Newell free essay sample

These companies are suffering because they do not have major clients and there overhead costs are high. As Newell purchases these companies, they share their activities and costs with a major company reducing its cost and increasing revenue and profits. For this to work, they Newell’s needs to acquire companies with similar trades such as basic home and hardware products as they already have the client’s base to increase volume of sales. To further reduce the operating costs Newell also have strict control for the time the customers pay, this is within 30-45 days. They also have monthly meetings for avoid changes in there forecasted profits Newell transfers there skill such as technology and operation strategy to produce large amounts of the new acquired companies product and to assure they get delivered on time for their major clients. If there delivery is not on time, there penalties could get up to the value of profit there lost by not having the stock. We will write a custom essay sample on Newell or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Newell have the technology and skill that they delivery and stock amount is almost 100%. So therefore they use the basic corporate strategy of port-folio management, restricting, transferring skill and sharing activities to develop a successful corporate-level strategy and add value to the business. WHAT ARE NEWELLS DISTINCTIVE RESOURCES? There reputation is highly important as they want to be known to have the best products on the market and always delivered on time. There delivery is always on time and always had the available stock on hand for there customers with their well invested computers and communication hardware to meet demands. There technology is very advanced and there major customers place 90% of their orders through Electronic Data Interchange There have a good eye for acquiring new companies that have potential to make a profit as well as having a vast range of product that the customers are interested in. These products are sold with their major product to reduce their fixed costs, produce more and get delivered on time WHAT CHALLENGES FACED THE COMPANY IN THE LATE 1990’S? There challenges were to increase their productivity and delivery systems as they had three major customers (e. g. Mass-Mart) to supply to. They needed to meet all their orders and be delivered on time as major penalties could be occurred. The customers also had price power which meant that Newell needed to be more cost efficient to make profit as there prices were reduced by the major customers. They did this by improving their computer systems as mentioned above. The acquisition of two large firms, Calphalon and Rubbermaid, was challenge. It was a change to make these two companies work in Newell’s firm as Calphalon had different product from what Newell normally produces and Rubbermaid was a large company, bigger than the companies that Newell normally deals with. IN THIS CONTEXT, DOES THE ACQUISITION OF CALPHALON MAKE SENSE? RUBBERMAID? I think that the Acquisition of Calphalon is good as it has a well-established store that produces upper market aluminium cookware, which is the similar to Newell’s products. Calphalon has a good client base that will allow Newell to sell their current products to these clients to expand their product sales. Calphalon shares the same strategy as Newell which makes this acquisition ideal. These strategies are to have good customer services, have quality in their products to satisfy clients. These two companies are brand orientated rather than product. On the other hand I think Rubbermaid acquisition is not that good as they are a major company that Newell normally do not acquire, the problem is not that it is a large company, the problem is that they are a large company facing losses and poor performance. This will become difficult for Newell to transfer there strategy and improve Rubbermaid’s performance.