Tuesday, November 20, 2007
Thermo Electron- Question #2 - Sandra Adams
The strategy used be Thermo Electron holds some major drawbacks. As the company expanded into various fields, the parent company was losing track of all the subsidiaries because there were too many too quickly. Rather than building a reputation for any of the subsidiaries almost all of them went public in the beginning, creating more work for the parent company to keep track of. Overall, Thermo Electron could have used this stragety more efficiently if they would have invested more time and thought into each of their companies rather than throwing them into the market to see how far it could be pushed.
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Question #3- Kyle Toelken
The problems that Thermo Electron faced in the long run defiantly invalidated their strategy from the beginning. The main strategy was to really work with R&D and come up with new ideas that have never been thought of before. These products are then spun into stand-alone companies where Thermo holds a majority equity stake. They got up to about 23 different spin-out organizations.
There main strategy worked for a good portion of time, it's just that Thermo pushed them too far, because they became too greedy. The set strategy had many flaws, which were due to the massive amounts of related companies. If one company went wrong, it reflected back to all of the other connected companies. Now that the CEO has stepped down, the company will be looking into newer ideas that can bring them back to where they were.
Question # 1 - Ronnie Vajdak
Historically - Thermo Electron's strategy created value by combining the best elements of big and small business. By using the capital raising ability of a big business and the development advantages of smaller companies, Thermo Electron used its unique advantage to become profitable in many areas. Also, by tying subsidiary stock into the parent company stock, Thermo Electron assured that both the big and small partners would be profitable.
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