Emerson Electric Co.
Internal Analysis * 36+ years of improved EPS. * Domestic electrical manufacturer. * $708M in profit in 1993. * $2 billion in international sales. * Joint ventures are a growth area with 40% of total sales. * Divisions are organized into eight segments.
External Analysis: 5 forces * New Entrants: Low because there are only a few key successful players in the industry. * Rivals: High because competition among key players is fierce; all big brand names. * Threat of Substitutes: Medium/Low because there are substitutes but they are of lower quality and do not have the brand recognition.
Company Strategies Corporate Strategy * Related Diversified: Emerson Electric Co produces a broad range of electric, electromechanical, and electric products for industry and consumers * Diversified St. Louis company. * Related through core competencies: * The eight segments share distribution channels, organizational capabilities, as well as technologies. * Corporate staff is small; top management believes a large corporate staff will create more work for the divisions. Business Strategy * Build: international joint ventures are a growth area with 40% of sales. * Emerson follows a growth through acquisition strategy but no one acquisition has been very large. * CEO believes in constant improvements in order to achieve growth and strong financial results. * Increased investments to 1.8 billion. * Growth rates are set above economic expectations. *
Competitive Advantage * Best Cost: went from low-cost to best cost and focused on: * Quality & customer satisfaction. * Knowledge of the competition. * Process and Product design. * Employee communications and involvement. * Cost reduction. * Strategy.
Key Success Factors
* Quality: less than 100 defects per million motors. * Capital investments were
External Analysis: 5 forces * New Entrants: Low because there are only a few key successful players in the industry. * Rivals: High because competition among key players is fierce; all big brand names. * Threat of Substitutes: Medium/Low because there are substitutes but they are of lower quality and do not have the brand recognition.
Company Strategies Corporate Strategy * Related Diversified: Emerson Electric Co produces a broad range of electric, electromechanical, and electric products for industry and consumers * Diversified St. Louis company. * Related through core competencies: * The eight segments share distribution channels, organizational capabilities, as well as technologies. * Corporate staff is small; top management believes a large corporate staff will create more work for the divisions. Business Strategy * Build: international joint ventures are a growth area with 40% of sales. * Emerson follows a growth through acquisition strategy but no one acquisition has been very large. * CEO believes in constant improvements in order to achieve growth and strong financial results. * Increased investments to 1.8 billion. * Growth rates are set above economic expectations. *
Competitive Advantage * Best Cost: went from low-cost to best cost and focused on: * Quality & customer satisfaction. * Knowledge of the competition. * Process and Product design. * Employee communications and involvement. * Cost reduction. * Strategy.
Key Success Factors
* Quality: less than 100 defects per million motors. * Capital investments were