Follows the actions of GE CEO, Jeff Immelt, as he implements a growth strategy for the $150 billion company in a tough business environment. In four years, he reinvigorates GE's technology, expands its services, develops a commercial focus, pushes developing countries, and backs "unstoppable trends" to realign GE's business portfolio around growth platforms. At the same time, he reorganizes the company, promotes "growth leaders" into top roles, and reorients the culture around innovation and risk taking. Finally, in 2006, he sees signs of growth, but wonders whether it is sustainable. General electric:
Headquarters Fairfield, Connecticut, U.S.
Revenue: US$ 182.515 billion (2008)
Net income: US$ 17.410 billion (2008)
Total assets: US$ 797.769 billion (2008)
Employees: 323,000 (2008)
CEO & Chairman – Jeffrey R. Immelt
Lines of business: Aviation, Jet engines, Electricity, Entertainment, Finance, Gas turbines, Generation, Industrial Automation, Lighting, Medical imaging equipment, Medical technology, Health informatics, Electric motors, Locomotives, Wind turbines, TV motion pictures
Jack Welch Jeffrey Immelt
Jeff Immelt took over from Welch on September 7, 2001, four days before 9/11. The resulting uncertainty coupled with the dotcom bubble burst led to GE losing $80 billion in market cap just within a week of Immelt taking charge. He further stood in the shadow of Welch who in two decades had built GE into one of the biggest companies of the world. Immelt decided that GE had to look to innovation if it was to continue on the same growth of the last two decades. Immelt was focused on building up the core elements of GE’s success: a portfolio of strong businesses, bound by companywide strategic initiatives and managed by people in a performance driven and adaptive culture. He articulated his vision of a global, technology based, service intensive company by defining a growth strategy based on five main factors: 1. Technical Leadership – Continuing to focus on technology as the key growth driver. 2. Services Acceleration – Generate high margins and raise entry barriers by building up a service business around GE’s base of jet engines, turbines, locomotives etc. 3. Commercial Excellence – Create a world class commercial culture to match the engineering and financial oriented approach under Welch. 4. Globalization – Expand sourcing and market access across the world, and give special attention to developing countries like India and China. 5. Growth Platforms – Allocate resources to build new business platforms that would provide growth in future. Immelt considered the size and diversity of GE to be its strengths rather than weakness. He planned to rebalance and renew the business portfolio to drive growth. They Acquired:
Telemundo and Bravo networks to target the fast growing Hispanic market. Enrons Wind energy business.
Interlogix, in the security systems space
He Committed $100 million to upgrade GE’s major R&D facility in New York, in keeping with his focus on innovation. He Emphasis on long term research even though they might not give results for a decade or more. Dispose off underperforming business like the insurance business of GE. Cut costs, Increase efficiency and effectively manage resources. Six sigma used to manage inventory and receivables.
Digitization targeted at infrastructure efficiency.
To counter the post-Enron criticism, took steps to make GE more transparent and open. Higher weightage given to corporate responsibility
Acquired Universal entertainment from Vivendi to supplement NBC and to add strength to GE’s core business. Acquired Amersham, a life sciences and medical diagnostic company. Difficult to dispose of unprofitable assets – insurance, motors, super adhesives. Immelt demarcated GE portfolio into two parts
Growth Engines: Businesses expected to grow at 15% through business cycles Cash Generators: mature businesses cyclical in nature...
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