Harvard Case Study Analysis

Topics: General Electric, GE Capital, Jeffrey R. Immelt Pages: 4 (1581 words) Published: April 19, 2013
Harvard Case Review and Analysis

1. Jeff Immelt’s strategies for GE were solid in a theoretical sense. The company should have been delivering above-average returns and seen all the positives that he preached about it. The reason this did not happen and they faced some humiliation in 2008 until 2010 were due to GE Capital. Immelt thought that they were diversified enough to survive the economic downturn. However this proved to be wrong. In an interview for BusinessWeek magazine David Magee, author of Jeff Immelt and the New GE Way, spoke on what was going wrong for GE. He believes that Immelt and GE did not correctly predict how bad the financial downturn was going to be. By missing that their beliefs that they were diversified enough to survive were no longer correct and they saw their plans for the future going away quickly. Even with that in mind, Magee does not believe that GE is as bad off as everyone thinks and says they are. He goes on to say that a lot of the problem with their stock price is due to the fact that Immelt was not coming through with his promises and having to turn face on a lot of key items he said he wouldn’t do. He sees them being able to survive and restructure, but it will not be as quick due to their errors. When the restructure is completed Magee foresees their stock prices rising again and GE to be “fixed.” The BusinessWeek article also mirrors the ideas of Magee. The article highlights GE’s key issue as GE Capital. It goes on to state that with the economy how it is and so much of their funds tied up in real estate investors have become very nervous when dealing with GE. They have a lot to loss and people are not willing to sit around and wait and see what happens. This nervousness is the main reason GE stocks have been falling and are no longer trading at the price they once were. The article also brings up another issue for GE Capital. It is almost impossible for Immelt to do anything with it. One possible solution would...
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