...For the exclusive use of C. SULLIVAN Harvard Business School 9-391-095 Rev. April 18, 1995 Cooper Industries’ Corporate Strategy (A) The business of Cooper is value-added manufacturing. – Cooper Industries’ management philosophy Manufacturing may not be glamorous, but we know a lot about it. – Robert Cizik, Chairman, President and CEO Cooper Industries, a company more than 150 years old, spent most of its history as a small but reputable maker of engines and compressors to propel natural gas through pipelines. In the 1960s, the firm’s leaders decided to expand the company to lessen its dependence on the capital expenditures of the cyclical natural gas business. During the next 30 years, the company acquired more than 60 manufacturing companies that dramatically increased the size and scope of Cooper Industries (Exhibits 1 and 2). Through a process that both insiders and outsiders called “Cooperization,” the company welded a group of “independent, over-the-hill companies into a highly efficient, profitable, competitive business.”1 By 1988, the diversified industrial products company derived $4.3 billion in annual revenues from manufacturing 2 million items. Cooper’s products ranged from 10¢ fuses to $3 million turbine compressor sets marketed under an array of brand names, the most famous of which was Crescent wrenches. “We decided a long time ago,” said Robert Cizik, chairman, president, and CEO, “that if we could do an outstanding job at the unglamorous part by making necessary...
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...Cooper Industries Corporate Strategy * Reputable maker of engines and compressors to propel natural gas. * More than 150 years of Business duration. * Cooper Industries acquired more than 60 manufacturing companies in 30 yrs. Q1. What is Cooper’s corporate strategy * Cooper Industries’ main corporate strategy is broad diversification through M&A. * Cooper Industries acquired firms in order to lessen its dependence on cyclical natural gas industry and to exhibit stable earnings. * Cooper Industries acquired firms that had stable earning, a broad customer base and proven manufacturing operations using well-known technologies. * Cooper Industries had a good corporate level strategy of diversification. * Copper Industries acquired both related and non-related businesses. * As a result, Cooper Industries could exhibit stable earnings. * Reasons for Cooper’s diversification * Threats of its original industry : * Low growth level * Unstable market(cyclic) * Technology Issues * Expensive labor and high costs. * Cooper’s strengths : * Skilled labor and high technology that could be used in other businesses * Financially abundant. * In order to refrain from possible threats and maximize its strengths, Cooper chose to diversify its business both in size and scope. * By diversification, Cooper could achieve, * Update of processes and equipment ...
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...Cooper Industries’ Corporate Strategy I. Situation of the company Cooper Industries was the manufacturing company have the three group of business. The three group business are Electrical & Electronic, commercial & industrial, and compression & drilling. All this group had created growth in term of revenue by doing acquisition. Initially, Cooper was the recognized leader in pipeline compression equipment. However, the company had developed production expertise and had built a reputation for customer service in the natural gas industry as well as extracted gas from underground wells. Electrical and Electronic. The E & E segment was Cooper’s largest in 1988, generating one-half of corporate sales and 57% of operating profits. Cooper had entered this segment with the 1981 purchase of Crouse-hinds. By 1988, E&E had four sub-segments, each representing quite diverse business, but all focused on the mature North American market that accounted for over 90 percent of segment sales. Commercial and industrial. In the commercial and industrial segmen Cooper participated in the non-powered handtool and window treatment business, and in the automotive aftermarket. In the Tool group, consolidation of acquisitions was completed and new manufacturing of acquisitions was completed and new manufacturing facilities constructed by 1988, and the company held the preeminent market position in most of its tool lines. Compression, drilling and energy equipment Compression and drilling...
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...Cooper Case 1. What is Cooper’s corporate strategy? How does it create value? What are its key resources? Response: What is Cooper’s corporate strategy? Cooper Industries is a broad company that uses the M&A strategy of diversification by acquiring companies that posses their own strong assets and exhibit stable earnings. As stated by the Corporate Role the company’s acquisitions had guidelines of companies that served a broad customer base, had stable earning and proven manufacturing operations using well-known technologies and had brand name product from market leaders. Moreover, Cooper’s corporate strategy is diversification through acquisitions and mergers. This diversification is in both related and non-related businesses to lessen its dependence on the capital expenditures of the natural gas industry. Cooper’s started acquiring low-technology manufacturing companies. The companies were premium-quality products with strong brands names mainly still own by the original family owners that have seen better days. Once Cooper’s acquired the companies they would update the processes and equipment and consolidate the plants. In a few cases, moved entire manufacturing plants to new plants in the southern part of the country to break away from practices of 20 years ago. They called this the “Cooperization” process which is one where they create lean independent business. The “Cooperization,” process included plans for divisional managers to seek out complementary acquisitions...
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...know about strategy. Portfolio planning, seemed to fit so nicely in their growth/share matrices. Threatthe experience curve, PIMS, Michael E. Porter’s five forces – ened by smaller, less hierarchical competitors, many corporate tools like these brought rigor and legitimacy to strategy at stalwarts either suffered devastating setbacks (IBM, Digital, both the business unit and the corporate level. Leading comGeneral Motors, and Westinghouse) or underwent dramatic panies, such as General Electric, built large staffs that reflected transformation programs and internal reorganizations (GE growing confidence in the value of strategic planning. Stratand ABB). By the late 1980s, large multibusiegy consulting boutiques expanded rapidly ness corporations were struggling to justify and achieved widespread recognition. How EDITOR’S NOTE: This influential their existence. different the landscape looks today. The 1995 article (originally published Not surprisingly, waves of new approaches armies of planners have all but disappeared, as “Competing on Resources: to strategy were proposed to address these swept away by the turbulence of the past deStrategy in the 1990s”) intromultiple assaults on the premises of strategic cade. On multiple fronts, strategy has come duced the resource-based view planning. Many focused inward. The lessons under fire. of the firm to practitioners hungry from Tom Peters and Bob Waterman’s “excelAt the business unit level, the pace of for a new approach to strategy. lent” companies...
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...additionally diminish the amount of changing IT frameworks utilized inside the association now that the IT office was more included. Potentially, this might prompt a clearer brought together business strategy with a more reconciled IT procedure. The new steering committee reflects an abnormal amount of executive inclusion. It may as well now have the capacity to better prioritize ventures and furnish more center to IT activities. The extent that the impediments, progressing correspondences and preparing around the IT staff will be more challenging with a decentralized structure. Imparting of IT knowledge around the staff will require more exertion since they are more spread out all around the organization. Also, the IS section may have more challenge getting financing since all divisions must vie for constrained funding. Then again, the IS section may be less responsible for its exercises or tasks that have gone harsh than if a chargeback subsidizing framework had been utilized since the business unit heads might be precisely following each upkeep. That is the reason it is paramount for Cooper to serve on the committee. 2. What problems was Cooper trying to solve with the new IS structure? How successful do you think the new structure will be in solving these problems? With the new structure, Cooper was attempting to address the diminishing profits of the organization because of the expanded IT using. Business units were permitted to purchase...
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...interviews with managers and on internally generated performance data. We compare the results of these analyses to those from analyses of post-acquisition operating and stock price performance traditionally applied to large samples. We draw two primary conclusions. (1) Our findings highlight the difficulty of implementing a successful acquisition strategy and of running an effective internal capital market. Post-acquisition difficulties resulted because: (a) managers of the acquiring company did not deeply understand the target company at the time of the acquisition; (b) the acquirer imposed an inappropriate organizational design on the target as part of the post-acquisition integration process; and (c) inappropriate management incentives existed at both the top management and division level. (2) Measures of operating performance used in large sample studies are weakly correlated with actual post-acquisition operating performance. * University of Chicago and NBER, University of Chicago, and Harvard University, respectively. We especially thank Shel Erikson, Thomas Hix, William Berger, Michael Grimes and Joseph Chamberlain of Cooper Cameron, John Deakins of Cameron Iron Works, and James Ringler and Larry Skatoff of Premark for talking with us and making this study possible. We thank Steven Hoffman, Sherry Roper, and Bradley Thompson for excellent research assistance. Comments from Larry Berlin, Derrick Deakins, Marc Knez, Toby Stuart, G. William Schwert, Rene Stulz, and...
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...VERVIEW:Cooper Industries is a broadly diversified manufacturer of electrical and general industrial products, and energy related machinery and equipment. Thecompany operates in three different business segments with 21 separate profit centers. These segments include electrical and electronic, commercial and industrial, compression, drilling and energy equipment. The product line is consistedof cheap fuses to $3 million compressor tribune sets along with products such ashand tools and light fixtures.The company bid a $21-a-share tender offer to acquire Champion Spar Plug, manufacturer of auto spar plugs, as a counter offer for the Dana Corp.'s $17.50-a-share bid. Also, in the mean time, Cooper Industries was considering a $700 million bid for Cameron Iron Wors. Even though purchasing either or both companies will give operational and organizational advantages, there were high financial riss involved. Undertaing both acquisitions would result in a 55% to 60% debt to capitalization ratio. ANALYSIS:Cooper Industries acquired more than 60 manufacturing companies over a thirty year span in order to increase the size and the scope of the company. Most of the acquired companies made it possible for Cooper to be independent of theoutside environment and giving full control of the manufacturing process concerning their business while avoiding anti-trust allegations. Cooper basically purchased every company that is vital to its energy industry and all the side industries that effect it...
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...British Journal of Management, Vol. 9, 91-114 (1998) Attributes of Successful and Unsuccessful Acquisitions of US Firms^ Michael Hitt,* Jeffrey Harrison,^ R. Duane Ireland* arid Aleta Best§ *Lowry Mays College of Business Administration, Texas A&M University, College Station, TX 77843-4221, •College of Business Administration, University of Central Florida, Orlando, FL 32816, 'Hankamer School of Business, Baylor University, Waco, TX 76798-8004, and ^College of Business and Industry, University of Massachusetts Dartmouth, North Dartmouth, MA 02747, USA Acquisitive growth strategies continue to be popular, in spite of increasing evidence that they often do not enhance the financial performance of acquiring firms and may adversely affect innovation. However, some acquisitions are associated with both increases in financial performance and a strengthened commitment to R&D while others experience decreases in both. Multiple theories have been offered to explain acquisitions and their outcomes, but few have received strong empirical support. This paper describes a multiple rater, multiple-case study of acquisitions that had highly favourable outcomes and others that experienced highly unfavourable outcomes. All twelve of the high performing acquisitions studied were found to exhibit the dual characteristics offiriendlinessduring acquisition negotiations and resource complementarities between the two firms. Additionally, debt played an important role in the success (low...
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...MINI COOPER: MARKETING STRATEGY, DIGITAL MARKETING, BRAND & ETHICS 10.2478/cris-2013-0005 MINI COOPER: MARKETING STRATEGY, DIGITAL MARKETING, BRAND & ETHICS MARIIA MOISEIEVA The report is designed to examine, analyse, and evaluate where appropriately the current Mini Cooper’s marketing strategy, its digital marketing initiative, branding, and the importance of ethical values in Mini Cooper as well as other organisations. That is important for understanding of the practical applications of marketing is achieved by applying theory to them. It is determined that Mini’s marketing strategy has shifted in terms of targeting and brand positioning. As previously it was an affordable iconic British car, now it has become a cool luxury car dominantly for a young segment. Its international marketing strategy is differentiated in a way that a brand is built up on the historical iconic image of Mini for the UK and associated market, but it is not associated with any values in the past for the US customers. Overall, Mini’s marketing strategy is considered to be innovative, creative, and sometimes ‘silly’, which is of great value for its young energetic target audience. Digital marketing initiative also corresponds to the latest IT and social trends worldwide by ‘digitalising’ marketing initiatives and active social networking with the consumers. Brand is a core competence and ‘everything’ for Mini. Marketing is centered on its brand, not vice versa. An analysis of the Mini’s strategy...
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...Ethical perspectives- Cross-cultural perspectives ETH/316 July 7, 2013 Abstract The Global Company chose to research is a global organization, PricewaterhouseCoopers, known in the United States as PwC. Ethical perspectives in this global organization and compare the ethical perspectives across cultures that are involved in this global organization will be addressed. This company delivers assistance in quality assurance, advisory services, and tax. The company consists of a network of firms that offer these services. This network thrives on helping large and small companies to reach independent strength by showing in many ways how to survive form business to cultural and ethical diversity. This network of firms also has established a vigorous global network and their core value, and the one shared with their clients, is of excellence, teamwork, and leadership. Ethical perspectives- Cross-cultural perspectives The Global Company chose to research is a global organization, PricewaterhouseCoopers, known in the United States as PwC. Ethical perspectives in this global organization and compare the ethical perspectives across cultures that are involved in this global organization will be addressed. This company delivers assistance in quality assurance, advisory services, and tax. The company consists of a network of firms that offer these services. This network thrives on helping large and small companies to reach independent strength by showing in many ways how...
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...wide range of accounting measures, including drawing down on reserves set aside for expenses. The economic situation at the time was not taken into account when implementing these aggressive accounting measures. Other similar companies were reporting declining revenues. It was identified that the management who were making the aggressive accounting decisions, were also posting the journals to the general ledger, and reviewing and approving the reporting. Pressure was placed on personnel who did not support the aggressive targets. A great deal of focus was put on “teamwork” and being a strong “team player”, which is said to have been a strategy to reduce dissenting opinion, eventually leading the organization to follow a “groupthink” attitude. In 2000, the telecommunications industry entered a downturn and WorldCom’s aggressive growth strategy suffered a serious setback. However, due to the accounting measures used by Q3 in 2000, the company managed to meet Wall Street expectations. Finally, WorldCom’s stock price started to plummet and the CEO faced margin calls from his bankers, forcing him to either sell his shares or repay the loans. He did not want to sell his shares as his doing so would put further downward pressure on the stock price. Therefore, WorldCom directors lent the CEO US$400...
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...Current Events in Business Research Daniel Murphy RES/351 April 28, 2104 Dr. Linda Florence Current Events in Business Research The business research process begins with clarifying the research question (Cooper & Schindler, 2011). In the restaurant company I work for, we wanted to know how the employees feel about the company and what we could do to make us the employer of choice. Once we had that question figured out we needed to come up with a proposal and a research strategy to gain the data needed to answer the question (Cooper & Schindler, 2011). We, as a company, came up with the idea do have everyone do an anonymous survey. In this survey questions were asked about the direction of the company, what you would want to see from the company, how comfortable you are with pay, benefits, your supervisors, our values, and what you would change if you could change things about the company. This survey was taken by over 95% of our workforce including our corporate office employees, district managers, general managers, assistant managers, and all employees so that was a huge turnout. Next the data had to be collected and prepared, before we could move any further (Cooper & Schindler, 2011). Once the data was collected and prepared every district received an analysis of the company overall did, and their district did. On top of that each restaurant received analysis of how they did as a restaurant, and copies of how the district and company did as a comparison...
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...GLOBAL CORPORATE STRATEGY Name Course Instructor School Date Abstract. The report seeks to answer questions relating to Lloyd banking group, an internationally accredited bank that offers several services. Several issues are addressed in the report. The first issue being addressed is the merit and demerits of globalization in the global financial industry. Additionally, the threats and opportunities facing Lloyd Bank are looked at. The second issue being addressed focuses on the role of strategic alliances of mergers and acquisitions in the implementation of the e-banking system. Lastly, the role of corporate governance and corporate social responsibility is addressed. A personnel reflection and a conclusion sum up the paper. Table of Contents Abstract. 2 QUESTION 1: Firms’ Competitiveness in the Global Financial Services Industry 3 Merits of globalization 3 Demerits of Globalisation 4 Opportunities 5 Threats 6 Question two: E-Banking – The Role of Alliances, Mergers, and Acquisitions 7 Question three: Corporate Governance, CSR, and Competitiveness Leadership 12 Question four: Personal Reflections on Learning and Overall Report Presentation 15 Conclusion 16 Reference 17 QUESTION 1: Firms’ Competitiveness in the Global Financial Services Industry Merits of globalization Globalization of financial services has resulted in more banks increasing their consumer or customer base since they can exploit different areas across the world. The perfect example in this case...
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...MINI was born in 1959 in United Kingdom and became an independent brand of BMW group in 1994 by SIR Alec Issigonis (BMW Group, 2009) At the beginning it was an affordable iconic British car, now it has become a cool luxury car dominantly for a young segment. Its international marketing strategy is differentiated in a way that a brand is built up on the historical iconic image of Mini for the UK and associated market, but it is not associated with any values in the past for the US customers. Overall, Mini’s marketing strategy is considered to be innovative, creative, and sometimes “silly”, which is of great value for its young energetic target audience. Mini focused on group of young generation – up to thirty five years old, well-educated and wealthy background. Those people that want to be different and willing to pay a big amount of money to show their status and images. Mini has used “un-traditional” way to advertise its products. Only $20 million was spent on traditional media in 2012 such as television, compared to $80 million spent by its competitors Fiat. Under direction of BMW group, beside TV and Magazine advertising, an extensive amount around @20.7 million euro was spent on E-marketing to bring people awareness about the product. As it is a technology world today, the Yo ungers would prefer accessing the internet to search for wanted information, rather than sitting at home and watch television. In addition, customers can access and see the cars in a fancy...
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