1.

Use the Collis and Montgomery corporate strategy model to describe the Newell corporate
strategy. In particular :
What are the common denominators of Newell's businesses, of, for example, their
markets, strategies and operations?
What are the critical corporate resources at Newell that are shared by or transferred
among the businesses?
How does Newell corporate handle the coordination and control of the business units?
Does the Newell corporate strategy create corporate advantage?
2. What makes a good acquisition target for Newell? What does success in newellization
depend upon?

3. Take the position of a member of the Newell Board.
On the basis of your understanding of Newell's strategy and the newellization process,
does Rubbermaid look like a good merger prospect?
Are the projected benefits of the merger credible? Is the proposed price reasonable?
Are the risks acceptable?
How would you vote on this matter?

Common denominators for Newells businesses
- Mature businesses with unrealized profit potential
- Product lines were low in technology, fashion and seasonal content.
- Sold through mass distribution channels
- Established shelf space with major retailers
- Long product life cycle
- Had the potential to reach newels standard of profitability
Critical corporate resources
- Superior service to its mass merchandise customers
- Industry leading quick response
- On time in full delivery
- Ability to implement sophisticated tie ins with customers extending to vendor managed
inventories
- Provision of marketing and merchandising programs for product categories that
encompassed good better and best lines
Coordination and control
- It transfers critical resources across the firm without undermining the independence of its
business units
- It creates a talent pool and members move within the divisions bringing their operational
knowledge from the old place to the new.
- The only things shared is the data management system EDI.
- Newell does both operational as well as cost control.
- Operational control is done by leveraging the experience of its senior managers who bring
many efficient practices to the table
- Cost control is done by adhering to strict goals for operating margins of 15% and SG&A costs
of 15%
Yes newells corporate strategy creates a strategic advantage because there is a fit between the parent
and the businesses that it acquires and it creates tangible value addition to the businesses it acquires.
When a company's resources are critical to the success of its businesses, the result is competitive
advantage. When the organization is configured to leverage those resources into the businesses,
synergy can be captured and coordination achieved. Finally, fit between a company's measurement and
reward systems and its businesses produces strategic control.