Strategic management is crucial in steering a company direction. A company’s strategy is the game plan management use to stake out a market position, conduct its operations, attract customers, compete successfully and achieve organization organisational objective. (Thompson, A.A. and Strickland, A.J. 2003). Components of strategic management of Tyco International Inc (Tyco) are reviewed and presented in this report. The Company Overview In corporate in Bermuda, Tyco has its headquarter in Princeton, US. Tyco is a diversified manufacturing company that provides more than 200,000 products and services to governments, medical institutions and commercial industries ranging from food to automobiles. Tyco earned US$ 2.9 billion at the back of US$40 billion revenue in 2004.
Location and Size Tyco operates in all 50 states in US and over 100 countries worldwide. Tyco hire 260,000 employees globally. A select list of countries where Tyco has presence is presented in Appendix 1. Business Structure The diverse businesses of Tyco is logically grouped into five segments, namely Tyco Fire ; Security (TFS), Tyco Electronics (TE), Tyco Healthcare (THC), Tyco Engineered Products ; Services (TEPS), and Tyco Plastics ; Adhesive (TPA). Each segment is lead by a segment president, who reports to the CEO. Tyco Corporate office overseeing the operation of these segments and also provides supports function like legal, treasury, corporate governance and etc. Below is a simplified business structure of Tyco:
Source: Modified from Tyco 2004 annual report Product and Services Through over 800 brands, Tyco sell more than 200,000 products and services. Some can be seen in daily life, other hidden in product of other companies. THC makes medical instrument, medical supplies, pharmaceuticals and chemicals. TFS manufactures fire detection and protection systems, breathing apparatus, access card systems, alarm system, anti-theft device and etc. TFS also provide installation, maintenance and monitoring services. TE is the world largest supplier of electronic components. Its products are used in computers, telecommunications equipment, automobile, aerospace applications, household appliance and others. TEPS sell full spectrum of industrial valves and flow control devices use to transport and control water, oil and gas, waste, chemical and other liquid. TPA products include packaging material, garment hangers, adhesive tapes, disposable dinnerware and etc. Refer Appendix 2 for list of Tyco brands.
History and Crisis Tyco was founded in 1960 as a research laboratory and has grown tremendously since then. Prior to 2002, Tyco growth is achieved through aggressive mergers and acquisitions. In total Tyco has acquired more than 2000 companies. In 2002, Tyco faced a serious liquidity crisis and a scandal involving misappropriation of US$600 million fund by former CEO, Mr Dennis Kozlowski. The former CEO and CFO both are facing criminal charges for misappropriation of fund. This created a confidence crisis and nearly brought down the entire conglomerate. Tyco share which were traded in the US$50s in early 2002, dropped to US$8.25 by July 2002. The same month, Mr. Ed Breen was appointed as new CEO to steer Tyco out from crisis and into a new arena through a new strategic management.
Mission, Goals and Value
Mission Mission statement defines the reason for existence of a company and essence of the business – “who we are and what we do” (Thompson, A.A. and Strickland, A.J. 2003). Tyco mission statement is as below: “We will increase the value of our company and our global portfolio of diversified brands by exceeding customers’ expectations and achieving market leadership and operating excellence in every segment of our company.”
Goals Goals Tyco seeks to achieve are categorized under the heading of Governance, Customers, People, Operating Excellence and Financial Results. In governance Tyco refers to adherence to the highest standards of corporate governance by establishing processes and practices that promote and ens re int rity, compliance, and accountability. Tyco also strives to understand and exceed its customers’ needs and preferences so as to provide value. Attract and retain employee with excellence and integrity is the people goal Tyco try to achieve. Tyco seeks achieve efficiency through excellence practices leverage on company-wide resources and lean measurements.
Finally, Tyco also aims to consistently achieve outstanding financial performance in revenues, earnings, cash flow and all other key financial metrics. Value Tyco has four core values forming the foundation of Tyco employees conduct. The four values are Integrity, Excellence, Teamwork and Accountability. The integrity value demands the highest standards of individual and corporate integrity in Tyco. It requires Tyco and its employee to comply with all company policies and laws. In the value of excellence, Tyco employees continually challenge each other to improve products, processes, and themselves.