Daniel Ferguson
1. How does Newell try to create corporate advantage?
Newell tries to create corporate advantage by introducing a “build on what we do best” philosophy started by Daniel Ferguson, the CEO. Ferguson describes this philosophy in more detail in the case by stating "We realized we knew how to make a high-volume, low-cost product, and we knew how to relate to and sell to the large mass retailer." This role for Newell was the foundation for how they would obtain their corporate advantage in the industry. Ferguson identified his focus for Newell as a market for do-it-yourself products and hardware. In order to gain access to new discount outlets for Newells existing products, they acquired Mirra-Cote, a producer of bath hardware. By acquiring Mirra-Cote …show more content…
In addition, the business must be deemed strategic and remain suited to the company’s main focus. The logic behind all of these acquisitions was to ultimately increase Newell’s “profit growth not sales growth” and target products that were in high demand that would allow maximum “shelf space” as one Newell executive notes. For example, Montgomery mentions that “Calphalon broadened Newell’s access to the department and specialty store markets and extended the company’s cookware product line to the top of the market”. In addition, Montgomery also says that after acquiring Rubbermaid, Newell “would have a greater global presence and broader product offering than Newell alone”. Globalization was the long term goal for combining business for Newell since the majority of their customers were starting to become global. Montgomery also mentions that Newell acquired small businesses to “round out its existing product lines and consolidate industry capacity” so they would not have to worry about customers supporting their major competitors and giving them an opportunity to
Newell tries to create corporate advantage by introducing a “build on what we do best” philosophy started by Daniel Ferguson, the CEO. Ferguson describes this philosophy in more detail in the case by stating "We realized we knew how to make a high-volume, low-cost product, and we knew how to relate to and sell to the large mass retailer." This role for Newell was the foundation for how they would obtain their corporate advantage in the industry. Ferguson identified his focus for Newell as a market for do-it-yourself products and hardware. In order to gain access to new discount outlets for Newells existing products, they acquired Mirra-Cote, a producer of bath hardware. By acquiring Mirra-Cote …show more content…
In addition, the business must be deemed strategic and remain suited to the company’s main focus. The logic behind all of these acquisitions was to ultimately increase Newell’s “profit growth not sales growth” and target products that were in high demand that would allow maximum “shelf space” as one Newell executive notes. For example, Montgomery mentions that “Calphalon broadened Newell’s access to the department and specialty store markets and extended the company’s cookware product line to the top of the market”. In addition, Montgomery also says that after acquiring Rubbermaid, Newell “would have a greater global presence and broader product offering than Newell alone”. Globalization was the long term goal for combining business for Newell since the majority of their customers were starting to become global. Montgomery also mentions that Newell acquired small businesses to “round out its existing product lines and consolidate industry capacity” so they would not have to worry about customers supporting their major competitors and giving them an opportunity to