Mission :

To increase shareholders value by con. To build a company with superior EPS

growth & ROI, and to earn a reputation for excellance in performance &
management

Historyn

The

company grew and distributed its products through a variety of

distribution channels

Product Lineswell

sa
Office
Office
Products
Products

manufacturer and full service

marketer of consumer p

Serving the Mass Retailerrg

the needs of
volume purchasers

One of Newells Key strategies

Newell brands are in 5 of the top 15 retailers in the U.S.
Newell generates 15% of its revenue from Wal-Mart sales
Bargaining power of buyers (retailers) is significant in Newells industry
Newell has an excellent reputation with the mass retailers
Integration of newly acquired companies must be done efficiently and
quickly so reputation is maintained

Competitive Multi-Divisional Structure

Company Structure

Each division handles its own design, manufacturing, marketing, sales,

merchandizing, and service
Each division must adhere to the company strategy
Each division is responsible for its profit performance
Strict financial and operating reviews of divisions monthly
Management salary is based on performance
Internal growth is rewarded

SWOT Analysis

Strength

Diversity of products
Strong brand names
Horizontal acquisition strategy
Create market power and synergy
Divestiture and product line rationalization strategy
Opportunity
Growth and expansion with future acquisitions
Potential acquisitions provide potential expansion, growth, and success
International markets
Weakness
Competition in the industry is high

Newell is largereduces speed in response to events in external

environment
Financial weaknesses
Declining profit margin
ROIC & ROA declining
THREAT

Culture clash with new acquisitions

Integration difficulties can disrupt the company
Dependency on mass retailer
Threat of private labels
Lack of internal growth

Growth Strategies

Primary Objectives

Internal Strategy

Internal Growth is growth from continuing business owned more

than one year

Understanding Consumers
Demand Creation through Marketing
Commercializing innovative new products

Cross-selling existing product lines

Acquisition Strategy
2 + 2 4, if we do this right we get more than 4.

- Dan

Ferguson
Globalization Strategy

Global presence small in 1997, but growing

Selective international acquisitions
Growth of consumer brands economies in Eastern Europe, Asia, Mexico, and
South America
Overseas sales: Small
Target global consumer acceptance

Newellization Well-established profit improvement and productivity

enhancement process that is applied to integrate newly acquired product lines to
the parent company.

Raise
Raise Operating
Operating
Margins
Margins above
above 15%
15%

Acquisition Strategy
Newellization: newellizing acquired business into a Newell-like company.

Transition cycle:
Starts after 6 18 months
Led by brought-in president and controller
Focusing acquired business strictly on its core competencies

Newellization: Reducing corporate overhead through centralization of administrative

functions and tightening financial controls.

Centralize responsibilities:
Centralize Accounting system
Expenditures Approval
Cash management, A/R, A/P
Order processing
Data processing operations

Newellization: Establishing more focused business strategy,

improving manufacturing processes.
Enhancing efficiency
Eliminating non-productive lines
Reducing inventories
Increasing A/R turnover
Extending A/P terms
Trimming excess costs

Tools:

Leverage One Newell Rubbermaid

Building one common culture of shared values

Integrating common functional capabilities HR, IS, Finance, etc.

Consumer-meaningful branding

Focusing on pull-strategy
Investing in research
Creating demand around the world

Newell Corp. is looking to grow their company through 2 acquisitions:

Sanford Corporation

Expensive acquisition @ $600million.

Good management
Expansion in office products: plastic storage ,file storage box, school
supplies.
Has difficulty in absorbing excess capacity & efficiency creation.

LEVOLOR Corporation

Less significant acquisition, but important strategic move

Help Newell expand into upscale retailers channel
Bring discipline to financial, organizational, and manufacturing
aspects of Levelor

RESULTS
Acquistion of Sanford Corporation should be done on priority as it is

Profitable Organisation
Same distribution channels
Diversification of Newell
Increasing market share & new market