Tyco International- Corporate Malfeasance

2489 WordsApr 16, 201110 Pages
Tyco International- Corporate Malfeasance Case Summary Tyco began in 1960 when it was founded by Arthur Rosenberg and started as an investment holding firm. In 1973 Joseph Gaziano took over for Rosenberg as CEO and pursued many hostile acquisitions. He was successful and was able to grow the company to a net worth of $140 million before he passed away in 1982. The CEO who took his place was John Fort who came in with the basic strategy of maximizing shareholder wealth through dramatically cutting costs. When John Fort left his position in 1992, Tyco was comprised of Fire Protection, Electronics, and Packaging departments. Dennis Kowalski was able to work his way to the top of Tyco and take the CEO position in 1992. Kowalski began as…show more content…
The bargaining power of buyers in this industry is very low because companies are constantly producing highly innovative and unique products. The threat of substitute products in the electronics industry is high because there are always at least three competitors that produce the same types of products (televisions, video games). So, if a customer wanted to purchase another video game for his x-box he could very easily buy one without thinking about who made the game. Tyco should stay in this industry since they already have their foot in the door and are doing well. External Environment Analysis It is also essential to understand the trends of the external environment and how they might affect Tyco. These trends have different implications for the fire protection and electronic industries Tyco competes in. First off, demographically the people in our world are getting older due to the aging of the baby boomers. This is a negative signal for the electronics industry because the majority of buyers of electronics are relatively young. The fire protection industry is not affected so much because fire protection is a necessity now. When looking at the economic segment, we are climbing out of a recession and interest rates are low. Therefore Tyco is able to borrow capital at lower rates than before. Also, the political/legal segment may affect the electronic and fire protection industries in a number of different ways. Some laws may affect changes in interest
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