Tyco international - Essay Example

Download file to see previous pages government. After its incorporation, the firm involved itself with high-tech science materials and conversion of energy products for use in the commercial sector. Over time, Tyco International was involved with various corporate strategies such as mergers and acquisition to become a leading manufacturer of industrial products. Corporate Level Strategies According to Porter (2008), corporate strategy includes all strategies that an organization employs as it diversifies. The strategy involves the combination of enterprises that a firm should compete in integration and modes through which to subsidiaries are coordinated. The four common corporate strategies applied by many firms including Tyco International include the portfolio strategy, restructuring, skills transfer and activity sharing (Tyco, 2011). The portfolio strategy as applied in the context of Tyco international is the ability of the firm to choose the best strategy exploits the strengths of the organization with the ability to exploit existing opportunities. The aim is to maximize shareholder returns. The analysis of the existing business portfolio and making decisions on suitability of the firm in receiving any further investment is a major step that should be accompanied strategy evaluation. In order to achieve the intended strategy, various methods are used, two of which is the BCG matrix and the General electric/shell strategy. Through the application of these strategies, Tyco International has been able to diversify over time (Tyco, 2011). Tyco International was established as an experimental laboratory/organization conducting experiments for the government. However, over time, the firm was able to experience both internal and external growth with diversity in its operations in different fields with the latest being a split. Internal growth was experienced through increased revenue that was used to pursue external growth through mergers and acquisitions. For instance, mergers began as early as 1966 when the firm acquired Industrionics Control Inc. the 1970s saw the firm acquire Simplex and Grinnell. The firm continued its external expansion and ended acquiring more firms in the course of its growth (Porter, 2008). However, the firm realized it potential growth prospects and exploited the corporate strategy of split in 2006 where it was split into three independent companies that were Covidien Ltd, Tyco Electronics Ltd and Tyco International Ltd. Before splitting, Tyco International utilized the BCG strategy that could be used to establish the product portfolios of the firm as explained in the next section. While diversifying in international markets, Tyco International utilized strategies such as the export strategy, franchising and joint ventures and licensing among others. BCG Matrix as Applied to Tyco International The BCG matrix categorizes products of an organization based on the market share and the market growth rate. Based on these two axes, four quadrants are drawn representing stars, cash cows, dogs and cats. The matrix postulates that Stars represent products of the firm that depict high growth rates in the market such as healthcare products and services of Tyco International. Electronic products that have a large market share although they perform moderately in the market while question marks and dogs represent products of low market share operating in high growth markets and ...Download file to see next pagesRead More