Case Study Newell's Corporate Strategy

SM-II

ASSIGNMENT-3

Group-10

Manish Kumar (14PGP025)

Robin Singh (14PGP059)

Chythra TC (14PGP014)

Vivek Singh (14PGP054)

Q1. Does Newell have a parenting advantage (in other words, does it have a successful corporate strategy)? How does Newell create value, i.e. how does it enhance the competitive advantage of its businesses?

Ans. Newell’s strategy as written by Ferguson is to “identify its focus as the market for hardware and Do- It- Yourself products to volume merchandisers”.

GOAL - Newell’s goal is to increase its profitability and sales by offering a wide and exhaustive range of products and service to the mass retail channel.

Newell has chosen to expand through key acquisitions, rather than internal growth. The strategy

The key to the success is the process of Newellization which was mentioned earlier. Taking a glance at Exhibit – 3, the major acquisitions are in line with Newell’s goals, their product line and their strategy of expansion. And given the size of the company, the product line and number of successful acquisitions, it can be inferred that Newell has an effective corporate strategy.

Ways by which Newell enhance Competitive advantage of its business.

• Acquisition: Newell knew that to remain in the market and keep growing on year on year basis, it has to keep expanding and add new product lines to its business. Keeping this in mind Newell acquired different businesses having products in the hardware home products but different from those of Newell. This is clear from the case as Newell made 30 acquisitions in 20 years.

• Service Quality: Newell was known for its service quality, which keep them ahead of their competitors. One the question asked in the industry was ‘Do you ship as well as Newell’. Whenever an acquisition was made Newell get its service level up to Newell’s standards as soon as possible, for that the company was willing to carry larger inventories immediately following the

Discuss about Newell’s organization structure. How does Newell’s headquarters (corporate office) add value to the businesses?

Newell maintained a centralized administration at the corporate level. Since Newell has chosen the strategy to expand through acquisitions, ensuring Newellization and corporate continuity across the division are the key responsibilities of the organization structure it adopted. The basic functions like legal and tax issues, benefits, EDI, credit and collection, and financial control systems were administrated from this centralized corporate office.

Exhibit_8 shows the company’s organization chart as on October 1998. Board of directors chairman W.P Sovey followed by vice chairman & CEO J.J McDonough and president & COO T.A Ferguson represents the very top corporate leadership. Under them, top financial responsibilities were divided between two corporate executives: Vice President-Finance who managed outside asset and liability, and senior vice president-Corporate Controller who focused on internal operations. They reported directly to company president and president reported to CEO.

Value to the