Case Study Description of Newell Co.: The Rubbermaid Opportunity
The Newell Co., a multibillion dollar company dealing in hardware and home furnishings, office products, and housewares, was contemplating a merger with Rubbermaid, a renowned manufacturer of plastic products. Newell had a remarkable record of success in growth by acquisition. Rubbermaid would mark a quantum step in this program, but equally, would pose a formidable challenge to Newell's capacity to integrate and strengthen acquisitions. Corporate strategy and advantage is studied, particularly through the Collis and Montgomery framework, to determine whether the proposed merger is a step too far.
Swot Analysis of "Newell Co.: The Rubbermaid Opportunity" written by Joseph N. Fry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rubbermaid Newell facing as an external strategic factors. Some of the topics covered in Newell Co.: The Rubbermaid Opportunity case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Newell Co.: The Rubbermaid Opportunity casestudy better are - – wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing energy prices,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Newell Co.: The Rubbermaid Opportunity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Newell Co.: The Rubbermaid Opportunity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rubbermaid Newell, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rubbermaid Newell operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Newell Co.: The Rubbermaid Opportunity can be done for the following purposes –
1. Strategic planning using facts provided in Newell Co.: The Rubbermaid Opportunity case study
2. Improving business portfolio management of Rubbermaid Newell
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rubbermaid Newell
Strengths Newell Co.: The Rubbermaid Opportunity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rubbermaid Newell in Newell Co.: The Rubbermaid Opportunity Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Newell Co.: The Rubbermaid Opportunity Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Rubbermaid Newell has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rubbermaid Newell has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Rubbermaid Newell is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Rubbermaid Newell is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Newell Co.: The Rubbermaid Opportunity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Rubbermaid Newell is present in almost all the verticals within the industry. This has provided firm in Newell Co.: The Rubbermaid Opportunity case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Rubbermaid Newell has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rubbermaid Newell to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Rubbermaid Newell is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Rubbermaid Newell is one of the most innovative firm in sector. Manager in Newell Co.: The Rubbermaid Opportunity Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Rubbermaid Newell has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Newell Co.: The Rubbermaid Opportunity Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Rubbermaid Newell is one of the leading recruiters in the industry. Managers in the Newell Co.: The Rubbermaid Opportunity are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Rubbermaid Newell in the sector have low bargaining power. Newell Co.: The Rubbermaid Opportunity has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rubbermaid Newell to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Newell Co.: The Rubbermaid Opportunity firm has clearly differentiated products in the market place. This has enabled Rubbermaid Newell to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Rubbermaid Newell to invest into research and development (R&D) and innovation.
Analytics focus
– Rubbermaid Newell is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Joseph N. Fry can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Newell Co.: The Rubbermaid Opportunity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Newell Co.: The Rubbermaid Opportunity are -
Increasing silos among functional specialists
– The organizational structure of Rubbermaid Newell is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Rubbermaid Newell needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rubbermaid Newell to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Rubbermaid Newell has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Newell Co.: The Rubbermaid Opportunity, in the dynamic environment Rubbermaid Newell has struggled to respond to the nimble upstart competition. Rubbermaid Newell has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Rubbermaid Newell products
– To increase the profitability and margins on the products, Rubbermaid Newell needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Rubbermaid Newell, firm in the HBR case study Newell Co.: The Rubbermaid Opportunity needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Newell Co.: The Rubbermaid Opportunity has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Rubbermaid Newell 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rubbermaid Newell is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Newell Co.: The Rubbermaid Opportunity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Rubbermaid Newell needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Joseph N. Fry suggests that, Rubbermaid Newell is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Rubbermaid Newell has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Newell Co.: The Rubbermaid Opportunity HBR case study mentions - Rubbermaid Newell takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Newell Co.: The Rubbermaid Opportunity | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Newell Co.: The Rubbermaid Opportunity are -
Building a culture of innovation
– managers at Rubbermaid Newell can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Rubbermaid Newell can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Rubbermaid Newell has opened avenues for new revenue streams for the organization in the industry. This can help Rubbermaid Newell to build a more holistic ecosystem as suggested in the Newell Co.: The Rubbermaid Opportunity case study. Rubbermaid Newell can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Rubbermaid Newell can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rubbermaid Newell can use these opportunities to build new business models that can help the communities that Rubbermaid Newell operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Rubbermaid Newell can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rubbermaid Newell is facing challenges because of the dominance of functional experts in the organization. Newell Co.: The Rubbermaid Opportunity case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Rubbermaid Newell to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Rubbermaid Newell can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Rubbermaid Newell has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Newell Co.: The Rubbermaid Opportunity - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rubbermaid Newell to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Rubbermaid Newell in the consumer business. Now Rubbermaid Newell can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rubbermaid Newell can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Rubbermaid Newell to increase its market reach. Rubbermaid Newell will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Newell Co.: The Rubbermaid Opportunity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Newell Co.: The Rubbermaid Opportunity are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Rubbermaid Newell needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Rubbermaid Newell can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Rubbermaid Newell needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Rubbermaid Newell in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Rubbermaid Newell demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Rubbermaid Newell has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Rubbermaid Newell needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Rubbermaid Newell needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Rubbermaid Newell can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Rubbermaid Newell
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Rubbermaid Newell.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Rubbermaid Newell.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rubbermaid Newell can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Newell Co.: The Rubbermaid Opportunity .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Rubbermaid Newell is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Rubbermaid Newell will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Newell Co.: The Rubbermaid Opportunity Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Newell Co.: The Rubbermaid Opportunity needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Newell Co.: The Rubbermaid Opportunity is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Newell Co.: The Rubbermaid Opportunity is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Newell Co.: The Rubbermaid Opportunity is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Rubbermaid Newell needs to make to build a sustainable competitive advantage.