Question

When evaluating Newell's acquisition of Calphalon and Rubbermaid, would you recommend any alternative expansion modes?

Answer 1

Yes, I will recommend the ‘horizontal mode of alliance’ as the alternative expansion mode in this case. The horizontal mode of alliance is that from of strategic alliance in which alliances are formed between partners that operate in the same business area. This form of alliance is usually anti-competitive in nature and enables selling a product in multiple markets.

In this case horizontal mode of alliance as an alternative expansion mode can be explored to create more concrete solutions in a systematic manner. It should be noted that although the acquisition of Calphalon and Rubbermaid was a successful acquisition there was a gap with regards to focus on continuous growth of the company. Horizontal mode of alliance will help in filling this gap in a proper manner. This form of alternative expansion mode will not only help in filling the gap here but will also lead to increased competitive advantage in the long run for the combined entity.