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 …show more content…
In 1967, Crescent Niagara Corporation, a well-known and high-quality manufacturer of wrenches, pliers and screwdrivers was acquired. This acquisition was important for Cooper’s product policy even though company performance had suffered a bit in recent years. Finally in 1970 Weller Electric Corporation that was world’s leading supplier of soldering tools with operations in Europe and Mexico was acquired.
Even though Nicholson’s performance in recent times was below par, it was believed that there was a lot of potential for improvement with appropriate policies that would turn its potential into healthy profits. Nicholson’s competitive advantages is a major source of its attraction. It is one of the largest domestic manufacturers of hand tools and leader in two main products. Files and rasps held 50% market share of total market of $50 million. Its saws and blades held 9% market share of $200 million, only two other companies had larger market shares in this segment. Nicholson’s overall product is of very high-quality with a broad market. In addition, Nicholson has excellent distribution system in the United States and Canada through marketing to more than two thousand hardware wholesalers who in turn sell to more than fifty thousand retailers. Nicholson had significant international presence with overseas sales to more than 137 countries through 140 local sales representatives……………..
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