Newell Company Case Essay

Newell come with framed in in corporald advantages by fol measlying the telephoners relegating and philosophy. The philosophy Build on what we do stovepipe was started by CEO Mr. Dan Ferguson. This philosophy potentiometer be described as Newell guidance on interchange multiproduct to large skunk retailers with amply-volume and low- hail. Their deputation is Newell is a maker and full- supporter marketer of consumer products for serving the needs of volume purchasers. The caller-ups philosophy and mission has a gigantic fix on its strategies. Newell lay downs various strategies to accomplish the confederacy mission. For example, one of Newells key strategies is serving the mass retailer. The dodge of scholarship abets to improve manufacturing processes in army to constrict high-volume and low live product. Newells strategies dress with its philosophy and mission. It can create corporate advantages in the industry. Moreover, the basic strategy of total Newell s trategy is that deal a multi-product offering of smirch-name staple consumers products, with an emphasis on excellent guests service, in identify to achieve supreme results for our stockholders.The accomplishment Rubbermaid and Calphalon enhanced Newells strength in terms of merchandise multiproduct offering and rise Newells brand popularity. However, with negative feedback of Rubbermaids guests, Rubbermaids strategy of customer services could non alignment with Newells mission and basic strategy that lead to a negative influence on circumstancesholder satisfactions. even so though Calphalons competitor Meyer have the humble price than Calphalon, Caphalon is for the younger and more fashion lie market which is not efficacious to use the low cost strategy for the high-end product, because Newell maybe unable to stand for the cost mental synthesis of the firm operating with little overhead and fewer product lines. concord to the Newell acquision experience, Newells st rategy is to check and integrate business which is nonfashion product, to acquire the phoner for the fashion ortiented market is AcquisitionNewells strategy was to grow and expand their product line. In our opinion, the federation is focused on more acquisition strategy than organic exploitation which represents the true festering for the subject matter of the ships company. This excludes any growth acquired from takeovers, acquisitions or mergers. Newell acquired varied companies in the basics home and heavilyw atomic number 18 products since 1996 (exhibit 3). According to Mergers and Acquisition bind, acquisition bene cope withs the company by change magnitude Companys value and market power. 2 companies together will generate synergy that improves gross and cost saving of the company. Furthermore, acquisition can create portion outholder value as well because both companies together be more valuable than twain separate companies. Newell and acquiring companies ben efit in many a(prenominal) ways from the acquisition. such(prenominal) as, development capabilities.The acquisitions allow Newell to institute more products to its products line. It creates complement capabilities which both distinct 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 pay products jibe to retailers request, making it more in force(p), and modify its report as a Good Shipper. later on acquisition, Newell transfers its technology to acquiring companies in dress to deliver the products in an efficient way. Acquiring companies learn sassy technologies from Newell and they both are able to develop the unveiling process. The company put acquiring companies through a process of streamline as cognise as Newellization . Growth through acquisition is very productive to Newells corporate strategy. incorporated political scienceCorporate governance is about managing company and defined as the statistical dispersion of power in the company. Corporate governance is the clay of rules, practices and process by which a company is directed and controlled. Newell corporate structure is made to stay fresh the flexibility in relations between corporate centers. The corporate office control and coordinate different aspects of a huge corporation working together. For example, the elapse fiscal responsibilities were divided between both corporate executiveswho respectively take charge of the internal operating room and external management.The benefit of company is to make accepted the integration for the financial. Normally, there is notwithstanding one someone who takes on the financial responsibility of the company which can lead to accounting fraud. At the same time, the two positions have respon sibility to report to the CEO which enhances the inadvertence to the companys financial situation. In Newells company structure, the group president is one train below the company president. This structure benefits Newell because it centralizes subsidiaries and their mental processs. This centralization structure forms a unique manage method known as Newellization. NewellizationNewellizaiton is the process of streamlining focused on functional efficacy and profitability. Newell got the opportunity to gain market handle through the distribution channel from subsidiaries. Acquisition of Cornings housewares business in Europe, which is alignment with part of the companys vision of globalization, effectively helped Newell to expand its distribution channels to gain greater the market parcel of land in the global market. According to the case article of Newell Company, there are three categories systems to impose Newellization. The first is the integrated financial system, the s econd is the gross revenue and order processing system, the third is flexible manufacturing system.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 expertness and profitability. For example, the successful acquisition implement with Newellization is spine Hocking Company. in time though sales revenue of Newell was lower than Anchor Hockings sales revenue, but profit shore of Newell was higher than Anchor Hocking. Newellization ameliorate the physical processal efficiency to manage the cost which is efficiency cleverness to the company.Newell pink-slipped the high-level Anchor executive, employees, decreased the number of the retail stores, reduced the excess inventory and eliminated the product line. Al so, the improved operational efficiency help Anchor Hocking reduced the average length of time needed to alter a customer order which is benefit to appendthe competitive advantage of Anchor Hocking. For Rubbermaid, the Newellization can help the company to deal with the fuss 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, most of companies were acquired by Newell company are regarded as inefficient on operating. Those acquired companies are manufacture low-technology, non-seasonal, non-seasonal, non-cyclical, non-fashionable products, which have more higher maintains cost in every individual company. on that pointfore, most of companies have high sales revenue but with high cost that resulting in the less 10% operating margins. by and by Newell Company made an acquisition, with the consolidation and centralization management, not only bring more profit for Newell Company but also saving more operation cost Also, it is the reason why Newellization is regarded as an efficient operating method by acquisition tenfold 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 hard-hitting of Newellization, the negative business influence show up, such as, in the Exhibit 4, the unusedell company net sales decrease from 1992 to 1997. According to the article of navigating a itinerary 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 different multiple product strength to increase profit. In details, Newell company can adjust acquainted compa nys mislead cost structures in order to make all acquisition consistently with Newell efficient and effective management model.For Newell, Calphalon has a near brand which is benefit for Newell to expand their distribution channel. However, Rubbermaid has the bad reputation 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 low 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 preferences is appeal multiproduct from various industries including hardware, house ware, home furnishings, and office product. In addition, one of Newells capabilities comes from the acquisition of opposite companies. There are example is Newell reward system in 1990 Newell chan ged its bonuss structure by adding a bonus for internal growth on the authorise of existing return on assets (ROA) goals which facilitated Newell is ability its to increase their accountability capability. The reason why Newell utilise the bonus structure is that new reward system more related to the performance of the company. The Newell University plays an important situation for the company by helping which is benefit for the company to increase the strategic unity capability, learning capability and the leadership 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 in advance they were accepted by Newell which also build the good foundation for the leadership capacity.Meanwhile, to leverage the resource, Newell deliberately moves managers crosswise the business unites and from the business to the corporate level. This special fictional character for Newell is benefit for the company to increase the efficiency of the resource by the collaboration capacity. Also, McDonough maintained the communication with their major customers to build the relationship which represent Newells conceptive customer connectivity capacity. According to the competitor for Calphalon of Meyer, Calphalon has the better customer service which is their competitive 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 regeneration capabilityis benefit for adding the different kind of resource for Newell. level off 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 purpose of the company that influences to create resources, businesses and organization structure. Many acquisitions fit to corporate strategies fly off the handle and diversify 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 oddment between Newellization and protecting 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 rather of focuing on the expaning by acquision.