Newell Co.: Corporate Strategy – Case Solution

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Newell Co.: Corporate Strategy Case Answers

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Executive summary- Newell Co.: Corporate Strategy

Newell Co. used acquisition as its corporate strategy and has acquired more than 20 companies to grow and diversify. The purchase increased the product offerings to the big retailers and also increased the chances of global expansion.

The company has increased its market through such a strategy. It conducts a process called ‘Newellization’ to align the corporate goals of the acquired companies with its own purpose.

Newell Co. has followed the philosophy explained by Dan Ferguson, “build on what we do best.” The acquisition of Calphalon and Rubbermaid has been illustrated in the case.

SWOT Analysis

Strength

• The Newellization process
• Diversified product line and Range (Multi-product offering)
• Timely Delivery to Client by Newell Co.

Weakness

• Decline in Profitability

Threat

• Rapid acquisition competitors.
• Healthy private-label competition of Calphalon

Opportunity

• The company has the possibility of growth through acquisitions
• Expansion in International markets

Five Forces Model Analysis

• Competitive Rivalry is high.
• The threat of new entrants is moderate.
• The threat of substitutes is moderate.
• The bargaining Power of Customers of Newell Co. is high.
• Bargaining Power of Suppliers is Low.

Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its portfolio?

The Corporate Strategy Triangle

We may conclude that the corporate strategy of the company has been successful. Newell focused on acquisition as its corporate strategy rather than applying internal growth strategies, the process which they call ‘Course Correction.’

It generally acquires reputed companies that haven’t excavated their profit-making potential. It employed an aggressive two-pronged strategy wherein it acquired 30 significant businesses in 20 years.

It acquired Calphalon and Rubbermaid to increase its product line. Though such steady acquisitions came with their own repercussions and challenges, the challenges outweigh the growth it brought to Newell Co. that probably any internal growth strategy wouldn’t have brought.

The Newellization process adopted by the company was a significant reason for the success of its corporate strategy. It helped them to transfer their skills, technology, and operational measures to the company they acquired and align them with Newell’s corporate strategy to create a synergy that will, in turn, bring cost efficiency.

This also ensures that the products reach the clients on time. Thus, timely delivery gives Newell Co. a competitive edge. Also, it implemented centralization and consolidation strategies to be successful.

The acquisitions were made mainly of low technology, non-seasonal, non-cyclical, nonfashionable products. The products they produced were very generic, like paintbrushes, office utilities, etc., that had nothing to do with the…