The Company is a global manufacturer and full-service marketer of name-brand
consumer products serving the needs of volume purchasers, including department/specialty
stores and warehouse clubs, home centers and hardware stores, and office superstores
and contract stationers. The Company's basic business strategy is to merchandise
a multi-product offering of everyday consumer products, backed by an obsession
with customer service excellence and new product development, in order to achieve
maximum results for its stockholders.
The Company is driving its strategy, the Growth Game Plan, into action and
simplifying its structure through the execution of Project Renewal, making sharper
portfolio choices and investing in new marketing and innovation to accelerate
performance. In the Growth Game Plan operating model, the Company has reorganized
around two core activity systems, Development and Delivery, supported by three
business partnering functions, Human Resources, Finance/IT and Legal, and four
winning capabilities in Design, Marketing & Insight, Supply Chain and Customer
Development, all in service to drive accelerated performance in the Company’s
five segments. The Company’s five business segments and the key brands
included in each segment are as follows:
Writing: Sharpie®, Paper Mate®, Expo®, Prismacolor®, Parker®,
Waterman® , Dymo® Office and Endicia®
Home Solutions: Rubbermaid®, Calphalon®, Levolor® and Goody®
Tools: Irwin®, Lenox®, hilmorTM and Dymo® Industrial
Commercial Products: Rubbermaid Commercial Products® and Rubbermaid®
Healthcare
Baby & Parenting: Graco®, Aprica® and Teutonia®
The Company's six transformational strategic initiatives are as follows: Productivity,
Streamlining, New Product Development, Marketing, Strategic Account Management,
and Collaboration.
Productivity is the initiative to reduce the cost of manufacturing a product
by at least five percent per year, every year in order to become the best cost
supplier. Streamlining is the commitment to reduce non-value added costs and
cut out excess layers. New Product Development represents the commitment to
develop and introduce cutting-edge, innovative new products to the market and
develop best-cost products to meet end-user needs. The Marketing initiative
represents the Company's commitment to transform from a 'push' to 'pull' marketing
organization, focusing on the end-user. The Strategic Account Management initiative
represents the Company's program to allocate resources to those strategic retailers
the Company believes will continue to grow in the future. Collaboration is the
Company's initiative for the divisional operating units to work together and
maximize economies of scale and the use of best practices.
Productivity
The Company's objective is to reduce the cost of manufacturing a product by
at least five percent per year on an ongoing basis with the goal of becoming
the best-cost supplier to our customers. To achieve productivity, the Company
focuses on reducing purchasing costs, materials handling costs, manufacturing
inefficiencies, and excess overhead costs to reduce the overall cost of manufacturing
products.
The planned deployment of Newell Operational Excellence (NWL OPEX) throughout
the Company's manufacturing network is aimed to deliver the Company's productivity
targets. NWL OPEX is designed to be a methodical process focused on lean manufacturing
which includes installing the right manufacturing and distribution metrics and
driving improvements quarter after quarter. In addition to the cost reductions,
other key components of NWL OPEX are improved quality and service levels and
the reduction of inventory lead times.
Streamlining
The streamlining initiative represents the Company's commitment and focus on
reducing non-value added activities and excess layers within the organization.
The Company's goal is to use the savings generated from streamlining to fund
marketing and other key initiatives, without increasing total expenses. The
Company is vigilant in creating a leaner organization that is more flexible
in its response time, both internally and externally.
New Product Development
The Company is determined to become the leader in introducing cutting-edge,
innovative, and patented new products to the marketplace. The Company seeks
to employ the best and brightest new product engineers in order to achieve this
goal through the implementation and execution of a world-class product development
process. The Company's intention is to become a 'new product machine' that will
enhance the brand image and help secure additional store listings.
Marketing
The Company's objective is to develop long-term, mutually beneficial partnerships
with its customers and become their supplier of choice. To achieve this goal,
the Company has a value-added marketing program that offers a family of leading
brand name staple products, tailored sales programs, innovative merchandising
support, in-store services and responsive top management.
The Company's marketing skills help customers stimulate store traffic and sales
through timely advertising and innovative promotions. The Company also assists
customers in differentiating their offerings by customizing products and packaging.
Through self-selling packaging and displays that emphasize good-better-best
value relationships, retail customers are encouraged to trade up to higher-value,
best quality products.
The Company is also committed to selective media advertising, including national
television advertising where appropriate, in order to increase brand awareness
among end-users of the product.
Customer service also involves customer contact with top-level decision makers
at the Company's divisions. As part of its decentralized structure, the Company's
division presidents are the chief marketing officers of their product lines
and communicate directly with customers. This structure permits early recognition
of market trends and timely response to customer problems.
Phoenix Program
The marketing effort focuses largely on an extensive grass roots marketing
campaign, highlighted by our Phoenix Program, which was introduced in 2001.
This initiative is an action-oriented field sales force consisting of recent
university graduates. The team works in the field, primarily within our Strategic
Account structure, performing in-store product demonstrations, event marketing,
on-shelf merchandising, interacting with the end-user, and maintaining an ongoing
relationship with store personnel. This initiative allows the Company to enhance
product placement and minimize stock outages and, together with the Strategic
Account Management Program, to maximize shelf space potential.
Strategic Account Management
The Strategic Account Management Program is the Company's sales and marketing
approach that focuses growth efforts on strategic accounts with high long-term
growth potential. Separate sales organizations have been established to more
effectively manage the relationship at the largest strategic accounts, specifically
Wal'Mart, The Home Depot and Lowe's. As part of this program, the Company established
President level positions to more effectively manage the relationships with
these accounts. The program allows the Company to present these customers with
'one face' to enhance the Company's response time, understand the customer's
needs and support the best possible customer relationship.
Collaboration
Collaboration represents the Company's focus to benefit from the sharing of
best practices and the reduction of costs achieved through economies of scale.
For example, functions, such as purchasing and distribution and transportation,
have been centralized to increase buying power across the Company.
Additionally, certain administrative functions are centralized at the corporate
level including cash management, accounting systems, capital expenditure approvals,
order processing, billing, credit, accounts receivable, data processing operations
and legal functions. Centralization concentrates technical expertise in one
location, making it easier to observe overall business trends and manage the
Company's businesses.
Productivity
The Company's objective is to reduce the cost of manufacturing a product by
at least five percent per year on an ongoing basis with the goal of becoming
the best-cost supplier to our customers. To achieve productivity, the Company
focuses on reducing purchasing costs, materials handling costs, manufacturing
inefficiencies, and excess overhead costs to reduce the overall cost of manufacturing
products.
The planned deployment of Newell Operational Excellence (NWL OPEX) throughout
the Company's manufacturing network is aimed to deliver the Company's productivity
targets. NWL OPEX is designed to be a methodical process focused on lean manufacturing
which includes installing the right manufacturing and distribution metrics and
driving improvements quarter after quarter. In addition to the cost reductions,
other key components of NWL OPEX are improved quality and service levels and
the reduction of inventory lead times.
Streamlining
The streamlining initiative represents the Company's commitment and focus on
reducing non-value added activities and excess layers within the organization.
The Company's goal is to use the savings generated from streamlining to fund
marketing and other key initiatives, without increasing total expenses. The
Company is vigilant in creating a leaner organization that is more flexible
in its response time, both internally and externally.
New Product Development
The Company is determined to become the leader in introducing cutting-edge,
innovative, and patented new products to the marketplace. The Company seeks
to employ the best and brightest new product engineers in order to achieve this
goal through the implementation and execution of a world-class product development
process. The Company's intention is to become a 'new product machine' that will
enhance the brand image and help secure additional store listings.
Marketing
The Company's objective is to develop long-term, mutually beneficial partnerships
with its customers and become their supplier of choice. To achieve this goal,
the Company has a value-added marketing program that offers a family of leading
brand name staple products, tailored sales programs, innovative merchandising
support, in-store services and responsive top management.
The Company's marketing skills help customers stimulate store traffic and sales
through timely advertising and innovative promotions. The Company also assists
customers in differentiating their offerings by customizing products and packaging.
Through self-selling packaging and displays that emphasize good-better-best
value relationships, retail customers are encouraged to trade up to higher-value,
best quality products.
The Company is also committed to selective media advertising, including national
television advertising where appropriate, in order to increase brand awareness
among end-users of the product.
Customer service also involves customer contact with top-level decision makers
at the Company's divisions. As part of its decentralized structure, the Company's
division presidents are the chief marketing officers of their product lines
and communicate directly with customers. This structure permits early recognition
of market trends and timely response to customer problems.
Phoenix Program
The marketing effort focuses largely on an extensive grass roots marketing
campaign, highlighted by our Phoenix Program, which was introduced in 2001.
This initiative is an action-oriented field sales force consisting of recent
university graduates. The team works in the field, primarily within our Strategic
Account structure, performing in-store product demonstrations, event marketing,
on-shelf merchandising, interacting with the end-user, and maintaining an ongoing
relationship with store personnel. This initiative allows the Company to enhance
product placement and minimize stock outages and, together with the Strategic
Account Management Program, to maximize shelf space potential.
Strategic Account Management
The Strategic Account Management Program is the Company's sales and marketing
approach that focuses growth efforts on strategic accounts with high long-term
growth potential. Separate sales organizations have been established to more
effectively manage the relationship at the largest strategic accounts, specifically
Wal'Mart, The Home Depot and Lowe's. As part of this program, the Company established
President level positions to more effectively manage the relationships with
these accounts. The program allows the Company to present these customers with
'one face' to enhance the Company's response time, understand the customer's
needs and support the best possible customer relationship.
Collaboration
Collaboration represents the Company's focus to benefit from the sharing of
best practices and the reduction of costs achieved through economies of scale.
For example, functions, such as purchasing and distribution and transportation,
have been centralized to increase buying power across the Company.
Additionally, certain administrative functions are centralized at the corporate
level including cash management, accounting systems, capital expenditure approvals,
order processing, billing, credit, accounts receivable, data processing operations
and legal functions. Centralization concentrates technical expertise in one
location, making it easier to observe overall business trends and manage the
Company's businesses.
Competition
The Company competes with numerous other manufacturers and distributors of
consumer products, many of which are large and well-established. The Company's
principal customers are large mass merchandisers, such as discount stores, home
centers, warehouse clubs and office superstores. The rapid growth of these large
mass merchandisers, together with changes in consumer shopping patterns, have
contributed to a significant consolidation of the consumer products retail industry
and the formation of dominant multi-category retailers, many of which have strong
bargaining power with suppliers.
This environment significantly limits the Company's ability to recover cost
increases through selling prices. Other trends among retailers are to foster
high levels of competition among suppliers, to demand that manufacturers supply
innovative new products and to require suppliers to maintain or reduce product
prices and deliver products with shorter lead times. Another trend, in the absence
of a strong new product development effort or strong end-user brands, is for
the retailer to import generic products directly from foreign sources.
The combination of these market influences has created an intensely competitive
environment in which the Company's principal customers continuously evaluate
which product suppliers to use, resulting in pricing pressures and the need
for strong end-user brands, the ongoing introduction of innovative new products
and continuing improvements in customer service.