The Shareholders Interest And Bargaining Power

Purchased plant for good price…with new equipment and deleted marginal product lines as they expanded nationally

So with business going so well for Solectron, how did everything go wrong for the company starting in 2001? Revenue fell from $6.5 billion in 3rd quarter 2000 to $2.2 billion in the same quarter of 2001. The company laid-off 20,000 employees; its stock plummeted; it was faced with plant closures, excess inventory and reduction of floor space. Was it a case of poor planning and management or just the company a victim of an economic downturn? This case analysis will explore what Solectron did wrong and what they could have done and offer some suggestions. It is also interesting to note the Solectron foresaw a pending boom in the Asia (China & India) markets and that if it was able to weather the prevailing storm, Solectron stood a chance of rising up again and succeed.

Moreover, Cooper’s corporate strategy is diversification through acquisitions and mergers. This diversification is in both related and non-related

The number one problem effecting shareholders is the collective action problem. This problem can be lessened through the use of proxies, but there are numerous federal proxy rules that must be followed, There are four major elements to these federal proxy rules. (1) Disclosure requirements and a mandatory vetting regime that permit the SEC to assure the disclosure of relevant information and to protect shareholders from misleading communication, (2) Substantive regulation of the process of soliciting proxies from shareholders, (3) a specialized “town meeting” provision (Rule 14a-8) that permits shareholders to gain access to the corporation’s proxy materials and to thus gain a low-cost way to promote certain kinds of shareholder resolutions, AND (4) A general anti-fraud provision (Rule 14a-9) that allows courts to imply a private shareholder remedy for false or misleading proxy materials.

Cooper also divested many less profitable businesses over an eighteen year period from 1970 to 1988. The benefit added by the Cooper conglomerate to its business units justifies the costs associated with a corporate / centralized control. Furthermore, Cooper’s corporate management effectively managed and invested in the best opportunities for growth with little political bias.

The Concise Oxford Dictionary, ninth edition defines the term “activism” as a policy of vigorous action in a cause, especially in politics. From such viewpoint, shareholder activism has its origins in politics. Terms like “activists” and “activism” are commonly used in politics. Hence, shareholder activism can be understood as an intensive action taken by an owner or a person with an interest in a company. Another definition from Wikipedia mentions that activist shareholders use an equity stake in a corporation to put pressure in various forms on the management board. Haigh et al (2004) identifies shareholder activism as a process by which shareholders of a listed firm, under the provisions of securities legislation, can demand members to meet and vote on specific resolutions. Therefore, shareholder activism is used as a tool to draw the attention of the firm’s managers and the board of directors (Schwab and Thomas, 1998).

Cooper’s corporate strategy is diversification through acquisitions and mergers. This diversification is in both related and non-related businesses to lessen its dependence on the capital expenditures of the natural gas industry. Cooper’s started acquiring low-technology manufacturing companies. The companies were premium-quality products with strong brands names mainly still own by the original family owners that have seen

Haier is a Chinese electronical appliances producer and it decided to take a 20 per cent stake in Fisher & Paykel Appliances Company (F&P) which is a New Zealand company. According to their agreement, besides the stake, Haier will also take two seats on F&P’s board and also they will cooperate in various business functions, including product development, sourcing, manufacturing and marketing. This action brought win-win situation to both companies. For Haier, unlike its domestic acquisition strategy, this alliance strategy enabled access to well established

Porter 's five forces of buyer bargaining power refers to the pressure consumers can exert on businesses.

In addition to above mentioned, Porters five Forces (Supplier Power, Buyer Power, Competitive Rivalry, Threat of Substitution, Threat of New Entry) analysis can help to understand more about how Les Mills can improve in the future and what would be the problem to do so. Suppliers power shows that it is very important to find a good supplier for the company, as the competitors arise, sometime the company may need to go into a price fight, but if the supplier keep putting the price higher and higher this would be extreme difficult for the company to compete with other (James Manktelow, 2014). For example for Les Mills, if Les Mills usually bought high price equipment so that to cause their product’s cost is at a very high price and can’t put the price low. Therefore, they might experience a lost. Buyer power is also very important for the company, each

The OECD principles on Corporate Governance (2004) provide that: Shareholders, including institutional shareholders, should be allowed to consult with each other on issues concerning their basic shareholder rights as defined in the Principles, subject to exceptions to prevent abuse.

Under this value-based view, value is only created when revenues exceed all costs including a

Electrolux manufactures an assortment of appliances for professional and home settings the corporation was established in Sweden in 1919 and offers over 40 million products in excess of 150 marketplaces. Electrolux has sales totaling about 109 billion and at this time employs over 61,000 employees. The company is diverse and are marketing their products in countries all over the world, fifty-percent of their transaction is done in the U.S. shadowed by Thirty-percent in Eurasia and the other markets make up the outstanding twenty-percent (Electrolux in brief Electrolux Group, n.d.). An Electrolux product provides consumers with well-made merchandise, and as far as providing consumers with a competitive advantage in excess of others competitive markets, I would say it’s about marginal. The goods are particularly exceptional for instance, there are additional corporations that manufacture the same kinds of goods; nonetheless, for an additional corporation to duplicate their goods accurately it would be very expensive. The Electrolux organization is thriving to achieve success and with their global structure they are capable of aligning assets to reinforce their locus in the appliance market.

Buying other companies is the perfect way to grow market share, by adding new product lines to the catalog, getting exposure to new markets in regions where there was previously no presence and also by adding new business services that enhance the “in house” capabilities of the company. It also adds a new level of expertise from the people who perform the services to the executives that run the company. To fulfill the service and capabilities gap Kaman has been working on a “three-platform strategy” that provides products and services for Power Transmission (PT), Fluid Power (FP) and Automation, Control and Energy (ACE). To make this a reality Kaman has been acquiring companies over the last ten years specifically with the goal of filling in these gaps in order to offer more products and services.

Managers are hired to act on behalf of the shareholders of a firm. However, this is not always the case as both parties have different objectives. The difference in interests between shareholders and managers ‘derives from the separation of ownership and control in a corporation’ (Berk and DeMarzo, 2011: 921). Whereas shareholders are interested in maximising their own wealth, managers may have more personal interests which differ to that of the shareholders. Downs and Monsen (no date, cited in Chin, Cooley and Monsen, 1968:435) suggest that managers self-interest lies in maximising their life-time income and that ‘such self-interest will be congruent with profit maximisation for the firm only in special cases’. This conflict between both