...Cooper Industries Inc. Based on the given information in the case study regarding the acquisition of Nicholson File Company by Cooper Industries, there is no question that Cooper should try to gain control of Nicholson. This decision is based on an analysis of the bargaining positions of each group of Nicholson stockholders which have disparate goals and needs that need to be met. In addition, an appropriate payment method and specific dollar value based on a competitor's offer and Cooper financial data was decided. The remainder of this paper will provide the analysis and rationale for this determination. Should Cooper Industries Acquire Nicholson File Company? Cooper Industries has been expanding through diversification since 1996. Cooper's requirements to acquire a company has three major components. The target company must be: 1. In an industry in which Cooper could become a major player 2. In an industry that is fairly stable, with a broad market for the products and a product line of small ticket' items; and 3. A leader in its market segment. When looking at the criteria that Cizik's company (Cooper Industries), set forth relative to acquisitions, the acquisition of Nicholson meets all three objectives plus has significant potential short and long-term potential. Cooper management feels that by eliminating redundancy and streamlining Nicholson's operations this potential can be realized. Currently, Nicholson's financial history boasts a 2% increase in profit...
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...Re: Cooper Industries’ Corporate Strategy (A) Diagnosis: Cooper Industries’ growth depends on its widely diversification. From 1960 to the following 30 years, the company purchased about 60 manufacturing companies that increased the size and scope of Cooper Industries. With its experience and strength in “Cooperization”, it has been able to digest the companies it purchased and welded the company into a highly efficient, profitable, competitive business. But they acquired too much debt due to it diversified its business too quickly. It leads whether or not acquires Champion and Cameron Iron Works became to the biggest problem when the case was written, which would raise the debt-to-capital ratio to 55% to 60%. If they leave the problem unaddressed, they might risk bankruptcy in the future. Analysis: Both of Champion and Cameron Iron Works were in related industries, automotive and petroleum equipment, which were profitable businesses. Cooper Industries was already doing those two businesses. For the opportunities identified in the case have to do with the purchase of Champion and Cameron Iron Works, both of them have a strategic fit with Cooper Industries’ long-term plans. For example, Champion has a poor management, old technology, and failures at diversification. But Cooper Industries is good at this field. Cameron Iron Works had a biggest Compression and Energy Business Segment until 1981. But it was the smallest segment of Cooper Industries. Moreover, Cameron Iron Works...
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...Cooper Industries’ Corporate Strategy I. Situation of the company Cooper Industries was the manufacturing company have the three group of business. The three group business are Electrical & Electronic, commercial & industrial, and compression & drilling. All this group had created growth in term of revenue by doing acquisition. Initially, Cooper was the recognized leader in pipeline compression equipment. However, the company had developed production expertise and had built a reputation for customer service in the natural gas industry as well as extracted gas from underground wells. Electrical and Electronic. The E & E segment was Cooper’s largest in 1988, generating one-half of corporate sales and 57% of operating profits. Cooper had entered this segment with the 1981 purchase of Crouse-hinds. By 1988, E&E had four sub-segments, each representing quite diverse business, but all focused on the mature North American market that accounted for over 90 percent of segment sales. Commercial and industrial. In the commercial and industrial segmen Cooper participated in the non-powered handtool and window treatment business, and in the automotive aftermarket. In the Tool group, consolidation of acquisitions was completed and new manufacturing of acquisitions was completed and new manufacturing facilities constructed by 1988, and the company held the preeminent market position in most of its tool lines. Compression, drilling and energy equipment Compression and drilling...
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...Cooper Industries Inc. Based on the given information in the case study regarding the acquisition of Nicholson File Company by Cooper Industries, there is no question that Cooper should try to gain control of Nicholson. This decision is based on an analysis of the bargaining positions of each group of Nicholson stockholders which have disparate goals and needs that need to be met. In addition, an appropriate payment method and specific dollar value based on a competitor's offer and Cooper financial data was decided. The remainder of this paper will provide the analysis and rationale for this determination. Should Cooper Industries Acquire Nicholson File Company? Cooper Industries has been expanding through diversification since 1996. Cooper's requirements to acquire a company has three major components. The target company must be: 1. In an industry in which Cooper could become a major player 2. In an industry that is fairly stable, with a broad market for the products and a product line of small ticket' items; and 3. A leader in its market segment. When looking at the criteria that Cizik's company (Cooper Industries), set forth relative to acquisitions, the acquisition of Nicholson meets all three objectives plus has significant potential short and long-term potential. Cooper management feels that by eliminating redundancy and streamlining Nicholson's operations this potential can be realized. Currently, Nicholson's financial history boasts a 2% increase in profit annually...
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...For the exclusive use of C. SULLIVAN Harvard Business School 9-391-095 Rev. April 18, 1995 Cooper Industries’ Corporate Strategy (A) The business of Cooper is value-added manufacturing. – Cooper Industries’ management philosophy Manufacturing may not be glamorous, but we know a lot about it. – Robert Cizik, Chairman, President and CEO Cooper Industries, a company more than 150 years old, spent most of its history as a small but reputable maker of engines and compressors to propel natural gas through pipelines. In the 1960s, the firm’s leaders decided to expand the company to lessen its dependence on the capital expenditures of the cyclical natural gas business. During the next 30 years, the company acquired more than 60 manufacturing companies that dramatically increased the size and scope of Cooper Industries (Exhibits 1 and 2). Through a process that both insiders and outsiders called “Cooperization,” the company welded a group of “independent, over-the-hill companies into a highly efficient, profitable, competitive business.”1 By 1988, the diversified industrial products company derived $4.3 billion in annual revenues from manufacturing 2 million items. Cooper’s products ranged from 10¢ fuses to $3 million turbine compressor sets marketed under an array of brand names, the most famous of which was Crescent wrenches. “We decided a long time ago,” said Robert Cizik, chairman, president, and CEO, “that if we could do an outstanding job at the unglamorous part by making necessary...
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...M&A, BARUCH COLLEGE, FALL 2012 Prof Harvey Poniachek Questions for Cooper Industries Harvard Case Study THE CASE SHOULD BE DONE BY TEAMS OF UP TO FOUR STUDENTS. The CASE WOULD BE PRESENTED AND DEFENDED IN CLASS BY TWO TEAMS. I EXPECT MANY OF YOU TO MAKE CLASS PRESENTATIONS BY UTILIZING POWERPOINT AND/OR OTHER MEANS. THE QUESTIONS BELOW WERE SUGGESETD BY THE AUTHORS OF THE CASE AND ADDRESS THE MAIN THE ISSUES, BUT YOU MAY EDIT / CONSOLIDATE THEM IF YOU FIND IT NECESSARY / CONVENIENT IN WRITING UP YOUR CASE. Cooper industries 1. If you were Mr. Cizik of Cooper Industries, would you try to gain control of Nicholson File Co in May 1972? ➢ yes o potential profit o COG from 69% to 65% o Saling expense from 22% to 19% o Leveraging European distributed system o Take benefits of the conflicts between VLN and Porter 2. What is the maximum price that Cooper can afford to pay for Nicholson and still keep the acquisition attractive from the standpoint of Cooper? As given in the case, Cooper Industries will get several synergies after the merger. 1) Cost of Goods sold of Nicholson could be reduced from 69% to 65%. 2) Elimination of the sales and advertising duplications would lower selling, general and administrative expense from 22% to 19% 3) Cooper will gain access to Nicholson’s strong European distribution system to sell its other hand tool lines. Based on the above factors, we prepared the pro forma statement...
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...The Better Investment Cooper Tire vs. Goodyear Tire Analysis from years 2009-2013 September 25, 2014 Alex Anderson Robert Patterson Mason Ruesch Executive Summary Cooper Tire & Rubber Company has been history that goes back 100 years to 1914 (History). The company was started by John F. Schaefer and Claude E. Hart as together they purchased a manufacturing company that focused on tire patches, and tire cement and repair kits. The company slowly expanded and grew becoming publicly a held corporation and eventually became listed on the New York Stock Exchange in 1960 (History). 23 years later, Cooper Tire & Rubber Company joined the ranks of the Fortune 500 companies as one of the largest industrial companies in the United States (History). Today, Cooper Tire & Rubber Company and its family companies is truly global, claiming over 65 manufacturing, sales, distribution, technical and design facilities located around the world (History). Goodyear Tire & Rubber Company was founded in 1898 by Frank A. Seiberling (Goodyear Corporate). Beginning with a mere 13 employees, production began with bicycle and carriage tires, horseshoe pads, and poker chips with wages ranging from 13 to 25 cents an hour. Since then, Goodyear Tire has grown tremendously and in 1926 became the world’s largest rubber company (Goodyear Corporate). Today, both of these companies have been competing to gain advantage in the market share, not only against each other, but other companies within...
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...Economic Data In the 1970’s, Sears was a major economic player in the tool industry. They were originally called Sears and Roebuck until the early 1970’s, but since then the Roebuck part of their name has been dropped. During the early 1970’s was when Sears began to develop more business in a retail setting, as they began expanding heavily into suburban shopping malls and doing less business through their mail-order catalog, which, historically, was what had made them a well known company. The major brand that Sears holds that could have competed with Cooper/Nicholson is the Craftsman brand, which was registered by Sears in 1927 and was recently names one of America’s most trusted brands. From 1970-73, the US economy grew by an average of about 3.8% per year, and an average of 2.7% per year from 1974 onward. The 1970’s saw the rise in a term called “Stagflation”, meaning that the economy was growing slower than expected (stagnant), and inflation was happening to prices. It is believed that the inflation was the caused by the Vietnam War and President Lyndon Johnsons “Great Society” Programs. Those programs were a series of increases in government spending aimed at improving education, medical care, and transportation, all while helping to eliminate problems in urban centers. Unemployment was high back in the 1970’s, due to the large number of women who were attempting to enter the workforce, combined with the fact that there were very few jobs available. Additionally, major...
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...example of an explanatory research study. Emil Vicale formed a theory based on the forces that caused a certain phenomenon to occur (Cooper & Schindler, 2014). Mr. Vicale detected the need of personalized action figures based on individual requests after friends and acquaintances saw his personal collection. To determine viability of the action figure business, research was started by searching the internet for viability of the action figure business. It was determined there were dozens of companies worldwide, and Hasbro would be the biggest competitor. He also concluded that action figures take up most of the space in the toy aisle. The research was done to justify the phenomenon of personalized action figures and to determine the feasibility in the industry. The explanatory study was conducted to answer the “why and how questions” (Cooper & Schindler, 2014, p. 22). Research The research was not clearly defined; the product was created prior to conducting an industry needs analysis, it was not until the product had been created that research was done. The purpose was not in writing, nor were the scope, limitations, or language included in a formal statement (Cooper & Schindler, 2014). The research was not process detailed. Mr. Vicale provided little procedural detail that would allow another researcher to repeat the research (Cooper & Schindler, 2014). Mr. Vicale searched the internet...
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...Cooper Industry Case Analysis Cooper Industry is an engines and compressors maker with a history more than 150 years. It had been a small company but with good reputation until 1960. In 1960, Cooper expanded its business by acquiring other manufacturing company. It had a famous process call “cooperization” which brought up with many highly efficient, profitable, and competitive businesses. In 1989, Cooper was considering more acquisitions. It first won the bidding with a $21-a-share tender offer and purchased the Champion. It also considered a $700 million bid for Cameron Iron Works. The strategic issue in this case would be whether or not Cooper should complete the purchasing even with a high financial risk and profound operational and organizational ramification. Fist let’s use Porter’s Five Forces to analyze Cooper Industry. Bargaining power of new entrants Level: Medium Cooper tried to fulfill their goals of growth and diversification through acquisitions, and they did success. The diversification allowed Cooper to do the business in many different industries. For example, Cooper began the diversification in 1967 when it acquired the Lufkin Rule Company- a hand tool business. After that, it acquired two more hand tool business companies in 1968 and 1970. Although there were competitors in all the industries that Cooper diversified into, the operation strategy makes Cooper have a stable market shares in different industries. Bargaining power of substitutes. Level:...
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...Financial Statement Analysis Project Goodyear Tire& Rubber (GT) *Official Logo copied from (Goodyear Tire & Rubber Company official website, 2013) Corporate Name The Goodyear Tire & Rubber Company Exchange Traded In National Association of Securities Dealers Automated Quotations (NASDAQ) Ticker Symbol GT Description The Goodyear Tire & Rubber Company has a long journey of success of more than a century. Frank A. Seiberling, the founder bought first plant of the company, when the bicycle boom was spreading out around the world. The Goodyear Tire & Rubber Company was initially incorporated with a capital stock of $ 100,000, on August 29, 1928. (Goodyear Tire & Rubber Company official website, 2013) "More people ride on Goodyear tires than on any other kind" was adopted, as the slogan of the company in 1916 and 10 years later in 1926, The Goodyear Tire & Rubber Company became the largest rubber company in the world. (Goodyear Tire & Rubber Company official website, 2013) Goodyear Tire & Rubber Company took a long 53 years to reach the milestone of billion-dollar-year. At present, sales of Goodyear Tire & Rubber Company has a figure in $20 billion. (Goodyear Tire & Rubber Company official website, 2013) *Official Logo copied from (Cooper Tire & Rubber Company official website, 2013) Corporate Name Cooper Tire & Rubber Co Exchange Traded In New York Stock Exchange (NYSE) Ticker Symbol CTB Description The history of Cooper Tire Company actually dates...
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...Cooper Industries. Inc If you were Mr. Cizik of cooper industries, would you try to gain control of Nicholson file co. in may 1972? Acting as Mr, Cizic we would pursue Nicholson aggressively for a number of reasons. Nicholson would complement Cooper’s hand tool business, with additional synergies to be had through cost cuts and sales opportunities. The acquisition would also be in line with Cooper management’s long term growth and acquisition strategy as Nicholson is undervalued relative to its book value, and is in a niche which will compliment Cooper’s existing business. Our analysis shows there will be opportunities for operating synergies resulting in reduction of cost of goods sold from 69% to 65% of sales, and reduction of selling and general administrative expenses from 22% to 19%. Moreover, Nicholson is growing at 2%, which is well below the industry average of 6% and Cooper can move Nicholson towards that potential. Nicholson also has strong distribution systems in Europe, which can be a great asset for Cooper, as Cooper has no distribution in Europe. Cooper products are generally sold into industrial markets while Nicholson products have a stronger presence in the consumer market. The merger would give Cooper the opportunity to increase sales into the consumer market through Nicholson’s sales channels, and sell Nicholson’s products into the industrial markets through their own sales channels. What is the maximum price that coopers can...
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...Sample Answer For Cooper Industries Case Study Cooper Industries Inc. is the manufacturer and leading producer of engines and big compressors for oil and gas extraction industry. The firm had been heavily dependent on oil and gas sector for its sales and major earning; fluctuations due to cyclic nature of industry concerned its management. Although long-term sales and earnings growth for Cooper had been above average, its stock was less attractive to investors due to higher risk and earnings volatility. Cooper’s earlier acquisitions resulted in diversity of markets but did not result in reduction of earnings volatility.To reduce the risk, management initiated an acquisition strategy to diversify its product portfolio. An acquisition criteria was established that called for acquisition of leading companies of their respective market segments. Cooper acquired three different companies under its acquisition strategy but failed to tempt management of Nicholson File Company for a merger three years ago. However now with Nicholson in play, there was an opportunity for Cooper to acquire a controlling interest in the company. In May 1972, Robert Cizik, executive vice president of Cooper needed some answers before proceeding with appropriate course of action for this opportunity. QUESTIONS 1. Should Mr. Cizik of Cooper Industries try to gain control of Nicholson File Company in May 1972? 2. What is the maximum price that Cooper can afford to pay for Nicholson and still keep the acquisition...
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...Children's Hospital Executive summary The health care market in the Northeastern Ohio has been experiencing tremendous changes in the last few years. These changes have been more prominent among the health services for seriously ill children. Institutions that have in the past been involved in other health care services have turned to pediatrics. In order to combat this, Akron Children's Hospital has resulted to trying to understand the decision making procedures on institution or physician selection among the parents with seriously sick children. This was in an effort to differentiate itself from the other health care service providers. With the identification of similarities in advertisement approaches within the major contenders for the Industry, more unique differentiation strategies were sought through researches to identify how to best communicate with the customers in a unique way that would give the company a competitive edge over other service providers. Marcus Thomas LLC, the researcher contracted by Akron Children's Hospital, used telephone interviews and focus groups in learning the decision making behaviors. In both research approaches, parents with children between the ages of one month and eighteen years were sampled. The geographical spread of the sample exceeded the Summit County, where the hospital is based. From the survey, it was inferred that the decision makers use their emotions rather than rationality when making decisions on health care provision for their...
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...management dilemma that modern businesses encounter is identifying innovative ways to reduce costs. A way businesses can reduce costs is through changing the organizational structure. It is the function of management to organize the resources, locations, and authority within the organization to ensure optimal use of resources, manpower, money, capital, and equipment. The purpose of the research study is to determine whether outsourcing to an overseas corporation will provide enough cost savings to maintain their competitive advantage. Clarifying the Research Question Research questions are open-ended questions, with the objective of discovering future tasks, identifying variables, ethical considerations, and defining the hypothesis (Cooper & Schindler, 2011). This step is essential to ensuring that the research team solves the right management dilemma. U.S. based companies outsource with the goal of lowering the cost of production but prior to the research team would develop a lot of research questions....
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