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Was Newell right in acquiring Calphalon and Rubbermaid Newells strategy is making high-volume products at low cost and selling them to volume retailers It normally looked for acquisitions that would add value to Newells multiproduct offering and increases their importance as a supplier to volume retailers Attractive acquisitions include brand-name staple products that will bring in more shelf space for Newell and also small businesses to round out its existing product lines and consolidate industry capacity Newell - Calphalon Newells point of view Newell was right in acquiring Calphalon At first glance it looks to be a wrong move as Calphalons way of operation is totally opposite from that of Newell Calphalon sells high end cookware in department and specialty stores in low volume which went completely against Newells strategy of selling high volume products to mass retailers At the same time Newell already has their own cookware products in the good better and best categories in mass retail stores There looks to be no need for additional cookware products in Newells extensive product package However acquiring Calphalon need not be viewed as a clash with Newells strategy It is also not an acquisition for the basic reason of increment in shelf space Instead this acquisition brings about high learning value for Newell Despite actions taken by Newell to reduce the power of its buyers it cannot be denied that large retailers like Walmart still held considerable amount of power over Newell Over dependence on them as the only buyers will leave Newell vulnerable Should there be any hiccups in the negotiation in one of Newells products with the large retailer it may result in the failure of other deals too Hence Calphalon acts as the bridge to Newell to expand its distribution channels in areas other then through volume retailers On top of attempting to reduce risk of over-reliance on large retailers expanding distribution channels also act as
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