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Strategy in Operating Decisions |
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Mark Controls Corporation |
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The University of Chicago - Graduate School of Business |
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By H. Edward Wrapp |
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Page 1 2 3 4 5 6 7 |
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Corporate Strategy
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The basic strategy for Mark Controls was developed by company management in 1969 under the direction of Gary MacDougal, the Chief Executive Officer. It remained essentially the same in 1980, and had been published every year in the company’s annual report:
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1. Build a major multinational (Fortune 500) corporation, primarily in the field of flow control equipment, equipment for the energy industries, and other related products and services with particular emphases on the following growth areas: |
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Energy management and control systems, equipment, and related products. |
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Equipment for petroleum refining, chemical, and other process industries. |
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Petroleum production equipment. |
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Water management equipment and systems. |
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Power generation equipment. |
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Pollution control equipment and systems. |
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2. Achieve well above average earnings per share growth through an effective combination of internal earnings improvements and selective external growth through acquisition. |
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3. Capitalize on the growing needs of flow and energy control equipment users for increased technical and service support and broader systems capability by: |
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Acquiring companies with technical and marketing organizations which are complementary to those of Mark Controls. |
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Focusing product development and acquisition efforts primarily on proprietary products and systems with substantive technical content. |
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Increasing technical capabilities and marketing orientation of the present Mark Controls organization. |
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Developing a broad range of services to assist customers in solving problems. |
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4. Achieve a market share of at least 20% in all major market segments in which the company competes by: |
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Anticipating customer requirements with new products and services through major commitments of engineering resources. |
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Developing strong distribution and representative networks to provide increased availability of the company’s products to all major market areas. |
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Increasing direct sales coverage of major end-users and distributors through reduced territory size and an increasing number of capable field sales and field engineering personnel. |
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Maintaining the company’s leading reputation for quality products and for meeting delivery commitments. |
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Increasing both product and market specialization to the maximum degree feasible in the marketing and field sales organizations as appropriate for each individual territory and market. |
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Becoming the most cost-effective producer in each of the company’s product areas. |
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5. Develop a competitive advantage in the management of these activities by attracting and retaining high talent manpower at all levels in all areas of the business by: |
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Making every effort to involve all employees of Mark Controls as partners in the business, both through attractive stock ownership opportunities and by participation in decision making. |
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Investing heavily in employee training and communications and by emphasizing promotion from within. |
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6. Build a major Mark Controls international business primarily through direct ownership and manufacturing, but also through licenses and exports, such that international activities represent approximately one-third of Mark Control’s sales and profits. |
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7. Conduct an ambitious but highly selective acquisition effort which: |
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Focuses on companies with related products and markets. |
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Maximizes the
effectiveness of the company's management resources by
concentrating the acquisition effort on companies of significant size in relation to Mark COntrols (generally at least 20%). |
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Is financially structured to avoid earnings dilution. |
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8. Maintain, under normal circumstances, a conservative financial structure with debt averaging approximately 40% of the total capital structure. |
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9. Conduct a business within a framework of the highest ethical standards and social responsibility.
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