Dover's diversity and community characteristics

DOVER CORPORATION INC.

According to the annual report 2005, I would classify Dover Corporation as First Mover. It has been very aggressive in its investment and expansion plans. Over the last few years, the firm has been aggressively acquiring and also investing heavily to make room for further acquisitions. In the last one year, the firm has seen solid growth in revenues, net earning, number of employee and company's units. The firm has some sound strategies including the ability to create better customer service, continued effort for greater market share, and aggressive concentration on expansion. These are some of the features that give this company a first mover advantage and allow it to create greater competitive gap. This is an interesting characteristic because it helps in setting the firm apart from its rivals.

Acquisitions have been the cornerstone of Dover's success and in the year 2005, the corporation took over two stand-alone and eight add-on businesses. Such acquisitions, as Dover claims, have been the strength of the corporation and last year, the firm spent $1.1 billion on such additional businesses. The firm acquired Knowles Electronics and Colder Products as stand-alone companies. Dover believes in acquiring only those businesses that have a strong management system and sound growth potential so they can be welcomed to Dover family without much hassle. The firm claims that it expects all its new businesses to grow significantly in the next few years. The eight new businesses including Avborne, C-Tech, APG and Harbor Electronics are all believed to make significant contribution to Dover's rising revenues. The firm acquired these businesses believing that since they had potential, they could do better under the patronage of Dover than as stand-alone corporation. This claim has a grain of truth in it since Dover has half a century's experience behind it and it has consistently been a leader in its field. The revenues for the last year show that there has been a good increase in its revenues and net earnings, which indicates that its decision to acquire additional businesses has paid off.

While the firm makes certain claims, which are also backed by its annual reports, we need to see how other objective sources discuss the situation at Dover. Do they really believe that Dover has more to gain than lose from its acquisitions? Are their assessments consistent with the thinking and beliefs of top-level managers at Dover? It appears that the news is good for Dover Corporation. The independent sources indicate that the firm has been able to generate considerable cash flow from its various operations and is in a strong position as market leader. It has also been found that cash flow situation improved tremendously between Dec 2005 and June 2006. The table below shows that increase and it has been derived from the following source:

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2006

Cash Flows from Continuing Operations (in thousands) 2006

Cash Flows Provided by (Used in):

Operating activities

Investing activities

Financing activities