1. Does Newell have a successful corporate-level strategy? Does the company add value to
the businesses within its portfolio?
Newell Companys 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 put these companies through a process of streamlining,
focusing on operational efficiency and profitability, and this process know as
Newellization would align these companies to Newells own cost structure and processes in
less than 18 months. Newell also acquire small businesses to round out their existing
product lines and consolidate industry capacity.
This two-pronged strategy proved to be quite successful as Newell acquired more than 40
major businesses till 1998. The company acquiring strategy allowed them to add business
that are similar in nature to its portfolio and thus consolidate industry capacity. Such a
move allows them to enjoy economies of scale but offering differentiated products of the
same category to suit different customer as a result. Newellization includes transferring
higher technology from Newell to these companies that had been acquired and thus they
are able to supply goods in faster time while quality of the products is not being
compromised. These companies do not have such system and process and also do not have
bargaining power with companies and thus higher cost is incurred by them and the
