Cooper Industries’ Corporate Strategy
COOPER
Cooper Industries’ Corporate Strategy (A)
Brayan J. Coin
5/3/2010
Prepare: Cooper Industries’ Corporate Strategy
1. What is Cooper’s corporate strategy? How is Cooper Industries adding corporate value to its portfolio of businesses? Would you recommend any changes in corporate strategy?
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 for further expansion of the Cooper Empire. Let’s now look at ways they add this value to the Cooper Portfolio.
Cooper empire added value to the corporation in a variety of ways:
Manage Cooper’s over all corporate portfolios
• Pursuing companies have stable earning or earning counter cyclical to oil and natural gas
• 30 years acquired more than 60 manufacturing companies
• Retain only best top leadership from the acquired business
• Centralized activities including managing inventories, sales, shipping, billing and headquarters.
• Over 30 divestitures in under 20 years in efforts to only keep business that would continue to add value
• Half of growth depends upon internal growth and other half from acquisitions
• Reviewed about 100 potential
Cooper Industries’ Corporate Strategy (A)
Brayan J. Coin
5/3/2010
Prepare: Cooper Industries’ Corporate Strategy
1. What is Cooper’s corporate strategy? How is Cooper Industries adding corporate value to its portfolio of businesses? Would you recommend any changes in corporate strategy?
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 for further expansion of the Cooper Empire. Let’s now look at ways they add this value to the Cooper Portfolio.
Cooper empire added value to the corporation in a variety of ways:
Manage Cooper’s over all corporate portfolios
• Pursuing companies have stable earning or earning counter cyclical to oil and natural gas
• 30 years acquired more than 60 manufacturing companies
• Retain only best top leadership from the acquired business
• Centralized activities including managing inventories, sales, shipping, billing and headquarters.
• Over 30 divestitures in under 20 years in efforts to only keep business that would continue to add value
• Half of growth depends upon internal growth and other half from acquisitions
• Reviewed about 100 potential