Case Study Description of Newell Co.: Corporate Strategy
In 1998, Newell Co., a manufacturer of low-tech, high-volume consumer goods, acquired Calphalon Corp., a high-end cookware company, and Rubbermaid, a $2 billion manufacturer of consumer and commercial plastic products. The case focuses on Newell's strategy and its elaboration throughout the organization, as well as the importance of selecting appropriate acquisitions to grow the company. Do Calphalon and Rubbermaid fit with the company's long-term strategy of growth through acquisition and superior service to volume customers? A rewritten version of an earlier case.
Authors :: Cynthia A. Montgomery, Elizabeth J. Gordon
Swot Analysis of "Newell Co.: Corporate Strategy" written by Cynthia A. Montgomery, Elizabeth J. Gordon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Calphalon Rubbermaid facing as an external strategic factors. Some of the topics covered in Newell Co.: Corporate Strategy case study are - Strategic Management Strategies, Mergers & acquisitions, Risk management, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Newell Co.: Corporate Strategy casestudy better are - – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing energy prices, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, wage bills are increasing, there is increasing trade war between United States & China,
there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Newell Co.: Corporate Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Newell Co.: Corporate Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Calphalon Rubbermaid, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Calphalon Rubbermaid 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.: Corporate Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Newell Co.: Corporate Strategy case study
2. Improving business portfolio management of Calphalon Rubbermaid
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 Calphalon Rubbermaid
Strengths Newell Co.: Corporate Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Calphalon Rubbermaid in Newell Co.: Corporate Strategy Harvard Business Review case study are -
Training and development
– Calphalon Rubbermaid has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Newell Co.: Corporate Strategy 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.
Innovation driven organization
– Calphalon Rubbermaid is one of the most innovative firm in sector. Manager in Newell Co.: Corporate Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Calphalon Rubbermaid is one of the leading recruiters in the industry. Managers in the Newell Co.: Corporate Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Calphalon Rubbermaid 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 Calphalon Rubbermaid is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Newell Co.: Corporate Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Calphalon Rubbermaid in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Calphalon Rubbermaid has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Calphalon Rubbermaid to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Calphalon Rubbermaid is present in almost all the verticals within the industry. This has provided firm in Newell Co.: Corporate Strategy 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.
Successful track record of launching new products
– Calphalon Rubbermaid has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Calphalon Rubbermaid 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Calphalon Rubbermaid digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Calphalon Rubbermaid has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Newell Co.: Corporate Strategy 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.
Ability to lead change in Strategy & Execution field
– Calphalon Rubbermaid is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Calphalon Rubbermaid in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Newell Co.: Corporate Strategy firm has clearly differentiated products in the market place. This has enabled Calphalon Rubbermaid to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Calphalon Rubbermaid to invest into research and development (R&D) and innovation.
Weaknesses Newell Co.: Corporate Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Newell Co.: Corporate Strategy are -
High bargaining power of channel partners
– Because of the regulatory requirements, Cynthia A. Montgomery, Elizabeth J. Gordon suggests that, Calphalon Rubbermaid 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.
High cash cycle compare to competitors
Calphalon Rubbermaid has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Calphalon Rubbermaid has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Calphalon Rubbermaid even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Newell Co.: Corporate Strategy HBR case study mentions - Calphalon Rubbermaid 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Newell Co.: Corporate Strategy, it seems that the employees of Calphalon Rubbermaid don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Need for greater diversity
– Calphalon Rubbermaid has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Calphalon Rubbermaid products
– To increase the profitability and margins on the products, Calphalon Rubbermaid needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Calphalon Rubbermaid 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.
Capital Spending Reduction
– Even during the low interest decade, Calphalon Rubbermaid has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Calphalon Rubbermaid, firm in the HBR case study Newell Co.: Corporate Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Calphalon Rubbermaid 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.
Opportunities Newell Co.: Corporate Strategy | 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.: Corporate Strategy are -
Manufacturing automation
– Calphalon Rubbermaid can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Calphalon Rubbermaid can use these opportunities to build new business models that can help the communities that Calphalon Rubbermaid operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Calphalon Rubbermaid 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Calphalon Rubbermaid 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.
Buying journey improvements
– Calphalon Rubbermaid can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Newell Co.: Corporate Strategy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Calphalon Rubbermaid can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Calphalon Rubbermaid 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Calphalon Rubbermaid can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Newell Co.: Corporate Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Calphalon Rubbermaid 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Calphalon Rubbermaid in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Calphalon Rubbermaid is facing challenges because of the dominance of functional experts in the organization. Newell Co.: Corporate Strategy 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.
Using analytics as competitive advantage
– Calphalon Rubbermaid 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.: Corporate Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Calphalon Rubbermaid to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Calphalon Rubbermaid can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Newell Co.: Corporate Strategy 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.: Corporate Strategy are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Calphalon Rubbermaid business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Calphalon Rubbermaid high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Calphalon Rubbermaid 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Newell Co.: Corporate Strategy, Calphalon Rubbermaid may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Calphalon Rubbermaid in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Technology acceleration in Forth Industrial Revolution
– Calphalon Rubbermaid has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Calphalon Rubbermaid 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Calphalon Rubbermaid 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.: Corporate Strategy .
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 Calphalon Rubbermaid.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Calphalon Rubbermaid with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Calphalon Rubbermaid needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Calphalon Rubbermaid 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.
Regulatory challenges
– Calphalon Rubbermaid 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.
Weighted SWOT Analysis of Newell Co.: Corporate Strategy 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.: Corporate Strategy 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.: Corporate Strategy 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.: Corporate Strategy 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.: Corporate Strategy 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 Calphalon Rubbermaid needs to make to build a sustainable competitive advantage.
