Cooper Industries' Corporate Strategy

Cooper Industries’ Corporate Strategy Ishita Shah 022 Sana Mujawar 045 Saphalaya Rajeevan 046

Seena Maru 048 Shravni Mohile 050

Q1-A. What are the motives for Cooper’s diversification? ● Acquired firms that exhibited stable earnings or earning patterns that are countercyclical to those that cooper already has. ● Acquired products that serve basic and essential needs and that are derived from proven technologies, thereby contributing to the objective of operating in stable markets with predictable growth. ● Acquired manufacturing companies with products that are of high quality and that are leaders in their markets

Q1-B. Do you think there is evidence that diversification has been successful? ● Offered opportunities for enhancing earnings through cost management ● Broaden existing product lines ● Enhance coopers strengthen in distribution ● Strengthen a business unit market position ● Enjoy widespread brand name recognition ● Serve a broad customer base

Q2. How does Cooper Add Value? 1.Complementary acquisitions 2.Tool Group (Lufkin,Weller,Crescent) a. Shut down plants in North and moved to South for skilled workforce b. Eliminated tools of low rates c. Concentrated the production from 3500 tapes to 500 3.Introduced new computer system to manage inventories,billing,etc 4.Centralised the sales and marketing of all the hand tools companies

5. Retained only the best people from each acquisition & trained them 6. Superior acquisition - filled the gap between Cooper’s largest & smallest products 7. Stopped producing compressors for petrochemical industry,resulting in workforce reduction from 1300 to 240 8. Gardner-Denver acquisition- backward integration through natural gas and petroleum exploration. 9. Cooper trimmed the sales and administrative expenses and cut the working capital.

10.Electrical industrya. Cooper combined R&D of RTE and McGraw to reduce the salesforce. b. Eliminated 30-40 positions. c. Savings of $10 million. d. Eliminated duplicate administrative functions 11.Commercial & Industrial a. Effective distribution was key to automotive aftermarket b. Acquired companies benefitted from Cooper’s experience in this

Q3. How related are the new businesses Cooper enters into? ● The businesses were a mix of both, related and unrelated businesses ● They followed two requirements ○ Complementary acquisitions ○ Diversification acquisitions

● Complementary businesses were in line with their belief that diversification should be done in industries whose knowledge they possess ● However, they also ventured into business which did not have same cycle

Thank You!