Case Study: Growth of GE General Electric

Pages: 10 (2714 words)  ·  Bibliography Sources: 1+  ·  Level: College Junior  ·  Topic: Business  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] GE does not have much control over the current global economic crisis and must have patience at is pertains to waiting for the economy to recover.

Corporate Level Strategy

The company's corporate level strategy is known as the multi-factoral model or the GE matrix. The picture below is a depiction of the matrix used by GE. This particular model or matrix is unique because it "cross-references market attractiveness and business position using three criteria for each -- high, medium and low. The market attractiveness considers variables relating to the market itself, including the rate of market growth, market size, potential barriers to entering the market, the number and size of competitors, the actual profit margins currently enjoyed, and the technological implications of involvement in the market ("General Electric screen matrix")." Additionally the business position criteria examine the strengths and weaknesses of the business in a many different fields. These include the position of the business in correlation to competitors, combined with the capacity of the business to conduct product research, development and production. The matrix also takes into consideration how prepared the management is to distribute resources ("General Electric screen matrix").

This matrix used for GE's corporate strategy is actually a variation of the Boston Growth Matrix. This matrix is important to the company's business strategy because it assist managers in determining the strategy that the company needs to take as it pertains to investment. Through the utilization of this matrix, the CEO and top managers can determine when to invest as well as when to divest.

Business Level Strategy

GE's businesses are divided into five segments. These segments include Energy Infrastructure, Technology Infrastructure, NBC Universal, Capital Finance and Consumer & Industrial. GE has a well established business level strategy in which the businesses are closely integrated and also share leading edge business initiatives, financial disciplines, the sharing of talent and best practices ("GE's Growth Strategy: The Immet Initiative"). The businesses are also built upon a culture of integrity. The current CEO Jeff Immelt explains that

"without these powerful ties, we would actually merit the label "conglomerate" that people inaccurately apply to us. That word just does not apply to GE...What we have is a company of diverse benefits whose sum is truly greater than the parts; a company executing with excellence despite a brutal global economy...We beleive GE is different, and one of the things that makes us different is that -- in good times and in bad -- we deliver ("GE's Growth Strategy: The Immet Initiative")."

GE's structure and control systems and how they match its strategy

GE does not have a clearly defined mission. However the company does assert that "GE people worldwide are dedicated to turning imaginative ideas into leading products, and services that help solve some of the world's toughest problems." The structure at GE involves the CEO and the Board of directors. Each of this leaders plays a role in guaranteeing that the overall strategy of the company is carried out. The CEO carries a great deal of weight at the company. The control systems guarantee that the board of directors also plays a significant role in ensuring that the voices of the investors are heard. At the current time GE is having some difficulty in bridging the gap between the companies overall strategy and that structure and control systems. More specifically many believe that the current CEO is not doing enough to ensure that the company makes a return to profitability. If the company desires to remain as the leading company in this particular industry the CEO must begin to get back to the strategies and principles employed by Welch and concentrate on communication and developing competency in employees.

Recommendations

Overall it seems that GE and its CEO need to take a more practical approach in remedying the problems that the company is currently facing. For the most part, the CEO is attempting to remain optimistic even though the company has experienced significant losses in recent quarters. The current approach seems to be problematic, particularly as it pertains to investors. It is obvious that investors want an honest repose concerning the condition of the company and when these conditions will improve.

The company must make a concerted effort to fully exploit all of the opportunities that are available. This included expansion into emerging markets and the acquisition of existing businesses. As it relates to emerging markets, GE has that knowledge and the ability to assist in the building of infrastructure in many emerging markets. There must be a concerted effort to gain access to these markets if GE wants to maintain a competitive advantage. Such expansion is not only important as it pertains to increasing profitability but also because the tools that GE can offer these emerging markets will increase the quality of life for citizens in those markets.

As it pertains to acquisitions, GE must continue to look for opportunities associated with acquiring existing businesses. Acquisitions are important to guaranteeing that GE will be in a strategic position to be profitable well into the future. The company must also take full advantage of the resources that they have acquired form the acquisitions that have been made recently.

Future of GE

In the future GE will likely remain an industry leader. This ability to maintain the competitive advantage will also be dependent upon the willingness of the company to fully exploit the opportunities that it has for expansion and innovation. The company has been able to overcome problems in the past and will likely continue to overcome issues that it faces. Although the current economic crisis has affected GE's profitability over the last few quarters, the company has taken steps to recover from what it is currently experiencing.

It is likely that GE will continue to be an innovative company in the years to come. The company has the opportunity to be at the forefront of inventions that will change the relationship between consumers and the environment. Clean technology is desperately needed and GE has the resources and the know-how to create products and services that are environmentally friendly.

Overall, f the company employs the Recommendations that have been made it will continue to be successful. This is particular true once the economy begins to recover in ways that are more substantial than what is already occurring. The entrepreneurial spirit of GE which was spawned by Thomas Edison and continued with Jack Welch will continue to be the foundation upon which GE continues to grow into the future.

Works Cited

"GE CEO keen on oil, gas deals." 12 Oct. 2010. 16 Oct. 2010

"GE's Growth Strategy: The Immet Initiative"

"GE's Immelt gets no respect" 15 Oct. 2010. 16 Oct. 2010

"General Electric screen matrix." n.d. 16 Oct. 2010 http://www.palgrave.com/keyconcepts/pdfs/Strategic%20Management%2014039_21350_10_G.pdf

Healthymagination. nd.16 Oct. 2010

Malone, S.2010 GE sees more opportunities for acquisitions: exec. 6 Oct. 2010. 16 Oct. 2010

"Thomas Edison & GE." n.d. 16 Oct. 2010

Waters, Robert C. 2009. Evolution of Leadership Development at General Electric. Engineering Management Journal, 21 (1), p42-46

Welch, J. Jack Welch: Straight From the Gut. Business Plus: New York. 2001 [END OF PREVIEW]

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