Newell’s goal is to use the mass retail channel to increase its sales and profitability by offering a comprehensive range of products and reliable services. Newell has chosen to develop its product line through key acquisitions, rather than internal organic growth. They feel that they have the ability to apply their expertise in cost reduction and manufacturing to convert low margin manufactures into profitable ones. Their strategy to follow an established acquisition process and ensure that corporate goals/standards are met within each acquired company. All acquisitions are overseen by corporate to ensure that the Newell method is followed. This strategy helps Newell successfully diversify their portfolio of products for mass retailers. Newell’s key resources are designed around the company’s …show more content…
As part of company’s control strategy, corporate controls the finances, but allows brand and division presidents to guide the performance of the business. The sales, manufacturing, and HR systems, performance review, bracket meetings are all brand controlled to help create consistent and predictable brands that help Newell maintain its competitive advantage. The addition of Calphalon to Newell’s creates value for by extending its product offerings outside of the mass merchandise market. This approach allows Newell to capitalize on a product with strong brand recognition without competing with it’s existing cookware at mass retailers. By acquiring a company that has core proficiencies in the high end retail segment, Newell is attempting to branch out into a non-saturated market where products haven’t reached critical mass. Newell can apply its capabilities of cost reduction and streamlining to control Calphalon’s increasing COGS and high SG&A (36%) expenses. At the same time they can maintain the target firm’s internal competencies that have made the brand successful to this