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Pppresentation
Pppresentation
By:
DIVERSIFICATION AT COOPER
Strategic Challenge: Buy Champion or Cameron or both to reach sustainable competitive advantage? Solutions:
Buy both now
Internal Capabilities VRIO External Opportunities S-C-P
GENERAL ENVIRONMENT
Business Cycles Operating Inefficiencies Increased Competition Need for Consolidation
Solution: Cooperization
LOCAL ENVIRONMENT
Growth from Diversification into:
Related industries: 1967-1970s Unrelated industries: 1980s
High entry barriers (Factories expensive) Intense Rivalry (Target market leaders) Suppliers (Economies of scale) Substitutes (Cheaper Products) Buyers (Stable, profitable, and growing) At Cooper: Crisis = Opportunity
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INTERNAL ANALYSIS
Strengths Clear Acquisition Strategies Management Development & Planning (MD&P) Squeezing & Adding Value Organizational structure Weaknesses Increased Debt Cooper is good at digesting acquisitions!
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Strategic Fit
More Power in the Oil & Gas Industry Develop foreign markets via Champion
Management Expertise
Cameron
Anti-trust issues Serious growth potential?
Higher debt after acquisition: 5560% of capital Can it digest two big meals at the same time?
STRATEGIC FIT
Champion
[-] Mismanaged, Bloated, Money-losing [+] Brand Name & Overseas Markets
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STRATEGIC OPTIONS
Buy
Which one? Champion, Cameron, both?
Status Quo
Do nothing Prepare the company for other buying opportunities Wait until purchase price goes lower or Cooper stock price goes higher
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ACTION PLAN
Conduct Due Diligence on Champion and Cameron & look for Value (e.g.):
Sell Champions executive planes Close Champions losing businesses Downsize Camerons Sales Force Integrate Coopers and Camerons R&D
Make sure No Anti-Trust Issues from Cameron purchase Check liabilities from closures Meet CEOs of companies; make offer ASAP Study International Diversification Strategy
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Presentation Text
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