Professional Documents
Culture Documents
Agenda
GE Quick Facts SWOT Analysis Timeline Actions and financial outcomes
Growth Strategy
McKinseys 7S model Conclusion Risk Next Steps
CEO
since
Jeff Immelt
September 7th , 2001
SWOT Analysis
S
Strengths
Brand GE
Weaknesses
Large & complex operations Underperformaing businesses Lack of buyers for these underperforming resources
Six Sigma/ Cost saving Size and diversity Growth Engines and Cash generators R&D Ability to conceptualize & identify unstoppable trends
Opportunities
Organic Growth in Developing country. Inorganic growh in developed markets Green Machines Tech savy products Corporate responsibility Services sector
Threats
Low bid competitors in service sectors. Government regulations. Sceptic Financial Markets
2005
2001
Jeff Immelt becomes the CEO 9/11 Terrorist attacks Enron goes bankrupt Purchase of GE shares by Jeff Promised double digit growth Growth strategy based on: Technical / Service / Commercial / Globalization / Growth platforms
Organic Growth increase from 5% to 8% Share price dropped 20%, market cap decreased by $80 bn
2005
2002
Increased R&D budget to $ 327mn (14% increase) Long term R&D projects Focused on organic growth as key driver Operational Efficiency: 6 sigma & digitization To reduce costs, increase efficiency, effective utilization of resources Broke financial business into 4 separate businesses EDC and corporate responsibility
Digitization saved $ 2bn a year Cash flow from operations up by 10% to $ 15.2bn Revenues increase by 5% Share price dropped from 40.3 to 24.6 (39%)
2005
2003
Continued to drive his growth strategy
Freed up $ 4.5bn in cash by selling insurance entities Total revenues declined by 0.8% Profits increased by 4.22% (promised double digit)
2005
2004
Generation of growth leaders: 5 traits
Achieved $ 2.7bn in working capital Transportation & energy reduced costs by $300mn 9 out of 11 businesses had double digit earnings
2005
DREAMING Intensive conversations with key customers To identify major industry trends Likely implications
2005: Reorganization
GE
Transportation Commercial Finance
GE
Industrial Commercial Financial Services NBC Universal Health Care Consumer Finance Infrastructure
Consumer Finance
Consumer & Industrial Equipment Management NBC Universal
Healthcare
Insurance Advanced Materials Energy
Infrastructure
Revenues increased by 11.3% Major orders from Middle east ( $ 8bn ) 12% increase in share price
1)Business structure was 1)Targeted operational efficiency, transformed to meet with the lean strategic needs. GE finance six sigma, build growth business was broken down platforms, implemented new to 4 people profile, benchmarked GE Drive organization parts best 2)Portfolio transformation via practices, through drivers of 2)Operating initiative like Organic Growth and growth and cash engines formed Simplification to reduce Acquisition with the overhead. Growth Strategy 3)Building imagination breakthrough.
1)Making Growth the personal mission of the 1)New people profile initiative 1)Assignments Start training and employees. your 2)Hiring of the right set of 1)Leadership style was open and implemented for career tomorrow. If you had people for various roles development a bad year, learnof Growthcommunicative. from it and 3)Developed Growth leaders 2)EDC leaders. do better. 4)Benchmarked top organization 3)Imagination initiatives 2)Led by example by 2)Employee-centricism getting people profiles and developed 4)Town halls involved personally in a profile for growth leaders. developing growth leaders 5)Dreaming sessions
Conclusion
Set clear goals for business growth and stuck to it Strived for Organic growth as a key driver and took measures for the same Focused and strengthen on the core capabilities Immett showed motivation and involvement right from the start when the shares were brought from his personal account Leveraged on synergies through the diversified businesses Maintained a Competitive edge through innovation
RISK
Too big to handle? Inefficiencies may crop in Lost resources? Integration issues
Next Steps
Relook into the portfolio time and again Maintain integration of processes Benchmark on a continuous basis Target on services should never be lost