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 commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is increasing trade war between United States & China, there is backlash against globalization, increasing energy prices, talent flight as more people leaving formal jobs,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, 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 -
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Calphalon Rubbermaid are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
Organizational Resilience of Calphalon Rubbermaid
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Calphalon Rubbermaid does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Calphalon Rubbermaid has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Newell Co.: Corporate Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Calphalon Rubbermaid is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Calphalon Rubbermaid has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Newell Co.: Corporate Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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 -
Increasing silos among functional specialists
– The organizational structure of Calphalon Rubbermaid is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Calphalon Rubbermaid needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Calphalon Rubbermaid to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Newell Co.: Corporate Strategy, in the dynamic environment Calphalon Rubbermaid has struggled to respond to the nimble upstart competition. Calphalon Rubbermaid has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Products dominated business model
– Even though Calphalon Rubbermaid has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Newell Co.: Corporate Strategy should strive to include more intangible value offerings along with its core products and services.
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.
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.
Aligning sales with marketing
– It come across in the case study Newell Co.: Corporate Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Newell Co.: Corporate Strategy can leverage the sales team experience to cultivate customer relationships as Calphalon Rubbermaid is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Newell Co.: Corporate Strategy 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 Calphalon Rubbermaid 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Calphalon Rubbermaid is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Newell Co.: Corporate Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
No frontier risks strategy
– After analyzing the HBR case study Newell Co.: Corporate Strategy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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 -
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.
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.
Better consumer reach
– The expansion of the 5G network will help Calphalon Rubbermaid to increase its market reach. Calphalon Rubbermaid 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.
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 Calphalon Rubbermaid in the consumer business. Now Calphalon Rubbermaid can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Calphalon Rubbermaid to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
Developing new processes and practices
– Calphalon Rubbermaid 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, 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.
Loyalty marketing
– Calphalon Rubbermaid has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
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 -
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.
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.
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 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.
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. Calphalon Rubbermaid 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.
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 .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Calphalon Rubbermaid can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.