Newell’s

Unending
Acquisition Streak
“The No Problem Supplier” ~ Walmart

Submission by Group 9

Aditya Prakash | Mayank Bharti | Muskan Atar | Satyam Mishra | Shivam Goel
Product Line:
Corporate Strategy
Hardware Home Furnishing: Value Creating Diversification:
❖ Window treatments
❖ Hardware & tools
❖ Picture frames
❖ Home Storage

Office Products:
❖ Markers
❖ Writing Instruments
Housewares:
Aluminum Cookware and Bakeware, Glassware, Hair Accessories
Diversification (Corporate):
Related Linked Diversification (Houseware have $850m (36%)
revenue, $2384 from other products )
- Sales and marketing was handled by individual
department
Both increase in product range and geography
- Related Production scale
- Mass merchandise manufacturing,
- Home related products (i.e. Home improvement objects
- Distribution channels are similar (i.e. Walmart, Kmart)
- Manufacturing Process can be replicated
- Fits good in the Newellization Construct
- Ops efficiency
- Lean Organization
- Scale and Partner Tie-ups)
 Strategic Fit

Similarities in Better off test- share value increasing

from 92-97.
● Distribution
● Supply chain Hence, positive.
● Customer Service-related activities

Acquisitions (Exhibit 3) : Rubbermaid & Calphalon (discussing in context to these acquisition)

 Newells` strategy
Optimization
(Why was Newell acquiring?)
Newells` strategy (Why was Newell acquiring?)

Integration
Newell`s mission was to make consumer products and serve the needs of volume
purchasers(i.e. Major retailers). Newell can either start from zero and enter business as a
new player or form alliance with existing firms. Newell focused on firms which had the
ability to align with Newell`s strategy and also at the same time increase profitability by
cost optimization.
Newell increased profitability by acquisition through following means:

1. Newellization:
Newellization ○ Cost optimization
○ Inventory optimization, Cross-docking, Integrated financial system
○ Sales and order processing system, flexible manufacturing system
○ Acquiring the most important asset – “the shelf space”

2. Increase in capitalization of firm to extract price premium

3. Globalization to increase global presence and support globalization of retailers
Economies of Scale like WalMart
+
Globalization
Newellization
 Existing Resource Gap
Calphalon Acquisition:
Expertise in developing pull strategies
and building strong connections to the
end consumer.
Why?

1. Share Calphalon`s expertise in developing How relevant are

pull strategies and building strong internal resources?

connections to the end consumer.

Low

How tradable are

2. To restrict Calphalon to target so that only target resources?
WearEver could compete with Newell`s
Benefits: “best” brand. Low

-Helps expand upscale Retailers Closeness with your

-Build expertise in Pull strategies resource partner.
3. Access to department and specialty store
-Strong connections with end
consumer
markets and extended company`s cookware High
-Prevents WearEver cannibalization product.
How well can you
integrate?
Weakness:
• Risky shift in strategy
• Significant SG&A expenses Acquire
 Existing Resource Gap
Expertise in developing pull strategies
Rubbermaid Acquisition: and building strong connections to the
end consumer.

How relevant are

internal resources?

Low
Why?
How tradable are
target resources?
● Greater Global presence and horizontal integration through broader product offering.
Low
● Increasing the self-space.
Closeness with your
resource partner.
● Scope for operational improvement resulting in growth in profit.

High

How well can you

integrate?
Benefits: Weakness:
Large but sick company Difficult to integrate due to Huge scale
– Accessibility to large shelf-space
– Similar distribution channels
– Diversification Acquire
– Demand around the world
THANKS
CREDITS: This presentation template was
created by Slidesgo, including icons by
Flaticon, infographics & images by Freepik

Appendix follows for Financial Analysis

Newell’s ROE
Calculation

CREDITS: This presentation template was

created by Slidesgo, including icons by
Flaticon, infographics & images by Freepik
 ROE Calculation

CREDITS: This presentation template was

created by Slidesgo, including icons by
Flaticon, infographics & images by Freepik
Calphalon

RubberMaid