General Electric Case Study

Published: 2019-09-03 00:00:00
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The case study that will be discussed in this paper is that of General Electric company one of the most successful organizations in the world. This study will first evaluate Jeff Immelts strategic undertaking until 2012. The second part will provide GE with another strategic plan which is meant to help the companys profits go to another level. The last part will compare both Immelts and Welchs leadership styles and evaluation on whose method is more appropriate in todays VUCA businesses.

Part 1

Jeffery Immelt headed the General Electric Company often referred to as GE is one of the most valuable and successful companies in the world and until 2012 it. In his entire leadership time, Immelt led GE along an organic growth pattern. Therefore, during the financial crisis when both revenue and profits declined Immelt resolved to reshape GEs business portfolio. On reshaping its portfolio, he drove the company towards new growth platforms. By new growth Immelt established that the resources available at GE would be maximized for the stronger businesses and build new areas of business in the promising niches. Thus, the management sought to improve healthcare, energy, broadcasting, entertainment, and technology infrastructure (Grant 2012, 340). With the innovations acquitted to existing businesses regarding acquisitions, GE recorded high growth segments, with extensively attractive returns. Further, the company ensured to prune all the small nonperforming businesses to shrink its capital assets. Some of the major companies it departed were the Universal NBC, its insurance businesses, and the plastic firms. By so doing GE evaded the repercussions of loan exposures and high-risk profiles. Therefore, it increased the companys liquidity and ensured to redefine the capital assets role within GE. Immelts successful management was based on his ability to define the companys competitive advantages.

From his analysis, Immelt outlined that GEs competitive advantages are sourced from innovative technology, global presence, and customer focus which should be integrated with proper solutions (Hinterhuber & Liozu 2014, 415). Establishing new and innovative technology was determined as the key driver that would ensure the companys future growth. Speedily Immelt concluded that technology infrastructure should be integrated into the companys functionality. Therefore, to attain a fully digitalized empire, the management expanded its Research and Development (R&D) budgets. He upgraded GEs major corporate R&D center at Niskayuna with a budget of 100 million US dollars. Other places that were improved were the R&D centers in New York and construction of new ones at Shangai, Rio de Janeiro, and Munich. These research centers were further endorsed with technologist evaluated the company in whole. His emphasis on good technology was because he wanted GE target consumers to be presented with innovated quality products. Immelt realized that technology innovates a products quality which is the prime determiner of its target client responsiveness. As a result, he reshaped the business portfolio (Mukerjee 2013, 52). By so doing GE reduced some of the nonperforming projects while improving the already existing ones to become long-term potential profit deliverers for the organization.

From his portfolio, Immelt formulated and approved some creative projects that proved to have a potential breakthrough for GE. Some of the successful projects were based in the revolutionized hybrid locomotive market and the smart grid that provided the new generation electrical infrastructure needs. Also, he came up with the sodium batteries which had a bigger capacity to store electricity in large scale. By emphasizing on technology, GE managed to launch products that could adequately address the consumers needs of a cleaner and more efficient energy source, reduced emissions, and water services providing lots of clean water. Therefore, across all its diverse businesses GE provided the customers with environmentally friendly products which provided all the solutions for its evolved clients (Kotler 2011, 133). From this approach in 2012, GE was awarded for efficiently generating revenue from clean energy sources.

The second competitive advantage was inclined on focusing on their customer needs and providing integrated solutions. With an increased customer focus GE embarked on developing its marketing function. Therefore, they hired talented marketing professionals who could identify the unmet needs of their target consumers and also develop processes through which their products and services could be delivered. To demonstrate that they had improved on their customer focus GE formulated a way of enhancing their customer value through producing products endorsed with customized support services where consumers were guaranteed practical solutions. The staff dealing with customer support issues were trained to offer technical and financial solutions services. Due to the many revenue-generating platforms, GE ensured to coordinate all customer solutions in all these departments (Abetti, P.A., 2011 347). Moreover, they came up with nearby business highly visible marketing campaigns. This new approach acted as a way through which GEs divisional structures were reorganized.

Lastly, From Immelts evaluation, GE would extensively pay off if its business would succeed in the global market. Therefore, he strategically positioned the company to compete with other emerging markets on the international market (Whittington & YakisDouglas 2011, 535). A vice chairperson was appointed to lead GE into achieving its international growth efforts particularly in the China, Middle East, Brazil, and Indian markets. For, this company to realize its goals it established a coordinated way through which all its businesses could be operated. With this approach it achieved significant successes from the 2008 Beijing Olympics, building a financial joint venture at Abu Dhabi, and Nigerian company to country infrastructure challenge. The government business oriented approach was also used to address the needs of the local people and by directly working with GE intensive success in the China, Brazil and Indian countries was realized. By going global, and ensuring that all their consumers needs are being focused upon drove GE toward a customer-optimized business. Moreover, with every company being given the freedom to innovate preferred products for their markets resulted in the emergence of reverse innovation. Therefore, the products that had been developed to serve in the emerging markets could be equally applied to the industrialized nations. Besides, globalization provided an opportunity for GE to reorganize constantly and restructure the organization and its talent base.

Part 2

While General Electric has grown to become an empire with its organic growth strategic pattern, the body should deliberate on adopting a new business strategy. Although it has become a significant industry giant, only some parts of the world are experiencing the impacts it has had on other economies. Therefore, it is recommendable that they adopt the market development business strategy into their already existing ones. The market growth strategy is a deliberate development plan considering that Immelt had it in his initiatives but due to the economic crisis experienced GE, and its management decided to forego it (Johnson et al., 2013). With GE being recognized globally it is clear that their new markets will become successful despite their geographical or environmental conditions. Moreover, the market development strategy will increase the number of sales because new markets and customers have been introduced to the business (Trivellas 2012, 307). From 2001 to 2012, GE used the market penetration strategy to grow their business and up to date, this line of development is still being used and applied in all its marketing procedures. From current studies this company still puts a lot of emphasis on their existing markets ensuring to grow and invest more in power provision, technology, and infrastructure. Researchers provide that GEs operating focus as the PIT strategy (Teubal, 2013 50). Nonetheless, although GE has managed to conquer its global market for their profits to shoot to a new level, they will need to acquire new markets and ensure to build them to become profitable ventures in all the promising geographical niches identified. Developing a new market is often hard to establish, but GE already has the finances and proper management that can assist in the success of the whole process. The company can develop new markets and introduce new products or grow these new niches with the existing ones. What GE should understand is that new markets are helpful to any business considering that they can survive during tough times and give it a considerable edge.

By adopting the new development plan, General Electric will need to evaluate and measure its performance against Kaplans Balanced Scorecard. Its financial measures will determine its importance to the shareholders. Also, its capital returns will be measured to determine the strategies short term results. From this results GE can then reduce the consistent reminders of the historical uncertainties related to this strategy and its various performances. Therefore, GE can consider adding other financial measures (Kaplan 2012, 542). They include focusing on the new strategys profitability thus using it to plan and control the whole process. Also, a sales backlog can be provided to help reduce the uncertainties resulting from performance.

On customer satisfaction, GE can recognize the distinctions between all its customers. There are usually two categories those who are there because of the products value and those who are there because of the price index. Therefore, to measure the customer satisfaction the value wanting clients can be presented with questionnaires where they can tell on the performance of the products being offered (Kaplan & Norton 2014, 138). On the other hand, those who are there due to price index will be intelligently coaxed to keep purchasing the product due to its competitive position. However, with GE being a value based organization, independent surveys will be carried out annually to determine customer perceptions in the new markets development strategy in comparison to those of their competitors. With the objective evidence that will be provided the company can then identify the tangible benefits related to the new policy.

Internal processes accrued to market development strategy will be measured by the corporations safety index to its human capital. This security measurement will identify if the geographical environments of the new markets pose any potential harm to its property, process, its workers, and the society around (Duarte et al. 2011, 522). Also, the companys metric measure will be used to identify whether the marketing departments in the new market are continually building on its core values of maintaining satisfied customer.

To measure on innovation and to learn from the adopted strategy the company will solely evaluate whether this approach has improved the financial, internal process performance, and customer satisfaction. They will gauge on whether its products or the innovated ones are creating any revenues for the company, expanding its market, and the internal work process improvement margins (Butler et al. 2011, 5). Innovation will be measured by revenue percentage of the new market while learning will be measured as per the growth index of the leading operational practices within the organization. Nonetheless, this new markets will be evaluated on whether they are offering a supportive clima...

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