GENERAL ELECTRICS

CORPORATE STRATEGY
Submitted By:
Angadbir
Gurpreet
Gourav
Ishan

GENERAL ELECTRIC: AMERICAS

VENERABLE CONGLOMERATE
Investors had started losing interest in conglomerates in
1980-1990 due to:
Complexity in management.
Less understanding of operations.

Combination of totally dissimilar businesses in one company.

The fall of GE: Capital.
Need of flexibility in leadership style.
wrong acquisition decisions.

LACK OF INTEREST IN CONGLOMERATES

GEs GROWTH STRATEGY

Technical leadership
Services
Customer focus
Globalization
Growth platforms
Common finance and human resource processes

DISSIMILAR AND UNRELATED

BUSINESSES
Lack of focus on the core business.
Loss in one business impacts the whole organization.
Tough competition from the core players of that market.
Example: NBC universal: A joint venture of GE and Vivendi universal entertainment
Consisted of universal studios and theme parks
Even though the business was growing and contributed 10% of
the GEs revenue, it was sold to Comcast who bought 51% stake
in one deal and bought the rest 49% in another.
The revenue from the NBC universal deal was used to stabilize
their financial service arm and payback shareholders.

THE FALL OF GE: CAPITAL

The seventh largest bank and an important financial
institution of the USA
Tougher regulatory standards for GE: capital
Failed to meet the wall street expectations in 2008 by 700
million after facing a $ 1bn loss in WMC mortgage business
and $1.2 billion loss in Japanese company called Lake
Failure of Bear Stearns exposed GEs trick of using GE: capital
as a cookie jar to achieve its targets and further dropped the
share price of GE
Investors started losing trust in GE and started considering
GE: Capital as a risk to their money as well as to General
electric.

NEED OF FLEXIBILITY IN LEADERSHIP

STYLE
GE faced a hard time during
Jeff Immelt period.
He was also associated with
volatile employment
practices.
He was also accused of tax
evasion.
Analysts felt the need of a
leader who could motivate
employees rather than
manage them.

59.88, 2000

23.59, 2015

7.06, 2009

GEs LEADERSHIP STRATEGY

Passion for excellence and hate bureaucracy.
Open to ideas and committed to work.
Self confidence and unbiased.
See change as opportunity, not threat.
Stretch, set aggressive goals and reward progress.
Organizing Corporate Executive Council Meeting

WRONG ACQUISITION DECISIONS.

Acquisition of Kidder,
Peabody failed due
to difference in the
culture and values of
two firms.
GE sold WMC
mortgage business
at a loss of $ 1
billion.
GE also sold their
consumer-lending,
Japanese company
called lake at a loss
of $1.2 billion.

SUGGESTIONS
To recreate the interest of the investors, GE should focus
more on streamlining their business.
GE should try to cut loose their businesses which are not
related to their core business like they are doing with GE:
capital, by finally deciding to come out of finance business
They should have dedicated managers and executives that
boost the morale of the employees.
They should avoid taking swift decisions related to mergers
and acquisitions and focus on merging or acquiring
companies that yield better returns and which would help
capitalize their already existing core businesses.

CONCLUSION
Despite of being the worlds largest company in the past and
worlds sixth largest company at present GE has faced a lot of
problems in the past and most of their problems point out to
only one solution i.e. streamlining their business and focus
more on their core business. On GEs decision of selling their
finance business in April 2015 analysts commented The
worlds biggest diversified conglomerates are finally realizing
that combining entirely dissimilar businesses in one company
almost never works. Considering the GEs recent decisions it
seems that GE is back on the right track.