Dovers Diversity

Part One

Dover Corporation manufactures industrial products and manufacturing equipment in the United States and Europe. It operates in six segments: diversified, electronics, industries, resources, systems, and technologies. Through these six segments, Dover Corporation manages more than 50 companies that make equipment ranging from garbage trucks to ink-jet printers. Dover Corporation focuses its acquisition process on finding larger, entrepreneurial companies with strong growth margins. By using the related link diversification strategy, Dover has established the six segment structure, and also the “stand alone” and “add-on” approach within these segments which allows for only limited links between businesses.

Finding and acquiring solid companies has been and continues to be a critical driver in Dover’s growth by using criteria such as finding the best market leadership and brand strength, a record of new product development, an experienced management team and solid financial performance. The ever increasing global focus, as well as the preference for companies that have well-developed intellectual property portfolios, allows Dover to take notice of companies based upon their size, product mix and that are fully independent, referring to them as “stand alone” acquisitions. These acquisitions can simply be plugged into the Dover System.

Once Dover has established a strong hold in an attractive industry, they often look to expanding their presence in that market segment by acquiring “add-ons” or related linked firms. Dover often integrates these businesses into an existing platform to generate additional customer, product, distribution and market synergies to take advantage of new opportunities and for further growth. This procedure allows the links to share some resources and assets between their businesses but mainly concentrates on transferring knowledge and core competencies between businesses.

Dover Corporation is one of the many industries using this type of diversification, and most companies implementing this level are constantly adjusting the strategy mix in their portfolio of businesses. These companies listed with Dover are all classified as related linked diversification because less than 70% of revenue comes form the dominant business, and there are only limited links between businesses.

Part Two

Dover’s management team uses several tactics and considers many overall factors in creating value for the firm’s business units. First, Dover puts a strong emphasis on their ability to grow and in doing so, enforces new product development, responsive customer service, pricing initiatives, and market share gains. Secondly, Dover stresses a superior acquisition process in efforts of penetrating new market segments and obtaining certain advantages, such as capitalizing on cost in competitive manufacturing and source opportunities. Next, Dover has established a supply chain council in efforts of optimizing buying power with various vendors and suppliers. From this council, Dover is better equipped in highlighting such strong and beneficial connections with these important figures in the market, and by doing so, many competitive advantages, such as low costs, can be achieved. Next, Dover primarily concentrates on acquisitions that relate to well established, financially strong, and developed companies. With this high standard, Dover is able to eliminate potential threats that would eventually enable the firm to grow. Lastly, Dover’s culture reflects a combination of values and expectations that, while not individually unique, together creates an environment that they believe sets them apart from their competitors. Their historical emphasis on uncompromising integrity, individual and company responsibility, operational excellence and unparallel customer responsiveness has enabled them to attract high caliber companies and retain strong management