1. In assessing Newell Company’s corporate-level strategy and whether the company adds value to the businesses within its portfolio, it is necessary to identify its overarching strategy and then explain it with context to how it affects the various businesses within the larger corporate body.
Newell Company’s main corporate-level strategy as defined by Dan Fergurson was “build on what we do best”. The company focused on growth through strategic acquisitions of firms that sold low cost and high volume products to large retailers, but that were underperforming due to high operating cost. After an acquisition, Newell would then change the existing operational systems of the firm to align it with its corporate structure. The aim was to
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Focused growth via streamlining strategic acquisitions was enabled by Newell’s appropriate use of available resources. One of Newell’s core competencies was its operational efficiency and its system of bringing acquired companies to its high standards of efficiency and profitability. Its success in the streamlining process can be seen from the rapidity with which changes were made and the results of the process. As stated in the case study, “Newellization” typically took “less than 6 months” to implement. After acquiring Anchor Hocking, the management from Newell achieved cost savings by letting go of unnecessary resources within the company such as its glass factory and its retail stores and introduced new systems which helped to bring about improved efficiency such as reducing its customer lead order period from “18 to 7 days”. While the businesses within Newell may have encountered issues due to the restrictions on innovative growth, they ultimately benefited from the focus on operational efficiency and cost savings resulting in higher operating margins.
Newell’s corporate-level strategy was reasonably dynamic relative to the environment. While it maintained a strict focus on certain goals, the corporate strategy was also modified to include new ideas that would ensure sustainable growth. This can be seen from the case where Newell’s growth strategy was expanded to include the international market, widening their acquisition target field to include