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Cooper Industries’ Corporate

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
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
9. Cooper trimmed the sales and administrative
expenses and cut the working capital.
10.Electrical industry-
a. Cooper combined R&D of RTE and McGraw to reduce the
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
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!