A strategy is a long-term plan that you create for your company to reach the desired, future state you

envision.
A strategy includes your company's goals and objectives, the type of products/services that you plan to build, the customers
who you want to sell to and the markets that you serve to make profits

These strategies are cost leadership, differentiation, and focus. The three types were discovered by the Harvard professor
Michael Porter and many works that discuss strategy refer back to his two books

Q1.How does the corporate office contribute towards Newel's performance or in other
words what value does the corporate office add?

 Newell had adopted to develop its product line through key acquisitions rather than
internal growth. All acquisitions are taken care at the corporate level so that the
divisions are not diverted from their core function of generating profit.
 Potential target firms undergo an intense screening process. They have to be par with
company’s existing performance criteria
 They bring up acquired companies by developing them to become cost efficient
through operational strategies and creating profits within a period of 18 months.
Some are done with a period of 6 months of time. Newell also have strict control for
the time the customers pay, this is within 30-45 days
 Corporate tightly controls the finances, yet it allows brand and division president
autonomy to guide the performance of the business.
 Corporate office does a good job of seamless linking of its structure, system &
processes (SSP) with its businesses and resources.
 The company attaches great importance to customer relations frequently inviting
buyers for plant visits.
 The companies Newell acquires have potential but undervalued. These companies are
suffering because they do not have major clients and there overhead costs are high.
 Newell focused on good communication within the company and had numerous
meetings throughout the year in order for leadership roles to remain informed about
other aspects of the company. Division leaders convened several times a year for
presidents’ meetings as well as the ability for regular encounters at trade shows
throughout the year.
 Other forms of communication were bracket meetings and the monthly collection of
operating figures. Bracket meetings were implemented if there were too many
variances within the budget.
 Salary was based on a uniform system across all divisions, which rewarded individuals
on the basis of their positions and the size of their divisions. All salaries for managers
were equal to the industry average, and bonuses could range from 33% for the most
junior manager of a division’s 20-person executive team, to 100% for division
presidents.
 The interviewing process was rigorous, once a potential employee was hired they
attended a two-day training program at the so-called “Newell University.” There were
also frequent opportunities for transfers and promotions in less than 10 years and all
job openings were publicized within the company. This kept the Newell knowledge
within the company and the ability to acquire informed top management was a much
easier process.
Q2. What was Newel trying to achieve by the acquisitions of Calphalon and Rubbermaid?
Do you think these were good acquisitions?

Acquisitions of Calphalon:
 Learn the expertise in developing pull strategies and building strong connections to
the end consumer.
 Broadened Newell’s access to the department and specialty store markets and
extended the company’s cookware product line to the top of the market.
 Newell decided to keep Calphalon lines in department and specialty stores. This
enabled WearEver, to remain the number one mass merchandiser brand within the
Newell lines.
 Honor the Calphalon contract with Target which was to display specially designed
fixtures

Although Calphalon acquisition will create value to Newell, it potentially can present
considerable challenges. There is a delicate balance between “Newellization” and protecting
the integrity of the Calphalon brand. The typical approach to “Newellization” has been one of
absorption. Newell keeps the brand name of the target firm and discards the existing people
and processes. Calphalon has built its brand equity, in large part, because of the efforts of its
sales force and its focus on educating retailers and end users on the product. If taken too far,
“Newellization” may erode Calphalon’s premium service and destroy the barrier of entry for
premium competitors at high end retailers.
Acquisitions of Rubbermaid:
 Newell believed that Rubbermaid and its brand names enhanced Newell’s
opportunities for globalization and internal growth.
 In the face of increasing market power of Newell’s primary customers, a need to buy
or develop stronger brands as required.
 Research showed that companies with market capitalization of $10 billion
commanded higher price/earnings multiples. This is acquisition it was goal was nearer.

The degree to which this acquisition adds value depends on Newell’s ability to absorb
Rubbermaid into its existing corporate structure. The sheer size of Rubbermaid (75% of
Newell’s revenue in 1997) points to a longer “Newellization” process than the standard 6
month period. If the “Newellization” process drags out, Newell will be forced to invest more
of its time and resources into integrating Rubbermaid. This may leave less time to focus on
new acquisitions. There is also a strong chance that absorbing Rubbermaid is the incorrect
approach to integration. Newell will need to work with the majority Rubbermaid’s existing
workforce and management team, there are simply too many to replace. If Newell were to
absorb Rubbermaid, it could risk alienating the new work force and destroy the processes
that promote new product development. Overall, we don’t think Rubbermaid is a smart
acquisition.