Emerson Electric Company Mcs

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EMERSON ELECTRIC COMPANY

Table of Contents
Company Overview3
Organizational Structure3
Strategy and Strategic Objectives3
Corporate-Level Strategy3
Business Unit Level Strategy3
Situational Analysis3
Porter’s 5 Forces Analysis3
Key Success Factors (KSFs)3
Boston Consulting Group (BCG) Matrix3
Management Control Systems3
Controls Needed To Meet The Best-Cost Producer Strategy3
Conclusions3
Appendix A – Organizational Structure3
Appendix B – Staff Size Compared to Company Sizeiii
Appendix C – Boston Consulting Group (BCG) Matrixiii
Bibliographyiii

Company Overview
Emerson Electric Company was founded in 1890 as a manufacturer of motors and fans. Today, Emerson is a major domestic electrical manufacturer. It manufactures a broad range of electrical, electromechanical, and electronic products for industry and consumers. In 1993, Emerson reported $708 million profit, which marked the 36th consecutive year of improved earnings per share. In addition, Emerson had $2 billion in unconsolidated sales in international joint ventures. International sales have grown to forty-percent of total sales and present a promising growth area for the company. Organizational Structure

Emerson was organized into forty decentralized divisions consisting of separate product lines with the goal to be number one or two in the market for each product line. After 1990, Emerson reorganized its forty divisions into the following eight business segments: 1. Fractional Horsepower Motors

2. Industrial Motors
3. Tools
4. Industrial Machinery Components
5. Heating and Air Conditioning Components
6. Process Control Equipment
7. Electronics and Computer Support System

This new structure exploits common distribution channels, organizational capabilities, and technologies. To encourage open communication and interaction among all levels of employees, Emerson does not publish an official organizational chart but we have created a chart that might closely represent the structure at Emerson, which can be found in Appendix A. Corporate staff in 1993 consisted of 311 people; the same number as in 1975, when the company was one-sixth its current size in term of sales. Staffs are kept to a minimum because top management believes a large staff will create more work for the divisions. We have depicted this difference in Appendix B.

Strategy and Strategic Objectives
Corporate-Level Strategy
Emerson Electric up until the early 1980’s focused on being a low-cost producer within its industry, however due to a lack of competitiveness globally across its product lines the company required a new strategic direction. Emerson Electric transitioned to a Best Cost Producer Strategy in order to compete well in both the domestic and international marketplaces. This new strategy not only focused on cost-reduction through the planning process but also in continuous quality improvements of the products. There are six elements vital to this strategy: 1. Commitment to total quality and customer satisfaction

2. Knowledge of the competition and the basis on which they compete 3. Focused manufacturing strategy, competing on process as well as product design 4. Effective employee communications and involvement

5. Formalized cost-reduction programs, in good times and bad 6. Commitment to support the strategy through capital expenditures

Emerson is a related diversified producer of products related to electrical manufacturing, either electromechanical or electronic. Emerson’s growth strategy is through acquisitions (primarily foreign) and international joint ventures, in combination with strategic periodic divestitures, to find the appropriate or complementary mix of products. All corporate-level strategies work towards the common goal of stockholder wealth maximization. Business Unit Level Strategy

Based on the Boston Consulting Group (BCG) matrix, see Appendix C, Emerson Electric’s...
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