Although it looks as though Thermo Electron is doing well with this strategy there are some draw backs to this strategy. There is the thinning of the talent and the management throughout the spinout companies. The cost of putting together many different annual reports and quarterly earning statements. It is not only a costly event for them to do but it is almost silly.
Also the bad publicity and performance that one of the spinouts could produce for the whole company.
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Thermo Electron- Question #1 Karli-Mae Ferris
Thermo Electron's diversification strategy created value for the company by increasing its sales, diversifing into a wide range of businesses, and the successful ventures created a positive reputation for the Thermo Electron's name.
Thermo Electron's diversification strategy created value for the shareholders by increasing the compound return to shareholders averaging 28 percent a year and they offered a lot of shock options for their shareholders.
Thermo Electron - Question #3 Lindsy Girard
Yes the problems that Thermo Electron experienced invalidated the strategy. There was a lack of performance and the financial results weren't great. Also other companies have ruchsed to market products that weren't tested correctly
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