History:

Origin: Yorkshire, England, 1950s with Hanson and White Ltd. a greeting card company, which was sold in 1963. 1st Acquisition Oswald Tilloston, A vehicle distribution company was later acquired by Wiles Group ltd, in turn Hanson and White acquired substantial ownership in Wiles group, leading to management control Name change to Hanson trust Series of small acquisition, by 1973, Hanson trust had a combined sale of 120 Million dollars
Due to politically and economically unfavorable environment in Britain, Hanson trust decided to explore North America, with Gordon white moving to US and Hanson running the show in Britain Next there were series of acquisition on both sides of ponds. These were both friendly as well as hostile take over. Attach a table to deals here

Corporate Level Strategy:

Hanson PLC follows a corporate level strategy of unrelated diversification. Following are some of the benefits of this strategy 1. Risk Reduction ( By spreading the investment over several industry, the risk is reduced in case one industry experiences downward business cycle 2. Economies of Corporate services: By eliminating expensive corporate structure ( offices and people) , it reduces the cost. In addition, it provides cost reduction where service like IT , Finance can be shared among BUs Business Level Strategy: Business level strategies are pursued in two main categories. Cost leadership and Differentiation. Cost leadership: By eliminating cost related to corporate structure , Business unit achieve great reduction in SG&A . Structure and Control system

Hanson PLC have a very simple structure. ( exihibit3). Following are the benefits of this model

Decentralization: Each Business unit almost works as an independent unit. Corporate does not interfere in the day to day operation of the BUs These Bus take their own operational decision and create their own business strategy. Tight Financial control : Corporate exercise tight control over expenditure decision. Corporate have only say in finance and investment decisions. Incentive System: Board Structure: De-emphasizing Operating synergy

SWOT ( Somewhere needs to incorporate financial ratios) 1. Strength a. Large Cash Reserve plus ability to borrow more if required b. Great incentive system enticing manager to achieve better results c. Have a great model to drive cost down by reducing corporate level cost down d. Have a great history of turning sick company profitable 2. Weakness a. Dividend growth are unsustainable that might lead to shareholder dissatisfaction b. No Synergies between Business units. c. Have a bad reputation as asset stripper , that may make companies not to deal with Hanson Plc. d. Employees from acquired company might have resentment towards Hanson PLC for takeover and disrupting their ways of living e. 3. Opportunity a. Should look into creating synergies between different BUs to reduce cost down b. 4. Threat a. Fewer companies are available that fits the acquisition philosophy of Hanson. b. Govt might intervene to stop predatory behavior of companies like Hanson Problems with Current Strategy 1. Maintaining high dividend would be very difficult, given the they are already at a record level 2. There are fewer and fewer company that Hanson can acquire that fit its acquisition philosophy

3. Continuity problem: There seems to be concerns related to future leadership as there isnt any viable candidate visible after Hanson and White. In addition, both of these gentlemen are getting old 4. Bad Reputation as Asset Stripper. 5. Profit today philosophy in incentivizing manager might be hurting investing back in company for future growth.

Recommendations: 1. Need to change the model used for acquisition so more companies can be looked at 2. Need to identify next CEO and should start grooming him/her. This will give investor some level of confidence that the company will continue beyond current owners 3. Need to invest in companies for future growth 4. Need to find synergies between BUs to reduce cost 5.