Professional Documents
Culture Documents
Submitted by:
Group 1
MP12007
MP12039
MP12050
MP12057
Q1. What are the possible causes of poor performance of Thompson in the mid 1990s?
1. Lower cost of Asian Competitors.
2. Split of profitable defense business.
3. Poor performance of TV business resulting in overall dip in Profitability. Profit from
manufacturing Tubes and Set Top boxes kept the overall business Going. The
operating Income in 1997 from consumer Products was -72% whereas for Displays
and Components it was +132%.
4. Increase in Debt in order to main market position in TV Set even though the TV
Business was not profitable. Net Finance Costs in 1997 was 203 million $.Even the
Asset to Equity Ratio of 6.4 in 1997 was high as compared to the industry average.
5. Organization organized as Functional structure resulting in hiding of inefficiencies of
some segment such as TV Sets and VCR.
6. Though it is not evident from case facts, the company may not have made significant
improvements in Consumer Electronics business especially TV Set segment after
swapping the medical electronic business for GEs Consumer Electronics Business.
Q2. Identify the key events, their causes and their effects during the transformation of
Thompson from 1997 to 2007.