Newell Strategy

Was Newell right in acquiring Calphalon and Rubbermaid? Newell's strategy is making high-volume products at low cost and selling them to volume retailers. It normally looked for acquisitions that would add value to Newell's multiproduct offering and increases their importance as a supplier to volume retailers. Attractive acquisitions include brand-name staple products that will bring in more shelf space for Newell, and also small businesses to round out its existing product lines and consolidate industry …

…by Newell, Rubbermaid's problem of being lousy shippers and not being able to meet service requirements will be reduced. Newell is well-known for its prompt and efficient shipping and ability to meet retailers demand. Other than the ability of reducing costs through centralization of many of its administrative functions, Rubbermaid will also be able to gain more power over the major retailers through Newell's efficient distribution system and thus command higher prices over Rubbermaid's competitors.