The Newell Company
How did Newell try to create value?
First of all, there are a lot of answers to that question. What strikes most is the high number of acquisitions undertaken by the Newell Company, which in the end let it become the single most important company in the business of housewares.
The main effect were tremendous economies of scale and to a smaller amount economies of scope. Targeted firms all showed a big market share and helped ensuring Newell’s significant presence in the retailer’s shelf space (showing a portfolio on several price-levels), or at least improved capacity utilization while reaping the benefits of globalization. As a matter of fact, Newell’s new assets led to horizontal as well as vertical diversification. Their motto of “Build on what we do best” was integrated by leveraging core competencies, which became known as “Newellization”. After an acquisition, the companies were put through a process of streamlining, focusing on operational efficiency and......
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