Cooper Case

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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 for further expansion of the Cooper Empire. Let’s now look at ways they add this value to the Cooper Portfolio.

How does it create value?

As stated by Cooper “the company decided to pursue only companies that exhibited stable earnings, or earnings countercyclical to the oil and gas transmission industry”. The company would ensure consistent earning by focusing on products that…...

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