Cooper Industries

Topics: Industry, Management, Manufacturing Pages: 2 (485 words) Published: March 2, 2015
Cooper Industries

1. What is Cooper’s corporate strategy? How does it create value? What are Copper’s key resources? 2. Should Cooper Industries acquire Champion Spark Plugs? (How is this acquisition likely to affect shareholder value?) 3. What are the limits to Cooper’s corporate strategy?

Cooper’s corporate strategy is to expand the company to lessen its dependence on the cyclical natural gas business and to exhibit stable earnings. The way they achieved this over the years was through the merger and acquisition of more than 60 manufacturing companies in order to increase the size and scope of the company. Cooper acquired businesses that had stable earnings, a broad customer base, and proven manufacturing operations using well-known technologies. The company started by acquiring low-technology manufacturing companies that had premium-quality products with strong brand names. After they acquired these companies they would update the processes, equipment and consolidate the plants. They were even known for moving entire plants to other locations in the South just to get away from old practices. By using this process which would be called “Cooperization” the company put together a group of independent, over-the-hill companies into a highly efficient, profitable, competitive business. The company created value because it decided to pursue only companies that had stable earnings and earnings which would counter the cyclical natural gas industry. The company would ensure that it had consistent earnings by focusing on products that served basic needs and which were manufactured through mature production technologies. It further created value by dividing its management with a number of operating division managers underneath. This gave each division manager the responsibility of its own division’s operations which prevented it from interfering with any other divisions. Other ways in which they created value were by transferring proven practices around...
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