Newell Case Essay

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Newell Company: The Rubbermaid Opportunity What are the common denominators of Newell’s businesses, for example, their markets, strategies and operations? Newell is a large manufacturer of a wide range of products. The company supplies its low cost portfolio of products to retailers like Wal Mart. Instead of focusing merely on internal growth, the company looks for new horizons of businesses by expanding externally through acquisitions. Firms that are deemed suitable for acquisition undergo “Newellization” process in less than 18 months after acquisition. This process ensures successful integration of new companies with the parent company. Businesses that are not in line with the corporate strategy were given up even if they were profitable. The strategy is to acquire undervalued companies with mature markets and diverse product lines. The strategy of the company is largely driven by the needs of mass retailers. With the advent of large scale mass retailers like Wal-Mart and K-Mart, the bargaining power of retailers over their suppliers increased. Their demands of timely delivery of high quality merchandise at a low price had to be met if the suppliers wanted to survive in the market. Since the relations of mass retailers were very long term and marked with high volume merchandise sale, loss of a single client could translate into huge losses. The very survival of the company became questionable if it does adjust to the ever changing needs of the retail markets. The mass retailers needed a supplier that could rapidly respond to the trends in the market by updating the product mix. Newell responded to this need by adopting the strategy of growth through acquisitions. Just in time delivery system was adopted to cater to the needs of mass retailers. The implementation of JIT requires a high level of efficiency in operations and data management.

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