1. Aaron Trigg, Lindsey Mauro, Michelle Milkovich, Sean Smith

2.  In 1890, Thomas Alva Edison established the Edison General Electric
Company in Menlo Park, New Jersey
 At the same time Charles A. Coffin was growing his business, The
Thompson Company
 It was increasingly difficult for Edison and Coffin to remain
competitive based their own technologies
The two companies united in 1892
and formed The General Electric Company
 Headquartered in Fairfield, CT
 300,000 employees
 In over 160 Countries
 CEO - Jeffrey Immelt

3.  Although GE does not have an exact mission statement it
operates under the following four main values:
Values - Imagine, solve, build and lead - four bold verbs that
express what it is to be part of GE. Their action-oriented nature
says something about who we are - and should serve to
energize ourselves and our teams around leading change and
driving performance.
Vision – “ We Bring Good Things to life”

4.  1879 – Thomas Edison Invents light bulb
 1890 – Edison General Electric Created
 1892 – Edison merges with Thomas-Houston Electric (owned by Charles Coffin)
 1896 – One of first 12 companies listed on Dow Jones Industrial Index
 1919 – Founded Radio Corporation of America (RCA) to further international radio
(later sold)
 WWI – Developed Aircraft turbosuperchargers
 1941 – Whittle w.1 jet engine – GE Aviation
 1950s – GE began Computing branch (Sold to Honeywell in 1970)
 1968 – American Airlines and United Airlines chose to purchase new GE jet engines
 1981 – Jack Welch named CEO (GE worth $13B)
 1986 – Purchased RCA & NBC
 1992 – Purchased Britain’s General Electric Corp (Overseas growth)
 1995 – GE Adopts Six Sigma management approach
 1998 – Revenues over $100B for first time
 2001 – Jack Welch Retires (GE worth $410B)/Jeffery Immelt named CEO
 2001 – Honeywell Merger Blocked
 2002 – Acquired wind turbine assets from Enron
 2004 – Reorganized GE’s 13 businesses into 11 focused on customers
 2007 – Acquired Smith Aerospace/Sold GE Plastics
 2010 – Acquired gas engine manufacturer Dresser Inc.

5.  World’s Largest Producer of Solar Panels

6.  NBC is an American commercial broadcasting
television network

7.  UK pharmaceutical company, specializing in
medical diagnostics and life science products

8.  Conglomerate Company based out of Gotham City

9.  Energy
Energy Services Oil & Gas Power & Water
 Technology Infrastructure
Aviation
Healthcare
Transportation
 GE Capital
Americas
Asia Pacific
Aviation Financial Services
Consumer Finance
Europe, Middle East & Africa
Energy Financial Services
Real Estate
 Home & Business Solutions
Appliances & Lighting
Intelligent Platforms

11. GENERAL ELECTRIC SIEMENS
Ratio 2010-2011 2011-2012 Ratio 2010-2011 2011-2012
Total Asset T.O. .2 .2 Total Asset T.O. .77 .71
ROA 1.48 1.79 ROA 3.94 5.94
ROE 9.6 11.15 ROE 14.18 20.53
EPS 1.24 (ttm) EPS 8.72 (ttm)
FCF/NI 2.26 1.46 FCF/NI 1.8 .91
Current 3.01 2.73 Current 1.22 1.21
EBT Margin 9.46 13.64 EBT Margin 7.65 12.57
Debt/Equity 2.72 2.34 Debt/Equity .62 .45
Receivables T.O. 12.99 10.34 Receivables T.O. 5.17 5.24
Inventory T.O. 6.1 5.39 Inventory T.O. 3.74 3.42

12.  Six Sigma
 Business Management Strategy
▪ Originally created by Motorola Inc.
 John Francis "Jack" Welch, Jr.– GE CEO (1981-2001)
▪ Early adopter (1995)
▪ In 1980, the year before Welch became CEO, GE recorded
revenues of roughly $26.8 billion. In 2000, the year before he
left, the revenues increased to nearly $130 billion.
▪ The company had gone from a market value of $14 billion to
more than $410 billion, making it the most valuable and
largest company in the world.
 Interview with Jack Welch about Six Sigma

13.  Strengths
 Global strength and recognition
▪ 6th in Fortune 500 list, operating in more than 160 countries
▪ 5th Best Global Brand
▪ 19th Most Innovative
 Excellent management
▪ 7th Best Company for Leaders
▪ Proven leadership and business model
▪ Confident investors – raising capital
 Diverse product range
▪ Long Term (GE Aircraft engines)
▪ Short Term (GE Lighting, Plastics, NBC)
▪ Financial Services (contributes to 40% of GE’s revenue)
▪ Spreading the risk of failure in every market and not just one

14.  Weaknesses
 Conglomerate
▪ Complexity in management and difficult for analysts and investors to
understand operations
 No Mission Statement
▪ Without a clear mission, it can be difficult to make decisions and set the
direction of the company
 Company size/ acquisition restriction
▪ Eg. GE’s planned acquisition of Honeywell International, a diversified
technology and manufacturing company, specializing in aerospace
products, was rejected by the EU
 Energy Segment
▪ Underperforming, no signs of near future recovery
 Pollution
▪ History of being a heavy polluter
▪ 4th Largest Corporate Producer of Air Pollution in the United States
 Flexibility
▪ Large and diverse businesses might overstretch the company and
reduce reaction times to shifts in targeted markets

15.  Opportunities
 Green Technology
▪ Had a history of being polluters, so finding environmentally friendly
alternatives
▪ $850 Million investment into Renewable Energy
▪ Investment into Solar Technology for use in Plants
 Divesting Consumer and Industrial Businesses
 Research and Development
▪ Immense capital allows GE to contribute a lot to R&D for product
development and improvement
 Increased geographic growth
▪ Global expansion = more opportunities (Eg. China)
 Merger between NBC and Vivendi
▪ Further opportunities in the media business
 Improved customer services
▪ Adopted a new customer focus initiative

16.  Threats
 Technology Disaster
▪ Produced nuclear reactors that contributed to Fukushima disaster
 Exposure to global economy
▪ Economy slowdown would affect GE, since 40% of the revenue is
generated overseas
▪ Exposed to currency fluctuations
 Publix Relations Problems
▪ $84 Million used for political lobbying
▪ Pay no taxes and $4.7 billion in tax rebates
▪ Laid off over 4,000 workers while increasing executive pay by 27%
 Intense scrutiny after Enron
▪ More transparency and disclosure; skeptical investors
▪ Public image of all large companies suffered
 Competition
▪ Constant change in technology heats up competition
▪ Very diverse:- tough to be the best in all industry

17. Threat of New Entrants
 Tough for new entrants to pinch a sizable chunk of
market share from GE or its competitors
 All of GE's companies are in very large-scale
economies, which are difficult to break into. It
would require a great deal of capital in advertising
to get a new companies brand name out to the
public

18. Threat of Substitutes
 The financial segment of GE is not as susceptible to
a threat of substitutes as other units of GE.
i.e.: it is much easier for a customer to switch their brand of appliances than
its financial institution
 GE NBC is highly prone to substitutes as viewers can
easily change the channel to another network
 Just about every technological product GE creates has
the threat of substitutes, technology is constantly
evolving and becoming more efficient.

19. Bargaining Power of Buyers
 Due to the size of General electric, they have
considerable bargaining power for most of their
products.
 For companies such as GE Healthcare the volume per
buyer is very high in quantity of goods and cost of
goods, making the switching cost high for buyers, giving
GE the advantage
 For other companies such as GE financial, it is easier and
not as costly for buyers to switch, making it essential
that GE stays competitive in price wars with the
competition.

20. Bargaining Power of Suppliers
 The bargaining power of suppliers is relatively low
for GE’s many industries
 Because of the shear volume of goods that GE buys
for their suppliers, suppliers have very little ability to
bargain with GE
 Most of GE’s suppliers could not survive if they lost
GE’s business
 GE has to be aware of suppliers that might integrate
forward

21. Competitive Rivalry Within Industry
 Rivalry with Siemens – biggest competitor
 Creating competitive advantages to create bigger market share
 Acquisitions, mergers and joint-ventures
 Battle for innovation and technological
improvements
 GE has high brand recognition, market
share, access to assets and competencies and
customer loyalty making it highly competitive
within the industry

22.  Do not become complacent
 Understanding Growth Potential of each division
and how to be #1
▪ “Expect to be industry leaders in market share, value
and profitability, if a business cannot meet our financial
goals, or could be better run outside GE, we will exit that
business rather than erode shareowner value”
 Divesting
▪ Are all of the divisions necessary?
 How competitors are performing, to stay ahead

23.  Making sure they make smart decisions
 Know the company culture, values and
performance before acquiring in order to make
sure they align with GE’s
▪ Ex. Kidder, Peabody (Brokerage Firm)
 Investment into Environmentally Efficiency