GE Casestudy


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GE Casestudy

  1. 1. Business Strategy NMIMS, Bangalore - Ashish Chinthal
  2. 2. About GE ? • GE is a diversified technology, media and financial services company. It has products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and advanced materials. • GE employs more than 300,000 people worldwide. GE people world wide are dedicated to turning imaginative ideas to leading products and services that help solving some of worlds toughest problems. • The company's origins go back to 1890 and the Edison General Electric Company, founded by Thomas Alva Edison, inventor of the incandescent electric lamp. • The General Electric Company, or GE (NYSE:GE) , is a multinational American technology and services conglomerate incorporated in the State of New York. • As per fortune 500 companies list, GE is the world's fifth largest company by revenues. • In the 1960s, aspects of U.S. tax laws and accounting practices led to a rise in the assembly of conglomerate. GE is arguably the most successful organization of this type.
  3. 3. Business Units GE is made up of six business units: • GE Commercial Finance: This unit provides loans, operating leases, financing programs, commercial insurance, and an array of other products and services aimed at enabling businesses to grow. • GE Consumer Finance: A leading provider, under the GE Money brand, of credit services to consumers, retailers and automotive dealers around the world. • GE Healthcare: GE Healthcare is a leader in the development of a new paradigm of patient care dedicated to detecting disease earlier and helping physicians tailor treatment for individual patients. • GE Industrial: The division provides a broad range of products and services, including appliances and lighting; plastics and silicones products; and equipment services. • GE Infrastructure: One of the world's leading providers of fundamental technologies to developing countries, including aviation, energy, oil and gas, rail and water process technologies. GE - Aviation is the world's leading producer of large and small jet engines for commercial and military aircraft. It also supplies aircraft-derived engines for marine applications and provides aviation services. • NBC Universal: A leading media and entertainment company in the development, production and marketing of entertainment, news and information to a global audience.
  4. 4. History of GE • By 1890, Thomas Edison had formed Edison General Electric which brought together several of his business interests together under one corporation. At about the same time, Thomson-Houston Company under the leadership of Charles A. Coffin gain access to a number of key patents through the acquisition of a number of competitors. Subsequently, General Electric was formed by the merger in 1892 of Edison General Electric and Thomson-Houston Company. • In 1896, General Electric was one of the original 12 companies listed on the newly-formed Dow Jones Industrial Average and still remains after 112 years. • In 1911 the National Electric Lamp Association(NELA) was absorbed into General Electric's existing lighting business. GE then established its lighting division headquarters at Nela Park in East Cleveland, Ohio. Nela Park was the world's first industrial park, and is still the headquarters for GE's lighting business. • The Radio Corporation of America (RCA) was founded by GE in 1919 to further international radio. • General Electric was one of the eight major computer companies through most of the 1960s. It has been said that GE got into computer manufacturing because in the 1950s they were the largest user of computers outside of the United States federal government. In 1970 GE sold its computer division to Honeywell.
  5. 5. • In 1986 GE reacquired RCA, primarily for the NBC television network. The remainder was sold to various companies, including Bertelsmann and Thomson SA. • In 2002 Francisco Partners and Norwest Venture Partners acquired a division of GE called GE Information Systems (GEIS). GXS is a leading provider of B2B e-Commerce solutions. GE maintains a minority ownership position in GXS. • In 2004 GE bought Vivendi’s television and movie assets, becoming the third largest media conglomerate in the world. The new company was named NBC Universal . Also in 2004 GE completed the spin-off of most of its mortgage and life insurance assets into an independent company, Genworth Financial, based in Richmond, Virginia. • Genpact formerly known as GE Capital International Services (GECIS) was established by GE in late 1997 as its captive India based BPO. GE sold 60% stake in Genpact to General Atlantic and Oak Hill Capital Partners in 2005 and hived off Genpact into an independent business. GE is still a major client to Genpact getting its services in customer service, finance, information technology and analytics. • In May 2008, GE announced it was exploring options for divesting the bulk of its Consumer and Industrial business. • As disclosed in the 2009 Proxy Statement, GE shareowners are being asked to vote on a shareowner proposal requesting the Board of Directors to commission an independent, comprehensive study to evaluate the potential of breaking up GE in order to enhance ownership value through liberation of the holding company/diversification discount suffered by the conglomerate.
  6. 6. Purpose & Mission of GE • To deliver customer oriented services by solving world’s biggest problems by putting collective imagination to work for a better future. • Identifying & investing in the emerging domains & markets. • To maximize the economic profit of the organization and there by deliver maximum value to share holders & employees.
  7. 7. Facts & figures • Rank: 5 (Fortune 500) • CEO: Jeffrey R. Immelt • Website : • Industry: Aircraft Jet Engines, Electricity, Entertainment, Finance, Gas Turbine Generation, Industrial Automation, Lighting, Medical Imaging equipment, Medical Software, Motors, Railway Locomotives etc. May-09 $ m illions % change from 2007 Revenues 1,83,207.00 3.7 Prof its 17,410.00 -21.6 As s ets 7,97,769.00 — Stockholders ' equity 1,04,665.00 — Market value (3/27/2009) 1,13,841.40 — Profits as % of Revenues 9.5 As s ets 2.2 Stockholders ' equity 16.6
  8. 8. Social Impact & responsibility • Aviation- GE developed America's first turbojet engines and continues to advance the industry with innovative GE90® and GEnx™ engines. Today GE supplies the world with engines for the commercial, corporate, military and marine industries. GE also provides technology upgrades, engine exchange services, and more. • Appliances- GE is one of the largest manufacturers of major appliances in the world. Since 1907, GE has been introducing advanced appliances to improve peoples' lives. GE continues the legacy today with energy conserving innovations like the Advantium® oven, the Harmony™ clothes care system, and more. The GE ecomagination Homebuilder Program is a groundbreaking effort to provide comfortable, efficient homes that save homeowners' energy costs while easing the impact on the environment. • Energy- How we manage energy today will determine the kind of world we live in tomorrow. Whether it is solar power in rural India, wind power in Europe, or cleaner coal in the U.S., GE’s diverse portfolio of power generation products and services is changing the way we think about power. • Finance- As the world economy grows, more and more businesses worldwide look to GE to fuel their growth. GE provides loans, operating leases, financing programs, commercial insurance, equipment leasing of every kind, and other services in over 35 countries around the world. • Health care- GE is changing healthcare delivery in more than 100 countries with its vision for an “early health” model, focusing on early diagnosis, intervention, and prevention. And, as the world moves toward the “digital hospital,” GE is leading the way with technology for patient monitoring, imaging, information delivery, and more.
  9. 9. • Lighting- Our company began with the invention of the world's first affordable incandescent lamp. A century later, GE is still bringing light to your world. Development is in progress for new lighting technologies such as fluorescents and light-emitting diodes that operate with more efficiency, less cost and less environmental impact than ever before. • Media & Entertainment - NBC Universal is harnessing the power of digitization, enabling the distribution of news, information and entertainment across multiple media to capture new users and revenue streams. GE’s diverse portfolio includes network television broadcast and production, film, cable networks, sports (including the Olympic Games), international television channels, theme parks and more. • Oil & Gas- GE is helping to meet the world's increasing demand for oil and gas while also developing the technologies that will be needed to address tomorrow's energy challenges. GE’s innovations includes from extracting oil from tar sands to deep-sea exploration and production. Such technologies are ensuring responsible energy access for generations to come. • Security - GE is continually advancing new technologies that help homeowners monitor their properties, make schools safer, improve airline security, and more. • Water - The U.N. estimates that 1.2 billion people lack access to safe drinking water. GE is committed to developing new products and processes to conserve this vitally important resource, such as breakthrough purification technologies that reclaim up to 90% of wastewater for recycling at industrial and manufacturing facilities.
  10. 10. Productive work & worker Why GE? Achievements at GE • GE is renowned for hiring exceptional people and giving them unparalleled opportunities to build their careers and capabilities. There is simply no other company in the world with such a diverse set of businesses in which to work, and such a development-focused culture in which to grow. • At GE, It goes beyond businesses, brands and infrastructure. With four businesses and operations in over 160 countries, GE employees have an unparalleled foundation on which to build their careers, their abilities and their dreams. GE offers its employees challenging, rewarding careers in dynamic businesses. • From the outset, innovation has been part of GE’s DNA. That means being surrounded by bright, interesting people working together on new and exciting projects. It means trying to find new and better ways of doing things. And it means enjoying a career with extraordinary opportunities and enormous potential. • GE hires exceptional people and invests in their growth. GE has a culture of continuous learning, thoughtfully designed to enable employees to grow their personal capabilities and reach their full potential. They invest in education, provide access to experienced colleagues and give opportunities to work with intelligent, dedicated people. • GE does business in over 160 countries, giving employees a literal world of experience. Opportunities at GE are defined, in part, by the emerging needs of businesses, customers and clients all around the world,. A career at GE offers access to some of the most exciting and dynamic challenges of lifetime. • Integrity is an essential component of life at GE.
  11. 11. Life @ GE? • GE’s culture is all about providing everyone who works there with the opportunities to exercise their responsibility, integrity, creativity, and accountability while growing themselves, their careers, and the business. • GE wants you to stay healthy, to be able to manage illness, and to get better faster. They offer comprehensive medical and dental coverage. GE offers valuable tax benefits and a company match that works with employee contributions to help employees save for the future. They also provide employees with hundreds of everyday discounts, savings at local shops, seasonal shopping guides, and promotions. • At GE, learning is part of way of life. Employees can take advantage of tuition reimbursement benefits to help improve their skills, grow their career, or get a loan to help pay for their family’s higher education. • GE strives to be a great company, with the capability, reach, and resources to make a lasting difference. Being a good company means GE pushes itself to do the best, for its customers, for its shareholders, for the company, for ourselves, for those around us, and for the world that we all share.
  12. 12. Administration & Entrepreneurship • Scaling up investment in Health care domain as it has potential to grow at a very rapid rate. • Outsourcing work to locations which offer leverage of Cost and domain expertise. • Heavy investments in R & D. • Reshuffling of finances from GE capital to other business domains. • Scaling up businesses in promising markets like India, China, Brazil & Vietnam
  13. 13. GE in India • General Electric Co. sees annual revenue from India rising to more than $5-billion (U.S.) by 2010 as its operations on the subcontinent play an increasingly important role in the conglomerate's growth. • Mr. Immelt gave India's economic prospects a vote of confidence and said GE wants to invest in high-growth areas like consumer finance and aviation. • "All the conditions are right to invest in India," Mr. Immelt said. "Over the next five years India will be one of the fastest-growing, if not the fastest-growing region in the world." • Mr. Immelt said India's infrastructure needs and the rising spending power of its citizens make the subcontinent a core part of that strategy. He said opportunities existed for GE in newly deregulated areas such as aviation, where airports and aircraft engines are required to meet booming demand. • Mr. Immelt said the Indian market has advantages for GE businesses, like strong consumer and commercial-finance sectors, that were largely absent in China. But the gap between the two economies remains stark. China attracted more than $60-billion in foreign direct investment last fiscal year, more than 10 times the amount received by India.
  14. 14. Future Focus 5-10 yrs down the line GE would like to: • Expand its presence out of US & Europe i.e. Asia. • Expand drastically in Health care business. • Be more customer oriented by innovatively solving the most difficult problems. • Be actively involved in solving all the important issues of the world. • Groom the next generation employees of GE & equip them with the skillset to face the future problems of the world.