Corporate & Business Strategy: GE


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Corporate & Business Strategy: GE

  1. 1. Raghav Agarwal<br /> Akash Jauhari <br /> Alok Mishra<br /> Karan Verma<br /> Lokesh Chaudhary<br /> Varun Sehgal<br />Akash Jauhari IMT Ghaziabad<br />Corporate & Business Strategy For GE<br />
  2. 2. Key Findings<br />Major Spinoff of business portfolio required.<br /> Geographic redistribution of focus and resources required.<br />It will be more viable to introduce with current business in emerging markets than getting into a break through industry altogether.<br /> Internal Strategies should not conflict with – shareholder wealth maximization principle in long run.<br />Akash Jauhari IMT Ghaziabad<br />
  3. 3. Recommendations<br />Divest from Insurance Business <br />Divest from Consumer & Industrial Business<br />Key focus areas – Energy, Healthcare and Consumer Finance Geographic Redistribution : China, India, Brazil, South Africa<br />Invest in Alternative Energy Sector (Solar & Wind) in India<br />Invest in Healthcare Sector (Medical Equipment) in China<br />M&A opportunities with financial verticals of crisis hit companies in United States like Merrill Lynch.<br />Akash Jauhari IMT Ghaziabad<br />
  4. 4. Classification of Businesses - BCG Matrix<br />Energy Financial Services,<br />Aviation Financial Services,<br />IT Solution, Real Estate,<br />Enterprise Solution<br />Energy<br />Oil & Gas<br />Healthcare<br />Market<br />Growth<br />Aviation, <br />Transportation,<br />Finance, <br />GE Money, <br />NBC<br />Insurance<br />Consumer & Industrial<br />Plastics<br />Relative Market Share<br />Akash Jauhari IMT Ghaziabad<br />
  5. 5. Divestment<br />Divest from Insurance Business - Expected Income through the divestment to be around $10 billion<br />Divest from Consumer & Industrial Business - Expected Income through the divestment to be around $2 billion<br /> (The above businesses are a drag for GE, affecting its cash flows and profits. GE stock is under valued and among poor performers in-spite of solid foundations.)<br />Akash Jauhari IMT Ghaziabad<br />
  6. 6. Enter Alternative Energy Sector in India: Porter’s 5 Forces<br />Threat of New Entrants<br /><ul><li>Sector untouched in India
  7. 7. Gaining first mover advantage
  8. 8. Huge potential with supply less than demand</li></ul>Competitive Rivalry<br /><ul><li>Immense Opportunities
  9. 9. Few Indian Players – Titan, Mosarbaer, HVV
  10. 10. Huge Investment & Tie-up with Global players required</li></ul>Bargaining Power of Suppliers<br /><ul><li>Low due to supply-demand Mismatch
  11. 11. Low prices of Polysilicon in Global Mkt.
  12. 12. Scope in Backward Integration</li></ul>Bargaining Power of Customers<br /><ul><li>Limited Variation in Prices
  13. 13. PPA by Govt. of India
  14. 14. No role of competition on price mechanism</li></ul>Threat of substitute products<br /><ul><li>No real substitute
  15. 15. Govt. protected sector
  16. 16. Continuous Innovation & breakthrough Technology required</li></ul>Akash Jauhari IMT Ghaziabad<br />
  17. 17. Alternative Energy Sector in India: Porter’s 5 Forces<br />Forecast:<br />Thin film to be $ 1380 million industry by 2020.<br />Total industry size to exceed $ 11300 million by 2022 (Garter Sector Research).<br />Conclusion:<br />Competition Intensity: Low<br />Profitability: High<br />Core Competency: Need to develop<br />Strategy: M&A, Collaborations and Tie-Ups<br />Akash Jauhari IMT Ghaziabad<br />
  18. 18. Enter Medical Equipment Industry in China<br />GE Strength:<br />GE Healthcare is the market leader with $17 billion revenue and more than 46,000 employees in over 100 countries .<br />Market Size:<br />China is World’s 4th largest & fastest growing healthcare market <br />Healthcare expenditure to be $ 220 billion for 2007 (only 6.5% vs. 15.6% for US) <br />Annual Revenues around $20billion in 2009 for medical equipment <br />Strong growth in tier II cities - increasing purchasing power <br />Large (1.2 billion) and ageing population <br />People moving from conventional to advanced medical sciences <br />Akash Jauhari IMT Ghaziabad<br />
  19. 19. Medical Equipment Industry in China<br />Government Policies:<br />NRCMCS started in 2005 <br />Govt Spending on healthcare to be $ 47 billion annually after 2005 <br />Focus on advanced technology medical equipments<br />Key Success Factors:<br />85-90% of advanced equipments are imported in china (as of 2004-05) <br />Company, if, sets up a manufacturing plant in China, will get major market share & high margins <br />Competitors:<br />Abott Labs, Backman Coulter, Philips<br />Product Range:<br />Diagnostic, Hematology Analyser, Biochemistry Analyser, Ultrasonic Imaging<br />Akash Jauhari IMT Ghaziabad<br />
  20. 20. Strategic Initiatives within Business <br />Technology<br /><ul><li> Quality (Six-Sigma)
  21. 21. Green Technology</li></ul>Core Competency<br />Commercial<br /><ul><li> Customer Centric
  22. 22. Leadership</li></ul>Business Process<br /><ul><li>Innovation
  23. 23. Performance Recognition</li></ul>Akash Jauhari IMT Ghaziabad<br />
  24. 24. Quality: Six Sigma<br />Six Sigma<br />Delighting Customer<br /><ul><li> Performance, Reliability</li></ul>Process<br /><ul><li> Adding Value to Business wrt Customer</li></ul>Employee<br /><ul><li> Training in DFSS, Green Belt, Black Belt</li></ul>Akash Jauhari IMT Ghaziabad<br />
  25. 25. Ecomagination<br />Investment<br />GE plans to invest $1.5 billion by 2009 in Ecomagination R&D<br />Revenues<br />By 2009, expected revenues from Ecomagination projects to increase by more than 5% to $18 billion<br />Greenhouse Gas Emission (GGE)<br />Between 2002-07, GE cut GGE by over 20% and increased energy efficiency by over 30%<br />Water Consumption<br />It reduced by 30% between 2003-07<br />Eg: Flexefficiency 50 - A 510 MW power plant based on Natural gas with a efficiency of 61% in France <br />Akash Jauhari IMT Ghaziabad<br />
  26. 26. Corporate Structure in 2002<br />Akash Jauhari IMT Ghaziabad<br />
  27. 27. Corporate Structure in 2007<br />Akash Jauhari IMT Ghaziabad<br />
  28. 28. Legacy of GE<br />Akash Jauhari IMT Ghaziabad<br />