Newell Rubbermaid Strategy

Aleksandr Kazakov

MBA 591

11/07/14

Newell Company: Corporate Strategy

1. How was Newell’s corporate strategy successful? (Think about the common thread, or key resource and capabilities, in its businesses.)

Newell was founded in the early 1900’s as a manufacturer of brass curtain rods, and began supplying first local hardware stores, then chain retailers. The business grew and began selling curtain rods to various customers in the U.S. and Europe. When Daniel Ferguson became CEO in 1965, he looked to diversify the company and began by acquiring a smaller company in the same industry. In 1967, Ferguson outlined a strategy that focused on selling hardware and do-it-yourself merchandise to volume retailers. Looking at Newell’s history, we can see that the success of their strategy stemmed from focusing on what they do best, acquiring the right companies, and their operational efficiency.

Ferguson’s strategy for Newell from the start was to “build on what we do best”, and that was making high-volume but low cost products and sell them to large retailers. Newell already had relationships with stores such as Kmart and Woolworths and predicted more retail consolidation in the future. By 1997, the company was supplying various do-it-yourself products and hardware merchandisers such as Wal-Mart, Staples, and Home Depot. Newell understood the importance of shelf space when selling volume products, and looked for companies with established relationships with retailers when making acquisitions. Newell was so focused on its mission, that they would divest any business which did not fit strategically with the company’s mission.

The second reason thing that made Newell’s strategy so successful was the way in which they acquired other companies. Due to the increasing power of large retailers, Newell looked to grow through acquisition. Part of Newell’s strategy was acquiring companies with strong brands as well as companies that were either number 1 or 2 in their...