Newell Company: The Rubbermaid Opportunity In October 1998, Newell Company was considering a merger with Rubbermaid Incorporated to form a new company, Newell Rubbermaid Incorporated. The agreement would be through a tax-free exchange of shares valued at $5.8 billion. Newell had revenues of $3.7 billion in 1998 across three major product groupings: Hardware and Home Furnishings, Office Products, and Housewares. Rubbermaid is a renowned manufacturer of a wide range of plastic products ranging from
of Newell and Rubbermaid seems very attractive. Newell had a proven track record of acquiring companies and turning them around to deliver shareholder value. Since the 1960s, Newell had made over 35 strategic acquisitions of commodity producing manufacturing firms with low operating margins. Acquisitions usually added to shelf space, increase supplier power and rounded out Newell’s ‘good, better, best’ multiproduct offering. Also, acquired companies were typically market leaders. Rubbermaid was
Introduction In 1998, Newell Company set out to expand its revenue base through strategic acquisition of two major companies. Newell's CEO at that time was John McDonough, who was in charge of positioning the publicly traded company to an improved revenue base through differential product mix. The idea to broaden Newell Company through acquisition was an energetic and very optimistic strategic initiative to increase shareholder value in a shortened period of time. Unfortunately, the company compromised
they will not order it or they will start complaining to the company they ordered the product from. Delivery on time is a very important part of running a business such as Rubbermaid. 4. Do you think Newell acted too hastily in discharging Schmitt and other top executives so soon after the merger? Why or Why Not? I do believe Newell acted too hastily in discharging Schmitt and other top executives so soon after the merger. I believe this for many different reasons. First off, the two companies just
1) Does Newell have a successful Corporate Strategy? Does it add value to its business? Five forces –Tests This case has represented high rivalry due to the price war between the competitors of Rubbermaid and the corporations in the industry resulting in price reduction. The price the company was placing was high for the bargaining power of buyers. The buyers are home storages and commercial products which are bought by retailers and end-consumers. This is the reason why Rubbermaid could not
(Student No. 578723)Word Count: 996 Submission Date: May 15, 2012 | Table of Contents Table of Contents 2 1. Newell Case Study 3 Question 1: 3 Question 2: 4 Question 3: 4 Question 4: 5 List of References 6 1. Newell Case Study Question 1: Does Newell have a successful corporate-level strategy? Does the company add value to the business within its portfolio? Newell has a successful corporate-level strategy which has definitely proven itself over nine decades with annual revenue
Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its portfolio? Newell Company’s strategy is to acquire different companies that will help them grow their business in the basic home and hardware products industry before 1994 and started diversifying into unrelated field such as writing instruments and window treatments to grow the company as a whole. These companies are mostly underperforming and suffer from high cost thus Newell would
Newell Company was established in 1902 by Edgar A. Newell after he purchased a brass curtain rods manufacturer. From brass curtain rods, Newell then became a manufacturer for both home and hardware products (Montgomery, 2005). Over time, the organization developed a two pronged approach to strategy. The two approaches included; following an established acquisition process (Newellization) and progression over the company’s multiple divisions. "Newellization" can be described as the process the acquired
Newell Company Case Analysis Group: Nam, Xin, Shuyang Problem Statement: CEO John McDonough decided on making acquisition of Calphalon and Rubbermaid, which influent shareholders’ confidence. Newell Company’s Philosophy and Mission Newell Company created corporate advantages by following the company’s mission and philosophy. The philosophy "Build on what we do best" was started by CEO Mr. Dan Ferguson. This philosophy can be described as Newell focus on selling multiproduct to large mass
the mass retail stores. Newell's initial focus was on home and hardware products which later on expended to other markets. The company strategy was to grow and expand its product line through acquisitions, rather than internal growth. Before 1998 Newell acquired different companies in the basic home and hardware products industry and started diversifying into unrelated field such as children products, widow covering, writing instruments and others. The company was also looking to