Thermo Electron Question #1- Michael Garland

Thermo Electron used an unusual diversification method that increased the companies sales rapidly to $3.6 million. The company sold many different diverse products to obtain this rapid increase in the value of the company and its shareholders. This created a huge compound return average for the shareholders. This company obviously benifited from a strategy that can create much more work and unequal performances of the different subsidiaries

Thermo Electron Question # 2- Joe Boulanger

The complexity of the subsidaries can have a dampening effect on the share price. Some investors have complained that the corporate structure is too complicated. Having 23 public subsidaries means producing 23 annual reports and filing 92 quarterly earnings statement a year which is not inexpensive.
The ongoing process of spinning out companies can spread scarce mangement and engineering talent too thin over too many disparate businesses. Bad performance by one subsidary can cast a shadow over the whole company and adversely affect both revenues and share prices.

Thermo Electron- Kathryn Prentiss Question #2

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.

Thermo Electron Question #1-Anne Acerra

Thermo Electron's diversification strategy created value for the company and shareholders because it provided services in areas of the market that no one else was addressing. This gave them the advantage of no competition, and the fact that people could only go to them to get certain things they needed.

Thermo Electron- Question #1 Jason Shaker

Thermo Electron's unusual diversification strategy has created value for the company and its shareholders by drawing on its R & D know-how to develop radically new products that address discrete market niches not alrady addressed by the company or its subsidaries. These products are then spun out as the core of stand-alone companies in which Thermo holds a major equity stake. Between 1983-198, Thermo Electron produced twenty three such spinouts, all but three of which were publicily traded. In the process, Thermo diversified into a wide range of businesses (including power plants, artificial hears, and laser hair removers) and grew its sales over 3.6 billion.

Thermo Electron- Question #1- Beth Ellis

Historically speaking, Thermo Electron used their unusual diversification strategy very well to create value for the company and its shareholders. The approach used from 1983-1997 was to create products to be spun out by subsidiary companies in which Thermo holds a majority of equity stake in. Thermo produced 23 of these spinouts between these years, and grew its sales to over $6.3 billion a year. Thermo’s diversification strategy was different in that it gave the subsidiaries a huge amount of freedom as day-to-day operations and stock contract options were generally handled by the subsidiary (Hill, 2008). This created value for the company during the time as they didn’t have to do as much work with each of the subsidiary companies, allowing the companies to take care of a majority of things for themselves. This created value for the shareholders as during this time period the compound return to shareholders averaged 28% a year (Hill, 2008). Historically, this approach worked well for Thermo Electron.