This is a draft of a case study I am completing for strategic mgt. My professor looked over my draft and said I needed to better explain the 3 criteria of effective corporate level strategy (black boxes). I'm really not sure what he is referring to when he says black boxes and I cannot find anything in the course slide. Can someone help me?

1.At the time of the case did Newell meet the criteria for effective corporate-level strategy? Why or why not?

Beginning with the first statement of the corporate strategy in 1967 for Newell, one of growing through performance and leverage of their array of products going to large retailers, Newell understood that their package would have a "greater impact on the financial community, both for securing financing for future expansion and for the establishment of a market for the Companies' equity securities" (Montgomery 2005).This was a strategy designed to increase the marketing impact more than that of individual lines, increase the fiscal impact on the financial community, and increase expansion of the company through performance and marketing leverage.From this point, until Newell transitioned to a public corporation four years later, the company focused on acquisitions and developing relationships with merchants that carried their new products, hoping to leverage these relationships so that they might sell other items or brands under the Newell umbrella.

After going public Newell became aggressive in adding new products through acquisitions following a "disciplined and aggressive two-pronged strategy" that enabled them to obtain more than 30 major businesses over a twenty-year period.The focus at Newell was on acquiring companies which produced low technology, nonseasonal, noncyclical, and nonfashionable products that volume retailers would keep on their shelves year-round (Montgomery 2005).Many of the firms acquired were underperforming which resulted from high manufacturing costs and low profit margins.These companies were then put through a process referred to as "Newellization," where restructuring, improvement in operational efficiency and cost effectiveness were prioritiesThe objective of this process was to increase operating margins above the minimum 15% that Newell expected from each of its businesses, utilizing a functional rather than divisional approach with a single sales force selling all of its products (Montgomery 2005).After a much-needed organizational transformation, where Newell recognized that a centralized marketing process was not efficient, Newell moved to a divisional focus where each division handled its own manufacturing and marketing with the corporation directing the administrative, treasury and legal systems.

When the Newell case study occurred, Newell had a corporate strategy that was regarded as one of the top strategies for growth-oriented firms.Their strategy rests on well grounded pillars that have an emphasis on growth and expansion.This strategy was accomplished through acquisitions of well thought of brands in its business with Newell concentrating on the efficient creation of their product usinga centralized corporate administration.They focused on a broad evaluation of divisional performance in regard to profitability with the distribution of their merchandise through mass retailers.CEO John McDonough had a strong belief that acquisitions played a critical role in an expansion strategy which advanced its market power to over $10 billion in capitalization while increasing the companies' profits and market share.The company's corporate division is important in adding value for businesses in their portfolio.The main office is responsible for identification, screening, and the acquisition of firms that contribute to the overall growth strategy of the corporation.Newell corporation is successful in incorporating newly acquired firms in their brand portfolio while transforming them into business models which align with its mission and goals (Montgomery, 2005).Their goals were centered around a focus on boosting sales, while increasing profitability through offering a wide range of products and consistent services, predominantly through mass retail channels.Their corporate level strategy included strategic acquisitions rather than focusing on internal expansion.All acquisitions were initiated at the corporate level where they performed a comprehensive screening of possible target firms utilizing a standard that firms acquired must have the same level of performance as Newell when it comes to market share, cost of goods sold (COGs), projected operating margin in addition to selling, general and administrative (SG&G) expenses after aligning the acquisition with Newell gold's and standards.The structure of Newell, combined with established systems within the company: including personnel, central financial, and performance review systems, supports creating predictable and reliable brands that are essential in maintaining the company's competitive advantage.When considering Newell's focus on expansion, all key acquisitions have significantly contributed to its growth with the acquired firms being incorporated seamlessly operations of the company (Montgomery, 2005).

2.Do the acquisitions of Calphalon and Rubbermaid by Newell make sense according to the logic of corporate level strategy? Why, or why not?

The acquisition of Calphalon and Rubbermaid by Newell made sense when considering the logic of corporate level strategy.Creating value for the corporation was the ultimate goal of both acquisitions which served as the foundation for the growth of Newell by bringing enhanced brand recognition to its existing brand.

The acquisition of Calphalon in their houseware division created value for Newell by broadening its expansion into the specialty merchandize market.This tactic was one that made it possible for Newell to present a quality product with strong trade name identification to promote a move to both department and specialty stores.This also enabled Newell to branch out to markets where products have not reached the point at which their popularity has started to explode.Although most of Newell's cookware products were considered good, cookware produced by Calphalon is believed to be a purchase that is highly individual for the exceptional end user.In preserving the Calphalon name, Newell also kept the door open for WearEver to continue becoming one of the leading mass merchandizer brands in their product portfolio.Calphalon perfectly integrates with the Newell strategy characterized by enhanced customer connections.They also have a variety of products that fit in well with the existing Newell pricing strategy to achieve competitive advantage and offer beneficial products for retailers that help in adding value to the company while increasing brand equity.

With a brand that is well known (brand equity), significant shelf space at big box retailers, and inefficiency within its operations,Rubbermaid was a perfect acquisition for Newell given their capability to Newellize companies coming under their umbrella.Newell had the ability to leverage its financial and operational systems and synergies bytaking a series of deliberate steps to intersect the strengths of the two companies and amplify their relationship

to upgrade Rubbermaid's declining market position.Considering Rubbermaid's wide range of products sold across the global market, this acquisition enabled Newell to increase its global presence and demographics to a larger clientele base.

An area that is disquieting for the acquisition of Rubbermaid by Newell that will need consideration is found in the understanding that mass retailers have moved to a low-cost model, making it increasingly difficult for Newell to preserve their target margins and returns to investors.In order to thrive, Newell should change its approach from being a differentiator to one where they are a cost leader.They will need to limit the power of big box retailers through the development of a pull strategy.This strategy would require Newell to preserve the brands that end-user's value and separate from those that do not.Although a pull strategy approach is different, it is not one that represents a major shift in the manner that Newell promotes itself to big box retailers.