Newell Rubbermaid SWOT and PESTLE Analysis

Strength

1. Growth game plan: Newell Brand introduced its growth game plan as part of its strategy in late 2016. This plan focuses on streamlining the organization, new investment priorities, expands eCommerce capabilities across various categories. Also the plan divides its portfolio into 3 broad categories namely win bigger, develop for growth, entrepreneurial. As part of the plan, the company will simplify its existing 32 business units to 16 operating divisions, this also includes the newly created global enterprise-wide eCommerce division.

In order to strengthen its brand portfolio, Newell Brand sold its tools business, which includes Irwin, Lenox, Hilmor brands to Stanley Black & Decker. Newell brands as part of its strategy, sold its winter sports business. Newell brands took these measures in order to accelerate growth by simplifying and strengthening its product portfolio.

2. Diverse Product Portfolio: Newell Brands’ products fall under various categories like Writing, outdoor recreation products, outdoor clothing, sports equipment, baby products, Commercial products, kitchen appliances, Safety products to name a few. Its product portfolio comprises of popular brands like Parker, Paper mate, Dymo, Colman company products, Marmot, Rawlings, Graco, NUK, Oster, Calphalon, First Alert. Newell Brands sells its products in about 200 nations around the globe and has operations on the ground in almost 100 of these nations.

3. Acquisitions & Mergers: Newell Brands has been successfully acquiring companies to complement its product portfolio. The company has acquired Smith Mountain industries, this would complement their existing home fragrance category which includes Yankee candle brand. Also, it would be acquiring Chesapeake Bay Candle.

4. Focussed R&D: It has constantly invested in product based innovation. Newell has set up a state-of-the-art design centre Kalamazoo, Michigan. Through this design center Newell aspires to use both design and innovation as competitive advantage. Some of the exciting new products lined up in 2017 are EXPO Dry Erase Markers with Ink Indicator, the whiteboard marker that provides an indication of low ink to name a few.

Weakness

1. Lack of eCommerce presence: Newell brands such as Sharpie and Rubbermaid have witnessed lower quarterly earnings, one of the reasons being a shift in consumers’ preference towards eCommerce over brick and mortar stores, while the later generates 85 percent of the company’s revenue.

2. Dependence on suppliers: Newell’s dependence on resin suppliers with facilities in Texas and Louisiana, which were affected by Hurricane Harvey, remained shut down for more than a week, this disrupted the supply chain of Newell brands. As a result, the company’s earnings were affected.

Opportunity

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Threat

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References

1. Newell RubbermaidAnnual Report 2016: https://ir.newellbrands.com/investor-relations/annual-reports/default.aspx

2. Newell Rubbermaid investor relations: https://ir.newellbrands.com/investor-relations/press-releases/press-release-details/2016/Newell-Brands-Announces-New-Growth-Game-Plan/default.aspx https://ir.newellbrands.com/investor-relations/press-releases/press-release-details/2017/Newell-Brands-Completes-Sale-of-Tools-Business-to-Stanley-Black--Decker/default.aspx

3. Shares of Rubbermaid and Sharpie have declined: https://fortune.com/2017/02/06/newell-shares-rubbermaid-sales/

4. Newell blames Harvey for profit warning: https://www.ft.com/content/ca2fb37e-931b-11e7-a9e6-11d2f0ebb7f0

5. Retail eCommerce sector: https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/

Political

1. Trump administration: Change in U.S. administration due to change in presidency will result in change in market conditions. There will be changes in tax laws, tax rates and also rules and regulations pertaining to business operations. Newell Brands being an American company which manufactures consumer and commercial products with a diverse range of brand portfolio will also be affected by this change in administration in U.S.

2. Geo-politics: Geo-political events like change in government administration in countries like US, Europe, instability in Russia and Middle East, have the potential to offset the oil prices in the world. As witnessed, change in oil prices have an impact on a country’s economy. This in turn, will affect the purchasing power of consumers in US and will impact the demand for products by Newell Brand, which will further impact the sales and revenue of the company in the long-run.