Essay About 2016Cooper Industries Case Study And Cooper Industries

Cooper Industries
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Hardin Simmons UniversityMgmt StrategyJohn Paul LowenthalOctober 27th, 2016Cooper Industries Case Study:Brief History:Cooper Industries was founded in 1833 in Mount Vernon, Ohio as an iron foundry, which in 1900 evolved from a steam-powered engine that generated power to producing natural gas compressors.In 1950 Cooper was still a small company with about $50 million in annual sales. Developed production expertise and good customer service.1929, the first merger Cooper had with Bessemer.In 1958 Cooper suffered a cyclical downturn, which led them to discuss new strategies for growth. Their start in mergers and acquisitions began.1961 Robert Cizik joins the Cooper team.1965 the company changed its name to Cooper Industries. By this time their internal structure had changed to a “relatively simple, yet highly flexible organizational structure.”Cooper Industries Core Competencies:Expertise in Mergers and Acquisitions.Substantial investment capital in the form of cash.Good, quality products.Good management and executive teams.SWOT Analysis:STRENGTHSWEAKNESSESHigh diversification of business, moderates risk.Cooper Industries high quality productsVery strong management skills from top to bottom, Decentralized.Mergers and Acquisitions’ companies well incorporatedStrong company culture. Low costCulture not easily adaptable after M & A. Especially managers.Difficulties in following each division in detail financially.Too much diversification.OPPORTUNITIESTHREATSExpanding their business out of North America with a new line of products. Based on new technology (electronic products)Acquiring Champion or CameronDecreasing sales therefore revenue for the tool market.Recent decline in certain industries that may affect revenues from sales. (Petroleum)Industries:        Cooper industries have many divisions that take care of a specific group of Mergers and Acquisitions. These M&A are categorized and brought together with other companies to maintain organization. The industries Cooper is in are:Electrical and ElectronicCrouse Hinds, RTE & Mcgraw, Cooper Lightning, Belden Cable.Commercial and IndustrialTool Group, Automotive Group, Airmotive.Compression, Drilling and Energy Equipment (key driver of growth but high volatility)Gardner Denver, JoyStrategies:        Their main strategy for growth was diversification through Mergers and Acquisitions. This strategy involved having vertical and horizontal integration by merging and acquiring different companies therefore extending their line through industries. Cooper Industries performed Divisional strategy by seeking complementary acquisitions. For instance, making acquisitions that will have logical extensions of existing products. Corporate Strategy involved diversification of acquisitions like Airmotive by repairing jet engines, having centralized financial control, cost cutting philosophy, and great adaptability and accommodation to their external environment. Their corporate objective is the increase shareholder value.