Rubbermaid Case Study Solution

Executive Summary:

Rubbermaid, a dominant American company, was known in the 1990s for its Little Tikes brand name in the commercial playground market in addition to being an innovative company. Rubbermaid noted an opportunity to extend its Little Tikes brand name through the acquisition of successful, privately owned companies who also competed in the commercial playground market. The company had the resources and core competencies to carry out this strategy and become the market share holder internationally. To accomplish this strategy, the company acquired four companies in 1993. The companies included two American based companies, Omni of California and Iron Mountain Forge of Missouri, and two foreign based companies, Ausplay of Australia and Paris Playgrounds of Canada. Acquiring these companies would allow Rubbermaid to become a leader in both the traditional, outdoor playground market and capitalize on an emerging opportunity in the market for soft-modular, indoor play.

Rubbermaid’s strategy included consolidating manufacturing and standardizing processes and software among the newly acquired businesses to adhere to one way of operating and doing business. In addition, Rubbermaid also reorganized its internal structure into two different divisions, the newly acquired businesses all grouped together. Rubbermaid faced many challenges following the acquisition of the companies and in carrying out its strategic vision for dominating the commercial play market. The two major problems the company faced were a lack of communication across units and failing to realize that changing the way already successful businesses operate could be extremely detrimental. The strategic initiatives the company laid out were not properly commu...

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...away from this strategy as it attempted to streamline processes and consolidate operations. Attempting to streamline processes and consolidate operations was Rubbermaid’s biggest downfall in its strategy. The acquired businesses were each successful on their own prior to the acquisition. If Rubbermaid had allowed the companies to operate independently as sub-units of Rubbermaid and simply brand each company’s products with the Little Tikes name, many of the problems faced would have been bypassed. Thus, the company should have placed a greater emphasis on marketing and branding across the units rather than on operations and manufacturing. This would have allowed the company to easily leverage its brand name, compete in diverse markets, and continue to generate profits to expand its reach in its vision to become a leader in the world market for commercial play sets.