Newell Company Case Essay

Newell Company created desegregated advantages by fol outseting the troupes mission and philosophy. The philosophy Build on what we do crush was started by CEO Mr. Dan Ferguson. This philosophy backside be described as Newell boil down on selling multi result to large mess sellers with high-volume and low- hail. Their mission is Newell is a manufacturer and full-service grocery storeer of consumer crossroads for serving the needs of volume purchasers. The follows philosophy and mission has a great influence on its strategies. Newell creates non-homogeneous strategies to accomplish the fix up mission. For example, one of Newells key strategies is serving the mass retailer. The scheme of skill helps to improve manufacturing processes in roll to get high-volume and low cost product. Newells strategies adjust with its philosophy and mission. It can create unified advantages in the industry. Moreover, the basic scheme of total Newell strategy is that merchandise a multi- product offering of brand-name staple consumers products, with an emphasis on excellent nodes service, in order to deliver the goods maximum results for our stockholders.The scholarship Rubbermaid and Calphalon enhanced Newells strength in terms of merchandise multiproduct offering and rise Newells brand popularity. However, with cast out feedback of Rubbermaids customers, Rubbermaids strategy of customer services could not conjunction with Newells mission and basic strategy that lead to a damaging influence on sh areholder satisfactions. Even though Calphalons antagonist Meyer defy the lour price than Calphalon, Caphalon is for the younger and much fashion lie market which is not efficient to use the low cost strategy for the high-end product, because Newell maybe unable to match the cost structure of the firm operate with less overhead and fewer product lines. According to the Newell acquision experience, Newells strategy is to acquire and integrate business which is n onfashion product, to acquire the caller-up for the fashion ortiented market is acquirementNewells strategy was to grow and expand their product line. In our opinion, the company is focused on more acquisition strategy than fundamental maturement which represents the true growth for the core of the company. This excludes any growth acquired from takeovers, acquisitions or mergers. Newell acquired different companies in the basics home and hardware products since 1996 (exhibit 3). According to Mergers and Acquisition article, acquisition bring ins the company by increasing Companys nurse and market power. Two companies together will generate synergy that improves revenue and cost saving of the company. Furthermore, acquisition can create shareholder care for as well because cardinal companies together are more valuable than two separate companies. Newell and acquiring companies wellbeing in many shipway from the acquisition. such as, development capabilities.The acquisitio ns allow Newell to add more products to its products line. It creates complement capabilities which two different abilities of the companies which fit well together. As the result, Newell is able to offer separate products of the same category to suit different customers. Moreover, in transferring its technologies to the acquiring companies, Newell has a technology advance such as EDI. The company is able to gestate products according to retailers request, making it more efficient, and improving its written report as a Good Shipper. later on acquisition, Newell transfers its technology to acquiring companies in order to deliver the products in an efficient way. Acquiring companies learn newfangled technologies from Newell and they both(prenominal) are able to develop the designing process. The company edit acquiring companies through and through a process of streamline as cognise as Newellization. Growth through acquisition is very profitable to Newells corporate strategy. Corporate presidencyCorporate governance is about managing company and defined as the statistical distri stillion of power in the company. Corporate governance is the trunk of rules, practices and process by which a company is directed and controlled. Newell corporate structure is made to maintain the flexibility in relations in the midst of corporate centers. The corporate office control and coordinate different aspects of a huge corporation working together. For example, the top fiscal responsibilities were divided betwixt two corporate executiveswho respectively take charge of the internal summons and external management.The profit of company is to function sure the integration for the financial. Normally, in that location is just one person who takes on the financial responsibility of the company which can lead to accounting fraud. At the same time, the two positions have responsibility to report to the CEO which enhances the supervision to the companys financial situat ion. In Newells company structure, the group president is one take aim below the company president. This structure benefits Newell because it centralizes subsidiaries and their cognitive operations. This centralization structure forms a whimsical manage system known as Newellization. NewellizationNewellizaiton is the process of streamlining focused on operational power and profitability. Newell got the opportunity to gain market share through the distribution channel from subsidiaries. Acquisition of Cornings housewares business in Europe, which is continuative with part of the companys vision of globoseization, effectively helped Newell to expand its distribution channels to gain great the market share in the global market. According to the case article of Newell Company, there are tercet categories systems to implement Newellization. The first is the integrated financial system, the second is the sales and order processing system, the third is flexible manufacturing syste m.Normally, Newell acquired subsidiaries to get more opportunities to gain greater access to distribution channels even though subsidiaries possess low-technology, non-seasonal, non-cyclical, and non-fashion products. Newellization was effectively integrated these companies by implementing systems to make the companies more energy and profitability. For example, the successful acquisition implement with Newellization is Anchor Hocking Company. Even though sales revenue of Newell was lower than Anchor Hockings sales revenue, but profit margin of Newell was higher(prenominal) than Anchor Hocking. Newellization improved the operational efficiency to manage the cost which is efficiency capability to the company.Newell dismissed the high-level Anchor executive, employees, reduced the number of the retail stores, reduced the excess inventory and eliminated the product line. Also, the improved operational efficiency help Anchor Hocking reduced the average length of time required to fill a customer order which is benefit to increasethe warring advantage of Anchor Hocking. For Rubbermaid, the Newellization can help the company to deal with the enigma on the inefficiency of operation and management. Financial ObjectivesIn the financial perspective, the first of financial objectives of Newell Company is achieved sales and earnings per share growth averaging 15% per year. However, nigh of companies were acquired by Newell company are regarded as inefficient on operate. Those acquired companies are manufactured low-technology, non-seasonal, non-seasonal, non-cyclical, non-fashionable products, which have more higher maintains cost in all(prenominal) individual company. Therefore, most of companies have high sales revenue but with high cost that resulting in the less 10% operating margins. After Newell Company made an acquisition, with the consolidation and centralization management, not only study more profit for Newell Company but also saving more operation cost A lso, it is the reason why Newellization is regarded as an efficient operating method by acquisition multiple products.Therefore, the ultimate target is to achieve maximum earning per share (EPS) for Stockholders. Newellization bring a remarkable success for Newell Company, however, with the assertive of Newellization, the negative business influence show up, such as, in the gift 4, the newell company net sales decrease from 1992 to 1997. According to the article of navigating a path to smart Growth, there are two limits can restrict growth in order to gain maximum growth of company, including financial limits and managerial limits. According to course material of merger and acquisition, the benefit of acquisition for Newell Company is to gather opposite multiple product strength to increase profit. In details, Newell company can adjust introduce companys mislead cost structures in order to make all acquisition consistently with Newell efficient and effective management model.For Newell, Calphalon has a good brand which is benefit for Newell to expand their distribution channel. However, Rubbermaid has the bad personality on the customer service which will influence the reputation of the no problem supplier in the industry. At the same time, Putting both Calphalon and Rubbermaid under the same roof of Newell is a great risk for integrate the two companies, because it will be hard for Newell to impletment the Newellization which is the mature and experienced method tointegrate the new company they acquired.Resources and CapabilityOne of Newell crucial resources is stash away multiproduct from various industries including hardware, house ware, home furnishings, and office product. In addition, one of Newells capabilities comes from the acquisition of other companies. There are example is Newell reward system in 1990 Newell changed its motivators structure by adding a bonus for internal growth on the top of existing return on assets (ROA) goals which facilit ated Newell is ability its to increase their accountability capability. The reason why Newell implemented the bonus structure is that new reward system more cerebrate to the performance of the company. The Newell University plays an important role for the company by helping which is benefit for the company to increase the strategic unity capability, learning capability and the leading capability through training the Newells mangers to understanding corporate cultural, focus on core product and profit-orientation. At the same time, most of the mid-level executives from other customer goods companies would take the particular management traits before they were accepted by Newell which also build the good foundation for the leadership capacity.Meanwhile, to leverage the resource, Newell advisedly moves managers across the business unites and from the business to the corporate level. This special character for Newell is benefit for the company to increase the efficiency of the resour ce by the collaboration capacity. Also, McDonough hold the communication with their major customers to build the relationship which represent Newells safe customer connectivity capacity. According to the competitor for Calphalon of Meyer, Calphalon has the better customer service which is their war-ridden advantage. Meanwhile, after the acquisition, Newell can share the customer connectivity capability with Calphalon which enhance the Newells competitive advantage. For Newell to acquire Rubbermaid which has good brand equity, and the product innovation capabilityis benefit for adding the different kind of resource for Newell. Even though Rubbermaid have the innovation capabilitywhich is benefit for the Newell Company, the Rubbermaid products are more technologic than Newell products. This acquision might bring Newell high cost on the research and development.ConclusionCalphalon and Rubbermaid acquisition just partially align with corporate strategies. Newells mission is a core pu rpose of the company that influences to create resources, businesses and organization structure. Many acquisitions fit to corporate strategies enlarge and branch out range of products, but still focus on their core product that low technology, non-seasonal, non-cyclical, non-fashion products. Newellization has a profound influence on Newell growth in terms of managerial, operational, and financial effect, which gathers more capitals from shareholders.Recommendation1. To balance between Newellization and defend the integrity of the Calphalon 2. Use the customer connectivity capabilityto create the good reputation for customer service of Rubbermaid 3. Use part of the Newellization to help Runnermaid to solve the problem of the inefficiency of operation and management 4. Organic growth instead of focuing on the expaning by acquision.