Analysis of GE In Hungary Tungsram

1. General Electric in Hungary Group 9 Atul Anand Avinash Besima Ganesh Bhat Srivathsan

3. Traditional strength of Tungsram in science and Technology

4. Low operational cost and cheap labour

7. Poor internal communication and information system

8. Low Operating Efficiency :

9. Losses due to wastage and breakage was high

10. Product Development Life cycle was large :3 years

11. Huge Unutilized Inventories.

14. Cost Cut Leadership: (Strategy to increase the Market share)Economies of scale. Huge investment in Manufacturing and Infrastructure to generate the ability to produce large volumes. Cutting down the employees. Leading Change ..

16. Challenge them to develop creative solutions

17. Brain storming

18. Make yes or no decisions on the solutions at the instant.

20. Includes self assessment.

21. The results are used for appraisal , training and development of employees. Leading Change ..

23. Quality assurance and hence customer satisfaction

24. Reduced wasteLeading Change ..

27. GEL Market share increased from 5-6% to 16-17%

29. GE Hungary generated HUF 667 billion revenues in 2008, with 98% exports.

30. GE Hungary and its affiliates employ 11,000 people.

31. Two core GE businesses –Technology Infrastructure and Energy – operate four factories in three cities, and also a regional headquarters and two technology centres in Hungary

33. Energy - "For Veresegyhaz" Award

34. Energy - Healthy Workplace Award, Corporate category

35. Consumer & Industrial – Generosity Award 2009

36. Business Superbrands Award

37. Energy, Veresegyház – Best Workplace for Women, 3rd place among companies employing more than 250 associates

39. PESTLE ANALYSIS Political: Hungary's Communist government, which was facing an election it ultimately lost to a coalition, offered concessions to GE -- including freedom to choose investments, repatriate profits, and lay off workers. The opening of the Berlin wall in November, 1989 spurred GE to clinch the deal Environment: Given Hungary's Communist background, GE's David Gadra, 42, lectured his staff on ''What means profit?''. No sooner had Gadra explained than he found himself back at the blackboard scribbling out graphs and flow charts to answer the next question: ''Why profit?''

40. Socio-Economic: To cushion the culture shock for the Hungarians, the company chose as chief executive Hungarian-born George Varga, 54. A college student at the time of the 1956 uprising, he fled to the U.S. Varga has spent 28 years with GE VARGA surrounded himself with seasoned executives. His managers average 18 years' service. Says Varga: ''We didn't want the young tigers. We need people with the sensitivity to perform a cultural marriage. We have the ideal team to sell our ideas to the Hungarians.‘’ To help lower costs without cutting people, more than 30 GE manufacturing experts were called from the U.S. Each spent about two months at one or more of Tungsram's seven plants working on one of 82 cost-paring projects.

41. Economic: Before: Tungsram was in desperate need of investment capital, new technology, and management expertise. Tungsram got 70% of its $300 million in revenues from the West, chiefly Europe. Thus it offered a tempting mix of Western European market share and Eastern European wages. After At Tungsram, labour accounted for one-quarter of the cost of making a light bulb, compared with one-half in the U.S. GE was booking profits every time it transferred goods abroad, it kept sending out large quantities of products that the sales companies didn't need right away -- or couldn't sell at all. GE got a rude shock when it checked warehouses in France and Germany and discovered $3 million of six-watt car headlights, which haven't been used since the 1970s.

42. Technical: Bulbs produced were the slow-growth, low-margin end of the lighting business. They were rapidly losing ground to a whole family of costlier, high-tech, energy-efficient products. One production line, for example, turns out three million outdoor spotlights a year for yards and driveways. But the line also manages to break another half a million or so, causing a large loss in glass, tungsten wire, and other raw materials. The floor is covered with glass shards, and tall trash cans overflow with discarded bulbs. Legal: No legal issues as the Democratic coalition government agreed to GE's terms

43. Alternate Strategy GREENFIELD VENTURE IN EUROPE