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The 3 pillars of Thermo Fisher (NYSE:TMO)

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Marc Casper, the CEO of the renown bio-tech product development company Thermo Fisher Scientific (NYSE:TMO), wrote a letter to his shareholders in which he outlined the three most important pillars of being a customer-centric firm. These three pillars are as follows:

Technology
Thermo Fisher (NYSE:TMO) is the biggest life-sciences supplier in America, it spends nearly $400 million each year in its R&D department in order to produce better products with thorough innovations. Even though the costs of R&D have gone way ahead the company’s revenue; it has still maintained margins as it injected capital for future growth. The company has to make most of its investments by reaping as much as it can out of them as it can.

Thermo Fisher (NYSE:TMO) is investing in the right places by trying to treat cancer through clinical genomics. The company made an agreement with Pfizer (NYSE:PFE) and GlaxoSmithKline (LON:GSK) that stated they were to enter the industry to gain platforms regarding oncology diagnostics. It is estimated that the genomics market is going to grow making way for Thermo Fisher (NYSE:TMO). Since the company not only works on academic research but also clinical tools, the revenue stream is uneven. The clinical as well as academic market makes only 25% and 27% in revenue.

Emerging markets

The emerging markets play a huge part in economic growth for such companies. It is said that their demand is bound to increase in Thermo Fisher (NYSE:TMO)’s tools. Due to the increase in the living standards of people, awareness of health has become clearer. Hence, the devices that Thermo Fisher (NYSE:TMO) offers for food safety and air quality are being used heavily in countries like China. The sales the company had in 2010 for the Asian region were 12% of Thermo Fisher (NYSE:TMO) total revenue. As 2013 came to a close, this value soared to 18% which included a 20% growth in China.

Customer value proposition

Thermo Fisher (NYSE:TMO) reported its $13.6 billion acquisition of the company Life Technologies in February. This deal will help both companies excel at what they are best at doing. Life’s work will help Thermo’s genomics as well as its applied science tools by providing the market with bigger and better technology then before.

Thermo Fisher (NYSE:TMO) can now enter diverse fields of science through an integrating value for its customers with its distribution network and scale. This means that customers now get to have consistency, competitive pricing and ease, whereas for the company this means it can exploit the market.

Conclusion
The company made a wise decision to acquire Life Technologies as it will help Thermo Fisher (NYSE:TMO)expand and manage a bigger segment of the market now with its diverse fields. The company can work on building shareholder value however some risks may arise for the newly acquired company which should be worked on through mutual agreement and understanding.

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