Wednesday, November 21, 2007
Giardina #1
The Thermo Electron's unusual disversification strategy created value for the company and it's shareholders very quickly. Because they were so diverse into many different things, their sales were the first thing to grow and they did to 3.6 billion. If the company is making money then the stock is going to go up, making money for the shareholders.
Subscribe to:
Post Comments (Atom)
1 comment:
Mike Dombrowski- Thermo Electron Question #2:
There are a couple of significant drawbacks to the strategy that was put into effect. The first drawback deals with the number of quarterly earnings statements that need to be put out. with 23 subsidiaries, that would mean 92 of these statements would need to be put out which would entail a costly endeavor. Secondly, by having so many spin offs from the original parent company, talented management and engineers could begin to be spread too thin over too many different businesses. Lastly, if one of the many spin offs is doing poorly, it can effect the business as a whole and have adverse effect on the companies revenues as well as their stock price.
Post a Comment