Cooper Industries' Corporate Strategy

802 Words May 8th, 2012 4 Pages
22-03-2012

Morena Xodo (matr. 639471)

COOPER INDUSTRIES’ CORPORATE STRATEGIES

Cooper industries’ is a broad company that strongly uses M&A strategy of diversification. But diversification for Cooper doesn’t mean just ‘adding, adding and more adding’. Division managers seek for ‘complementary acquisition’ defined as logical extensions of Cooper’s existing products or markets; furthermore they keep examining what they have, not being afraid to get rid of companies that have served their useful time; this process was defined as ‘cooperization’. Then, after each acquisition the interneal structure was modified, if necessary. But why diversify? Everything started from the cyclical downturn suffered from Cooper in 1958, this experience
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With its Management Developing Planning system the company is able to align all the business units in three business segments, even though this system is ‘extremely time consuming’ and ‘so much work’ i think is the best way to ‘keep together’ the different segments (electrical and electronics, commercial and industrial, compression, drilling and energy equipments). About the acquisitions of Champion and Cameron, both companies would give Cooper good opportunities, and following the guidelines for acquisitions seems that both companies fit in the group. If i can base my considerations on the successful history of Cooper’s acquisitions, i would suggest him to acquire both, without worrying that their debt to total capitalization ratio would be around 60%. Champion has a strong brand name, is compatible with the electrical and electronic product line, and acquiring Champion, Cooper will have the possibility to expand overseas, the main problems are that Champion have poor management, old technologies and more relevant has little growth over the past years. But in my opinion they can be seen as opportunities to exploit, the company in the hands of Cooper can grow. Cameron would expand the Cooper’s Compression and Energy Business Center, the company is not much mentioned in the case and financial data are not available. They are a iron works, that
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