Newell Company: Corporate Strategy

Newell’s Specifics
Core Strategy

• Acquire top 1 / 2 companies in the market & improve through an

integrated financial system
• A sales & order processing system, & a flexible manufacturing system
• Improve profitability
• Low technology, nonseasonal, noncyclical, on fashionable products on
shelf space

Tool: Strict financial control on payment cycles: 90 days to 45 days Credit

basis
 Strength
The Newellization process
Diversified product line and Range (Multi-product
offering)
Timely Delivery to Client by Newell Co.
Weakness
SWOT Decline in Profitability

Analysis Threat
Rapid acquisition competitors.
Healthy private-label competition of Calphalon
Opportunity
The company has the possibility of growth through
acquisitions
Expansion in International markets
 Products
• Many products, diverse segments good, better, best
products always on shelf.  

Geography
Level of • US geography till 1990s. Now focus on expanding global:
Diversificatio Acquired Corning housewares in Europe, the middle east,
Africa & related foreign markets. Rotring German
n manufacturer of writing instruments, Panex, cookware
manufacturer in Brazil. With Rubbermaid around 25% of
sales. & US mass marketers also expanding in global
markets.  

Related
• Brass Rod, & Window Fixtures : Consumer, market linkage.   
Compare with performance
 Advantages
• Pull strategy expertise
• Connections with consumers
• Never focused on volume sales but opportunities to build
relations with sellers

Synergy -
Conflicts
Calphalon • Niche Market
• Customers are not merchandisers
• Resources: Specialized & Not easily transferrable
• High SG&A: Different culture

Strategy : Buy out competition and leverage increasing the sales channel
 • Brand equity and product innovation
• 33% of revenue from new products
• Increasing revenue, decreasing profits

Synergy - • Lousy shippers, high cost, terrible fill rates

• Bad service quality
Rubbermaid • Large – as big as Newell

Strategy: Increasing the related portfolio

Relatedness Profit Percentage of Newell
Moderate Housewares
11%
10%
9%
9% 9% 9%

20%

33%

46% 1992 1993 1994 1995 1996 1997

Aluminum Cookware and Bakeware Glassware and Plasticware (Plasticware sold 1998)
Hair Accessories

Office Supplies Hardware division Division Wise sales

10% 11%
26%
26%

23% 24% 46%

67%

38% 28%

Hardware and Tools Window Treatments

Markers and Writing Instruments Office storage/organization
Picture Frames Home Storage House Wares Office Products Hardware division
School Supplies and Stationery (sold 1998)
 Financial Control & Strategic Planning

• Strategizing at corporate level to maximize utilization o

resources (exploiting it)
• Hand up approach: Only allocating and not interfering
much. Subsidiaries will work in alignment with vision and
Parenting mission.

Role
Identify Problematic SBUs/Segments
• Sold Plastic wares, school supplies division
What can we do to improve corporate
parenting?