General Electric Company
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Part of Our Final Requirement in Business Policy. International Case of a Manufacturing Activity.
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General Electric Company
- 1. (INTERNATIONAL CASE STUDY) SUBMITTED BY: ZARA, LINDSAY BANCE, JUNAMAE ASUNCION, AGATHA ABETO, RICA ROWENA CONCHA, CHRISTINE JOY (GROUP-V B1E) SUBMITTED TO: PROF. CARMEN PICHAY GENERAL ELECTRIC CO.
- 2. COMPANY PROFILE General Electric Company, or GE is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States. The company operates through four segments: Energy, Technology Infrastructure, Capital Finance and Consumer & Industrial. In 2011, GE ranked among the Fortune 500 as the 6th largest firm in the U.S. by gross revenue, as well as the 14th most profitable. However, the company is currently listed the 3rd largest in the world among the Forbes Global 2000, further metrics being taken into account. Other rankings for 2011/2012 include No. 7 company for leaders (Fortune), No. 5 best global brand (Interbrand), No. 63 green company (Newsweek), No. 15 most admired company (Fortune), and No. 19 most innovative company (Fast Company).
- 3. BOARD OF DIRECTORS: Rochelle B. Lazarus Chairman of the Board and former Chief Executive Officer, Ogilvy & Mather Worldwide, global marketing communications company, New York, New York. Director since 2000. Robert W. Lane Former Chairman of the Board and Chief Executive Officer, Deere & Company, agricultural, construction and forestry equipment, Moline, Illinois. Director since 2005. Alan G. (A.G.) Lafley Former Chairman of the Board and Chief Executive Officer, Procter & Gamble Company, personal and household products, Cincinnati, Ohio. Director since 2002. Roger S. Penske Chairman of the Board, Penske Corporation, diversified transportation company, and Penske Truck Leasing Corporation, Chairman of the Board and Chief Executive Officer, Penske Automotive Group, Inc., automotive retailer, Detroit, Michigan. Director since 1994.
- 4. Sam Nunn Co-Chairman and Chief Executive Officer, Nuclear Threat Initiative, Washington, D.C. Director since 1997. Andrea Jung Chairman of the Board and Chief Executive Officer, Avon Products, Inc., beauty products, New York, New York. Director since 1998. Ann M. Fudge Former Chairman of the Board and Chief Executive Officer, Young & Rubicam Brands, global marketing communications network, New York, New York. Director since 1999. Ralph S. Larsen Former Chairman of the Board and Chief Executive Officer, Johnson & Johnson, pharmaceutical, medical and consumer products, New Brunswick, New Jersey. Director since 2002.
- 5. W. Geoffrey Beattie President, The Woodbridge Company Limited, Toronto, Canada. Director since 2009. James S. Tisch President and Chief Executive Officer, Loews Corporation, diversified holding company, New York, New York. Director since 2010. Susan Hockfield President, Massachusetts Institute of Technology, Cambridge, Massachusetts. Director since 2006. James J. Mulva Chairman of the Board and Chief Executive Officer, ConocoPhillips, international, integrated energy company, Houston, Texas. Director since 2008. Douglas A. Warner III Former Chairman of the Board, J.P. Morgan Chase & Co., The Chase Manhattan Bank, and Morgan Guaranty Trust Company, investment banking, New York, New York. Director since 1992.
- 6. Robert J. Swieringa Professor of Accounting and former Anne and Elmer Lindseth Dean, Johnson Graduate School of Management, Cornell University, Ithaca, New York. Director since 2002. James I. Cash, Jr. Emeritus James E. Robison Professor of Business Administration, Harvard Graduate School of Business, Boston, Massachusetts. Director since 1997. Jeffrey R. Immelt Chairman of the Board and Chief Executive Officer, General Electric Company, Fairfield, Connecticut. Director since 2000. (pictured on Letter to Shareholders)
- 7. COMPANY MISSION AND VISION MISSION STATEMENT "GE does not have a mission statement, per se, but its operating philosophy and business objectives are clearly articulated each year in the Letter to Shareowners, Employees and Customers in the Annual Report.“ VISION STATEMENT ”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.”
- 8. MAIN COMPETITORS ALSTOM specialize in energy, ship buildings and marine systems and transport and marine systems and transport infrastructure. Paris, France SIEMENS electronics and electrical engineering company. Very similar to GE; strong brand name equity, has business operations in over 190 countries Munich, Germany
- 9. STATEMENT OF THE PROBLEM Main Problem A tendency to micromanage at the expense of stifling innovation and creativity—and a danger of focusing less on longer-term strategic goals. Secondary Problem Business activity monitoring can reap more information than managers know how to manage or harness into meaningful responses.
- 10. STRATEGIC AND OPERATIONAL GOAL Sustain operating excellence and financial discipline Achieve record revenues and largest earnings total in GE’s history Manage the Company through the current economic turmoil in a safe and responsible way Significantly strengthened the Company’s liquidity position Reduced GE Capital’s leverage and its reliance on commercial paper debt and diversified its funding resources Create a more valuable portfolio of businesses Reorganized GE capital intending to maintain its competitive as a smaller, more focused finance company
- 11. Drive organic revenue growth at 2 to 3 times gross domestic product Generated 8% industrial organic revenues growth Retain an excellent team with a strong culture Managed key leadership transitions at Healthcare, Aviation, and GE Money Manage the Company’s risk and reputation Led successful sponsorship and broadcast Build an excellent investor base Attracted key value investors in equity offering Lead the Board Activities Continued to strengthen Board membership
- 12. FACTS OF THE CASES By 1890, Thomas Alva Edison had brought together several of his business interests under one corporation to form Edison General Electric. At about the same time, Charles Coffin, leading Thomson-Houston Electric Company, acquired a number of competitors and gained access to their key patents. General Electric was formed by the 1892 merger of Edison General Electric of Schenectady, New York and Thomson-Houston Electric Company of Lynn, Massachusetts.
- 13. The Radio Corporation of America (RCA) was founded by GE in 1919 to further international radio. GE used RCA as its retail arm for radio sales from 1919, when GE began production, until separation in 1930. RCA would quickly grow into an industrial giant of its own. GE's long history of working with turbines in the power-generation field gave them the engineering know-how to move into the new field of aircraft turbo superchargers. GE introduced the first superchargers during World War I, and continued to develop them during the Interwar period. Superchargers became indispensable in the years immediately prior to World War II, and GE was the world leader in exhaust-driven supercharging when the war started. This experience, in turn, made GE a natural selection to develop the Whittle W.1 jet engine that was demonstrated in the United States in 1941.
- 14. In 1962, GE started developing its GECOS (later renamed GCOS) operating system, originally for batch processing, but later extended to timesharing and transaction processing. In 1964–1969, GE and Bell Laboratories joined with MIT to develop the pioneering and influential Multics operating system on the GE 645 mainframe computer. The project took longer than expected and was not a major commercial success, but it demonstrated important concepts such as single level store, dynamic linking, hierarchical file system, and ring-oriented security.
- 15. However, in 1970, GE sold its computer division to Honeywell, exiting the computer manufacturing industry, though it retained its timesharing operations for some years afterwards. In 1986 GE reacquired RCA, primarily for the NBC television network. In 2004, GE bought 80% of Universal Pictures from Vivendi. Vivendi bought 20% of NBC forming the company NBC Universal. GE then owned 80% of NBC Universal and Vivendi owned 20%. As of January 28, 2011 GE owns 49% and Comcast 51%. On December 3, 2009, it was announced that NBC Universal will become a joint venture between GE and cable television operator Comcast. The cable giant will hold a controlling interest in the company, while GE retains a 49% stake and will buy out shares currently owned by Vivendi.
- 16. In October 2010, General Electric acquired gas engines manufacture Dresser Inc. for a $3 billion deal and also bought a $1.6 billion portfolio of retail credit cards from Citigroup Inc. This is the first major deal since the start of the financial crisis. December 2010: For the second times of this year (after Dresser acquisition), General Electric Co. buy oil sector company British Wellstream Holding Plc. an oil drilling pipe maker for 800 million pounds ($1.3 billion). February 2011: The Company has agreed to buy the well-support division of John Wood Group Plc for about $2.8 billion. It is another aggressive moves recently of GE Oil & Gas made GE's acquisition was the largest of oil-service unit worldwide in 2010.
- 17. 5 FORCES MODEL Rivalry among competitors - ALSTOM and Siemens, in particular particular Potential of New Entrants -Adaptac (1981) and Adept Technology (1983) Suppliers -Vertically integrated(GE Advanced Plastics, GE Consumer and Industrial Manufacturing) Substitutes -Has many substitutes that might pose a threat Buyers -Similar to its substitutes, GE has a broad line of buyers, ranging from consumers to large corporations.
- 18. KEY COMPETENCIES Competence Great and proven leaders Expertise Core Competence Innovative Desire to serve for perfection Distinctive Competence Ability to respond to the drivers of change drivers of change by understanding the important global trends Acquisition of rivals and other companies
- 19. Recent Controversies The six reactors in the 2011 Fukushima I Nuclear Power Plant catastrophe had been designed by General Electric. Their design had been criticised as far back as 1972. In March 2011, The New York Times reported that, despite earning $14.2 billion in worldwide profits, including more than $5 billion from U.S. operations, General Electric did not owe taxes in 2010. General Electric had a tax benefit of $3.2 billion. This same article also pointed out that GE has reduced its American workforce by one fifth since 2002. In December 2011, the non-partisan organization Public Campaign criticized General Electric for spending $84.35 million on lobbying and not paying any taxes during 2008– 2010, instead getting $4.7 billion in tax rebates, despite making a profit of $10.4 billion, laying off 4,168 workers since 2008, and increasing executive pay by 27% to $75.9 million in 2010 for the top 5 executives.
- 20. CORPORATE RECOGNITION AND RANKINGS In 2011, Fortune ranked GE the 6th largest firm in the U.S., as well as the 14th most profitable. Other rankings for 2011/2012 include the following: #7 company for leaders (Fortune) #5 best global brand (Interbrand) #82 green company (Newsweek) #15 most admired company (Fortune) #19 most innovative company (Fast Company).
- 21. For 2010, GE's brand was valued at $42.8 billion. CEO Jeffrey Immelt had a set of changes in the presentation of the brand commissioned in 2004, after he took the reins as chairman, to unify the diversified businesses of GE. The changes included a new corporate color palette, small modifications to the GE logo, a new customized font (GE Inspira), and a new slogan, "imagination at work" replacing the longtime slogan "we bring good things to life", composed by David Lucas. The standard requires many headlines to be lowercased and adds visual "white space" to documents and advertising to promote an open and approachable company. The changes were designed by Wolff Olins and are used extensively on GE's marketing, literature and website.
- 22. SWOT ANALYSIS STRENGHTS Global Strength and Recognition Excellent Management Diverse product range WEAKNESSES Company size/ acquisition restriction Energy Segment Flexibility
- 23. SWOT ANALYSIS OPPURTUNITIES Research and Development Increased Geographic Growth Merger between NBC and Vivendi Improved Customer Service THREATHS Exposure to Global Economy Intense scrutiny after Enron Competition
- 24. CONCLUSION GE recognizes that part of being successful and well-respected is being socially responsible as well. Has huge potential to remain successful without any major threats from competitors. Will only continue to expand.
- 25. RECOMMENDATION For General Electric Co. to cope up with their competitors, they must introduce new products that will make their customers satisfied, and also they should know if their product is an efficient one.