Analysis on the Shift of Business Strategy for Ge Into the 21st Century
Question 1: In what ways has Jeff Immelt redirected the strategy of GE?
In 2001, shortly after Jeff Immelt became the CEO of GE, a series of events changed and impacted the corporate landscape. The immediate challenges that he faced included 9/11, and a subsequent series of high profile corporate scandals (Enron, WorldCom). In 2008, the financial crisis hit and had a severe impact on GE’s primary growth source, GE Capital causing it to accumulate bad debts and asset write-downs. These events caused slow domestic economic growth, crisis of confidence among investors and more global competitors.
Due to the change in environment and the need to adapt Immelt shifted the focus of GE from cost cutting and deal making to new products, services and markets. He particularly focused on redirecting the strategy of GE through: organic growth, customer focus, and innovation.
In 2002, Immelt committed GE to an organic growth rate of 8% per year. He identified a number of emerging global trends - the ageing population, the demand for sustainable energy, the necessity of improved infrastructure, and opportunities in the emerging markets. He aimed to create value for customers by leveraging GE’s core competencies particularly in advanced technology and related service by delivering superior, customized products and services to high-growth markets.
A core component of his growth strategy was to create new ‘Growth platforms’ which could be either extensions of the existing businesses or entire new commercial areas. Through identifying a new growth platform, it would then be executed through a series of divestments and strategic acquisitions in sectors with high growth potential.
Technology was seen to be a key driver of GE’s future growth which led to the launch of Imagination breakthrough. New technologies were seen as an essential ingredient to successful product innovation and quality improvement. GE expanded its research and development capabilities and supported them
In 2001, shortly after Jeff Immelt became the CEO of GE, a series of events changed and impacted the corporate landscape. The immediate challenges that he faced included 9/11, and a subsequent series of high profile corporate scandals (Enron, WorldCom). In 2008, the financial crisis hit and had a severe impact on GE’s primary growth source, GE Capital causing it to accumulate bad debts and asset write-downs. These events caused slow domestic economic growth, crisis of confidence among investors and more global competitors.
Due to the change in environment and the need to adapt Immelt shifted the focus of GE from cost cutting and deal making to new products, services and markets. He particularly focused on redirecting the strategy of GE through: organic growth, customer focus, and innovation.
In 2002, Immelt committed GE to an organic growth rate of 8% per year. He identified a number of emerging global trends - the ageing population, the demand for sustainable energy, the necessity of improved infrastructure, and opportunities in the emerging markets. He aimed to create value for customers by leveraging GE’s core competencies particularly in advanced technology and related service by delivering superior, customized products and services to high-growth markets.
A core component of his growth strategy was to create new ‘Growth platforms’ which could be either extensions of the existing businesses or entire new commercial areas. Through identifying a new growth platform, it would then be executed through a series of divestments and strategic acquisitions in sectors with high growth potential.
Technology was seen to be a key driver of GE’s future growth which led to the launch of Imagination breakthrough. New technologies were seen as an essential ingredient to successful product innovation and quality improvement. GE expanded its research and development capabilities and supported them