precios de estos, para así lograr los objetivos financieros definidos en el Anexo 2 y lograr un aumento sostenido en los ingresos netos (Anexo 4). Estrategia implementada por Newell. Para evaluar si la adquisición de Rubbermaid es una buena decisión, evaluaremos la estrategia desde el punto de vista del triangulo estratégico. Recursos, Negocios y Estructura, Sistemas y Procesos. Newell posee varios recursos y capacidades que le permiten cada vez que adquiere...
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...Supplier Power ……….………….…………....………………………………………………………………… 8 Buyer Power ………………………...……..………………………………………….…………….…………… 9 Degree of Rivalry ……………………….………..……………………………………………………………. 10 Threat of New Entrants ……….………....……….……………………………………………………….. 10 Threat of Substitutes …………….……….……………………………………….………………………… 11 Conclusion ....……. ………………..………………………………………………………………………………………….. 12 Problems and Solutions …………………………………………………………………………………………… 12 Works Cited ………………………………………...…………………………………………………………………………... 14 Introduction Gabe Newell, a Harvard drop out, began working for Microsoft in 1983. Newell spent thirteen years at Microsoft and emerged as a “Microsoft Millionaire.” Newell and his co-worker Mike Harrington left Microsoft in 1996 to begin their own company. The inspiration came from another former Microsoft employee named Michael Abrash. Abrash departed Microsoft to assist in creating the video game Quake at ID Software. In 1996, Newell and Harrington signed an LLC contract and founded the private company, Valve Corporation. Valve started off as purely a video game development company. By 1998, Valve had completed their first game titled Half-Life. Half-Life won over 50 game of the year awards and is considered one of...
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...| Newell & Rubbermaid | Case Study Analysis | | Submitted By:Vinesh MotwaniZain AliAffan RiazFaryal ArifNabil Nasir | 6/23/2014 | | | | | | | | | COMPANY BACKGROUNDTimeline * 1903 Created in 1903 by the acquisition of curtain rods manufacturer by Edgar Newell * 1921 First acquisition of Barnwell Mfg. Co. and renamed to Western Newell * 1965 Dan Ferguson named President who crafted the growth-by-acquisition strategy * 1983 onwards – acquisitions of W.T Rogers, Sanford, Levelor, Goody, Kirsch, Rolodex, Calphalon, Rubbermaid and othersVisionNewell is a manufacturer and full service marketer of consumer products serving the needs of volume purchasers”Offerings: Best better good“Newellization” – Well-established profit improvement and productivity enhancement process that is applied to integrate newly acquired product lines to the parent company.Newell’s key resources and capabilities are tailored around the company’s needs for growth and their customers need for diversity and efficient distribution. The company’s product range and depth (good, better, best) creates huge incentive for retailers to stock product from only one supplier. Their logistics operation with nearly100% first-pass line fill and expanding global presence help the company improve and expand with their customers (mass-merchandisers). The process of “Newellization” is a valuable resource to the company by which Newell acquire, convert, and integrate a new acquisition...
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...Clash of the Cultures: The Case of Newell Rubbermaid Figure 15.13 © Thinkstock Over time, Newell Company grew to be a diversified manufacturer and marketer of simple household items. In the early 1950s, Newell Company’s business consisted solely of manufactured curtain rods. Since the 1960s, however, the company diversified through acquisitions of businesses for paintbrushes, writing pens, pots and pans, hairbrushes, and the like. Over 90% of its growth is attributed to many small acquisitions and the subsequent restructuring and cost cutting Newell instituted. Usually within a year of the acquisition, Newell would bring in new leadership and install its own financial controller in the acquired unit. Then, three standard sets of controls were introduced: an integrated financial accounting system, a sales and order processing and tracking system, and a flexible manufacturing system. Once these systems were in place, managers were able to control costs by limiting expenses to those previously budgeted. Administration, accounting, and customer-related financial accounting aspects of the acquired business were also consolidated into Newell’s corporate headquarters to further reduce and control costs. However, Newell compensated business managers well for performance. They were paid a bonus based on the profitability of their particular unit—in fact, the firm’s strategy was to achieve profits, not simply growth at the expense of profits. Newell managers could expect a base salary...
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...9-704-491 REV: SEPTEMBER 2, 2005 CYNTHIA A. MONTGOMERY Newell Rubbermaid: Strategy in Transition Joe Galli, 43, was recruited to be the CEO of Newell Rubbermaid in January 2001, two years after the two companies were combined. His mission was to forge a turnaround after a string of disappointing earnings. As he moved ahead, Galli took a personal, hands-on approach. Always in motion, whether walking the aisles of retail stores, meeting with customers, or training his new cadre of managers, Galli’s energy seemed boundless. He strove to embody the attitudes and behavior he felt were vital to achieving his far-reaching agenda for the company. It was an agenda Wall Street seemed to like. In December, 2000, the month before Galli took over, Newell’s stock price dipped to $19.50; it closed at $35.99 in August of the following year.1 While still below the company’s historic high of $54.44 four years earlier, the momentum was forward.2 By the spring of 2003 Merrill Lynch, Prudential Financial, Fahnestock & Co., Inc. and Banc of America Securities maintained ‘buy’ ratings on the stock while Raymond James & Associates reiterated a ‘strong buy’. What did the future hold for the 100 year-old company? Newell’s Former Strategy Newel defines its basic business as that of manufacturing and distributing volume merchandise lines to the volume merchandisers. — Newell Company Strategy, 1967 In 1966, Daniel Ferguson became CEO of Newell Company, a privately held curtain rod manufacturer. At...
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...Anglia Ruskin University ------------------------------------------------- Lord Ashcroft International Business School ------------------------------------------------- Module MOD000921: ------------------------------------------------- Introduction to People, Organisations & Management ------------------------------------------------- ------------------------------------------------- Patchwork Text ------------------------------------------------- SID (1437809/1) ------------------------------------------------- Academic Year 2014/2015 TABLE OF CONTENTS After completing your assignment, you can update the table of contents below to correct the page numbers clicking on it with the right button (update field > update page numbers only). PATCH 1: PERSONALITY SELF-ASSESSMENT AND CAREER CHOICE 3 PATCH 2: LEARNING DIARY 7 PATCH 3: CASE STUDY REPORT 10 REFERENCES 11 APPENDIX 12 When the file is ready for submission, please delete al l instructions in red. PATCH 1: PERSONALITY SELF-ASSESSMENT AND CAREER CHOICE (1,000 words) The Big-5 Traits | Your score | Self-assessment | Openness to experience | 14 | The student is moderately open to experience.According to Costa and McCrae(1992) theory, she prefer to focus on more practical pursuits where she is interested in novelty when necessity commands, but not for too long because she does not stand out as either particularly imaginative, nor a conservative person, she has average drive and...
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