K.C.

COLLEGE
TYBBI 2011
GENERAL ELECTRONICS
APPLIANCES

SUBMITTED TO:
Prof. Mrs. Tonia Mehra
17th February 2011

SUBMITTED BY:

• Manali Jain 02
• Priyanka Das 07
• Akash Shah
• Prachi Shah
• Foram Shah
• Akil Roopawala
 INTRODUCTION

General Electric is a diversified technology, manufacturing and services

company, which produces transportation equipment, aircraft engines,
consumer and industrial appliances, lighting, nuclear reactors, medical
equipment and plastics. It owns the NBC television network, a global
media powerhouse with significant holdings in broadcast and cable
television and the Internet. GE's financial and insurance divisions account
for nearly half of the company's sales, making the company one of the
largest financial services companies in the United States. The company
has operations in more than 100 countries, a workforce of more than
315,000, and 2002 revenue of over $131 billion. GE ranks fifth in the
Fortune 500. GE headquarters are in Louisville, Kentucky
and our operations are located in North America, Europe, Asia and Latin
America.

Consumer & Industrial-- Consumer & Industrial (6.2%, 6.4% and 7.3%
of consolidated revenues in 2009, 2008 and 2007, respectively) sells
products that share several characteristics − competitive design, efficient
manufacturing and effective distribution and service. Cost control,
including productivity, is key in the highly competitive markets in which
GE compete. GE also invest in the development of differentiated, premium
products that are more profitable such as energy efficient solutions for
both consumers and businesses. While some Consumer & Industrial
products such as major appliances are primarily directed to consumer
applications, and some primarily to industrial applications such as
switchgear, others, such as lighting, are directed to both markets.

GE sell and service major home appliances including refrigerators,

freezers, electric and gas ranges, cooktops, dishwashers, clothes washers
and dryers, microwave ovens, room air conditioners, and residential water
systems for filtration, softening and heating. Brands are GE Monogram®,
GE Profile™, GE®, Hotpoint® and GE Café™.

Consumer & Industrial also provides integrated electrical equipment and

systems used to distribute, protect and control energy and equipment. GE
manufacture and distribute electrical distribution and control products,
lighting and power panels, switchgear and circuit breakers that are used
to distribute and manage power in a variety of residential, commercial,
consumer and industrial applications

GLOBAL RESEARCH
John F Welch Technology Center (JFWTC) at Bangalore, the company’s first
and largest integrated multidisciplinary Research and Product
Development Center outside the US, celebrated its tenth anniversary in
2010. The Centre collaborates with GE's four other R&D facilities that form
the GE Global Research team (the Research Centre in Niskayuna, New
York; Munich, Germany; Shanghai, China and Rio De Janeiro, Brazil) to
conduct research, development and engineering activities for all of GE's
diverse businesses worldwide.

The key technologies that the center has worked on during the tenure
include a Powerhaul Locomotive that serves the transportation sector, the
new baseline turbofan engine called LEAP-X for the aviation industry,
Healthcare products like the Lullaby Infant Warmer and MAC 400 Ultra-
portable ECG among many others. JFWTC has grown from a 275-employee
facility to over a 4,000 employee strong facility today. Pioneers of the
‘Reverse Innovation’ strategy, GE’s largest multidisciplinary R&D
Centre has over a 1000 patents to its credit.

Key Initiatives

Healthymagination: Our "healthymagination" vision for the future invites

the world to join us on our journey as we continuously develop innovations
in the area of healthcare focused on reducing costs, increasing access and
improving quality and efficiency around the world.

Ecomagination: Ecomagination is a business initiative to help meet

customers’ demand for cleaner and more energy-efficient products and to
drive reliable growth for GE. Ecomagination also reflects GE’s commitment
to invest in a future that creates innovative solutions to environmental
challenges and delivers valuable products and services to customers while
generating profitable growth for the company.
 GE RISK INFRASTRUCTURE
GE risk infrastructure is designed to identify, evaluate and mitigate risks
within each of the following categories:

Strategic - Strategic risk relates to the company’s future business plans

and strategies, including the risks associated with the markets and
industries in which we operate, demand for our products and services,
competitive threats, technology and product innovation, mergers and
acquisitions and public policy.

Operational - Operational risk relates to the effectiveness of our

people, integrity of our internal systems and processes, as well as
external events that affect the operation of our businesses. It includes
product life cycle and execution, product performance, information
management and data security, business disruption, human resources
and reputation.

Financial - Financial risk relates to our ability to meet financial obligations

and mitigate credit risk, liquidity risk and exposure to broad market risks,
including volatility in foreign currency exchange and interest rates and
commodity prices. Liquidity risk is the risk of being unable to
accommodate liability maturities, fund asset growth and meet contractual
obligations through access to funding at reasonable market rates and
credit risk is the risk of financial loss arising from a customer or
counterparty failure to meet its contractual obligations. We face credit risk
in our industrial businesses, as well as in our GECS investing, lending and
leasing activities and derivative financial instruments activities.

Legal and Compliance - Legal and compliance risk relates to changes in

the government and regulatory environment, compliance requirements
with policies and procedures, including those relating to financial reporting,
environmental health and safety, and intellectual property risks.
Government and regulatory risk is the risk that the government or
regulatory actions will cause us to have to change our business models or
practices.
Risks identified through our risk management processes are prioritized
and, depending on the probability and severity of the risk. We have
general response strategies for managing risks, which categorize risks
according to whether the company will avoid, transfer, reduce or accept
the risk. These response strategies are tailored to ensure that risks are
within acceptable GE Board tolerance levels.
Depending on the nature of the risk involved and the particular business or
function affected, we use a wide variety of risk mitigation strategies,
including hedging, standardized processes, approvals and operating
reviews, insurance and strategic planning reviews. As a matter of policy,
we generally hedge the risk of fluctuations in foreign currency exchange
rates, interest rates and commodity prices.
Furthermore, we centrally manage certain risks through insurance
determined by the balance between the level of risk retained or assumed
and the cost of transferring risk to others. We counteract the risk of
fluctuations in economic activity and customer demand by monitoring
industry dynamics and responding accordingly, including by adjusting
capacity, implementing cost reductions and engaging in mergers and
acquisitions.
 GE BUSINESSES IN INDIA
GE’s presence in India dates back to 1902 when GE installed India’s first
hydro power plant in the country. GE’s story is one of technology and
innovation in India, for India. GE has been a long-term local player in
transportation, energy, healthcare and financial services. The company has
a significant footprint across key locations in the country with technology
centers at Hyderabad and Bangalore. GE employs over 13, 000 people in
India. It exports over $1 billion in products and services.

• Technology Infrastructure comprises healthcare, transportation, aviation

and enterprise solutions

• Energy Infrastructure comprises energy, coal, oil & gas, nuclear energy,
and water & process technologies as well as renewable resources such
as wind and biogas

• GE Capital includes commercial and consumer financial businesses

• GE’s India Technology Centre, Bangalore, India Innovation Centre and

Hyderabad Technology Centre are GE’s technology research and
development centres.

ARTICLE:

GE Appliances forays into India, eyes $10 million revenue

CHANDIGARH: Announcing its entry into the Indian market with the launch
of air conditioners in Punjab, GE Appliances said that it would soon roll out
other kinds of home appliances to earn a revenue of up to $10 million by
the end of the current fiscal.

GE appliances, which showed its intention to enter the Indian market

over eight months ago, has tied up with Delhi- based Shelka Marketing
Private Limited for distributing appliances in the northern region.

"We are looking to earn a revenue of $10 million this fiscal with the launch
of our ACs, washing machines, refrigerators and cooking appliances from
the northern region only," GE sales manager (appliances-India) Narender
Singh Ranawat told reporters here today.
 While the company expects 60 per cent revenue from ACs, it intends
to get the rest from other electronic appliances such as washing machines
and refrigerators.
GE Appliances has plans to launch its washing machines in July,
refrigerators in September and cooking appliances in January next year.

With the intention of tapping only top-end customers in the country, the
company would import its products from Latin America, North America,
Europe and South East Asia.

GE sales manager (appliances-India) Narender Singh Ranawat told

reporters here today,We will be importing our products from different
countries to meet country's requirements. We have also kept our avenues
open to local sourcing of these products in future provided we get same
standard which we maintain," he said.

GE Appliances has also plans roll out its products in South India in this year
as it has tied up with another distributor Servomax which would be
responsible for selling GE items in South India.

"We are also looking for more partners who could be associated with us for
launching our products in eastern and western markets," he said.

GE Appliances would also open its exclusive outlets known as 'GE

Shoppees' in northern region to further penetrate the markets. "We will
open our first outlet in Chandigarh and thereafter more shops will be
opened in smaller cities," said PK Mahindra, Managing Director, Shelka
Marketing.

He further said that Shelka would set up India centric Appliances

Modification and Training Excellence Centre for development of
prototypes, product demonstration and training to GE dealer sales staff.
 CORPORATE CITIZENSHIP
GE aspires to be a leader in corporate citizenship. At GE, corporate
citizenship is not merely a program or a set of good intentions, but a set of
behaviors and actions that are integrated with the business strategy of the
company. GE is committed to investing in a corporate citizenship
framework that is based on strong economic performance of the Company,
rigorous compliance with legal and fundamental ethical requirements and
taking ethical actions beyond compliance to increase long-term value.

GE Volunteers: GE Volunteers is a global community service organization

of more than 52,500 GE employees and retirees in 143 chapters with a
presence in 44 countries. GE Volunteers are committed to improving their
communities, their company and their lives through volunteerism,
leadership and camaraderie. The India Volunteers team has over 3,500
members and has grown to six chapters - New Delhi, Bangalore,
Hyderabad, Chennai, Mumbai and Jaipur. In 2009, GE Volunteers spent
over 21,000 volunteer-hours, partnering with 35 not-for-profit
organizations to support projects across 12 Indian cities.

GE Foundation: GE Foundation, the philanthropic foundation of the GE,

invests in improving educational quality and access as well as
strengthening community organizations around the world. The GE
Foundation India Scholarships are awarded to students who have the
potential to become future leaders and who are pursuing post graduate
courses in engineering, science and management. The GE Foundation has
awarded scholarships to over 260 students across 25 institutes amounting
to US $1,371,000. Selection criteria include not just an excellent academic
record, but also strong leadership and good citizenship qualities. These
grants reiterate GE's high confidence in India's rich intellectual capital.

Diverse Talent: The GE Women's Network is a voluntary organization

formed to support the professional development of women at GE. It was
established to build a pipeline of high potential women in senior leadership
roles. Development is focused on leadership, advancement and career-
broadening opportunities through a variety of tools, including information,
education, leadership interaction and networking with other women to
share and learn best practices. Launched in India in 2002, the GE Women’s
Network has a vibrant presence across key locations of GE in the country.
 SWOT ANALYSIS

STRENGTHS
Global recognition: General Electric has ventured into the world market
thus gaining global recognition for its unique goods and services. In the
year 2009, Forbes magazine ranked GE as the world's largest company.
Hurbert (2007) notes that General Electric's brand is the world's most
recognized brand. This kind of recognition has given it a competitive edge
over other companies due to its ability to attract more customers.

Global strength and competitiveness: The Company’s products have

been recognized for their quality and the company is known for meeting
customer-specific needs (General Electric, 2009). As a result, it has
attracted numerous clients including corporations and government
agencies and its competitive position is quite favorable. GE is the biggest
lender in many of the countries where it invests with exception of the
United States (Hurbert, 2007). Its power generation equipment generates
a quarter of the world's electricity everyday.

Excellent Management: GE utilizes a unique management style,

whereby business operations are divided into business units. Each
business unit plays a distinct role within the company and has its own
independent management. Examples include GE Commercial Finance, GE
Equipment Services, GE Energy, GE Insurance, and GE Consumer Finance
among others. This kind of management style increases productivity due
to the high level of accountability and efficiency that business unit
managers are expected to maintain.
Diversified lines of operation: GE has invested in a wide range of
products under its units. These activities range from technology, energy,
automotives, and aviation and home appliances to financial services and
insurance services among other undertakings. This kind of diversification
shields the company from risks in case of misfortunes.
Environmental initiatives: GE has ventured into environmental
initiatives as it embraces the green economy and increased social
responsibility. Its 'Ecoimagination' program is undertaking the production
of environmentally friendly technologies, energy sources such as solar, low
emission engines for airplanes, hybrid locomotives and water purification
(Makower, 2005). This has earned a good reputation for the company
which is considered socially and environmentally responsible.

WEAKNESSES
Under-performing energy sector:Following the global crisis and the
serious fluctuations in fuel prices, the energy sector is not performing as
expected (Hurbert, 2007). Fluctuations in prices of oil and gas have
mostly been caused by supply shortages and this has threatened the
company's profitability.
Threat to flexibility:Too much diversification is often considered
dangerous for a company. This is because it results in over-stretching
which usually slows down decision making. At GE, the numerous units
require attention and could prove hard to manage if excessive
diversification occurs.

OPPORTUNITIES
Mergers and acquisitions: GE has performed several mergers in the
recent past. These not only help the company to expand globally but to
diversify its activities into new areas thus increasing productivity. Some of
the companies include Interbanca S.P.A, Whatman Plc, VetcoGrey and
Turbomecanica Combustor Products (General Electric, 2009). The merger
of NBC with Vivedi opens better opportunities for GE in the media
business.
Research and development:Intensified research and development
characterize the company's activities as it seeks to maintain a competitive
edge over others in the same industry. A substantial amount of resources
are committed in the company's relentless efforts to ensure the production
of innovative products which meet current customer demands (Hurbert,
2007).

THREATS
Competition: Operating in an environment where stiff competition is
present is a threat in itself. Just like any other company, GE risks losing its
customers to competitors. Competition could be intensified by better
production techniques and technology among competitors such that the
company's goods may be outdone in the market.
Information security:When it comes to information security, every
company faces a threat of losing important information through hackers,
natural disasters and employee dishonesty. Loss of information could
greatly affect the company's activities and cause a slow-down in
production.
Financial crisis: The global financial crisis has had an effect on most
companies in the world today. The rises in prices and shrinking bank
lending rates have deprived businesses of the much needed profits and
capital respectively.
Media depictions: Depictions put forth by the media on certain
occurrences about a company could ruin its operations. GE has been a
victim of media deception and was associated with the Enron scandal
which brought a lot of criticism and loss of investor confidence. The
documentary named 'deadly deception' aired in 1991 displayed GE as a
threat to human life for participating in testing and building of nuclear
weapons (Chasnoff, 1991). Such depictions could be used by competitors
to tarnish the company's name.
EVALUATION AND ANALYSIS OF SWOT
It is notable that GE has a number of strengths that work to its advantage
by enhancing profitability. Its global recognition, strengths and
competitiveness put GE at a favorable position as compared to other
companies in the same sector. The use of business units for management
presents an effective way to manage the expansive company. This not
only reduces the possibility of overwhelming senior management with
work but also promotes productivity based on accountability expected
from the business unit managers. The company undertakes numerous
activities which highly contribute to profitability. This is enhanced by the
mergers and acquisitions that have diversified the company's product
range and in turn leading to improvement on profits incurred.
The strengths and opportunities however have not come without
constraints. Various threats and weaknesses threaten the performance of
the company by presenting constraints on the company's management.
High levels of competition, financial crises and threat of information loss
are a threat to the company’s survival. Weaknesses within the company
including the poor productivity of the energy sector and flexibility threat
could impact negatively on the company.
In order to reduce the impact of threats and weaknesses, the company
could use the strengths and opportunities to mitigate them. For example,
the company's established research and development could be used to
curb competition by coming up with innovative products from time to time.
The efficient management can also be used to prevent loss of data
through implementing proper control measures and to avoid losses which
could exemplify the situation caused by the financial crisis.
 GE EXTERNAL ENVIRONMENT

a) Political
As a multinational company, General Electric has to deal with political
systems of different nations. In spite of some of the countries presenting
favorable environment for business survival and growth, others present
difficult conditions. Tax systems and regulations also differ across
countries and so does the level of government intervention in business
activity. For example, in United States, the Internal Revenue Authority
requires companies to submit tax returns annually on April 15 (Dibb &
Lyndon, 2004). Government intervention is minimal and the business
environment is much favorable. Political stability can also be said to be
reasonable so that business survival is highly probable. These conditions
may not apply in other countries such as China and Singapore where
government control over businesses is high.

b) Economic
Fluctuations in interest rates, exchange rates and money value greatly
affect activities and operations of General Electric. Factors such as
deflation and inflation as well as government spending in different
countries in which General Electric has ventured often influence business
productivity and profitability. The economic impacts caused by the current
economic crisis are being felt all over the world. General Electric has
recorded decreased sales mostly due to lower lending rates by banks. In
addition to that, prices of inputs have also risen considerably.

c) Social-Cultural
Norms, culture, religion and social set-ups often determine how a business
should conduct itself in a particular country or environment. In the
different countries which General Electric has ventured into, the company
is faced by different social-cultural challenges which influence its corporate
culture to a very large extent. The culture in a particular country
determines the working hours, employment policies, procedures for
appointing managers and the type of goods to be produced. Similar to
other multinational companies, General Electric has to contend with such
issues and deal with them effectively.

d) Technological
Technology in the modern world is advancing at an enormous pace.
Innovative products are always being introduced using more advanced
technology each day. Older technology is therefore getting outdated at a
very high rate across all sectors in the economy. Aimed at outdoing
competitors, many companies have turned to innovation, research and
development which have brought about improved levels of technology.
The rate of technology advancement globally varies with each country that
General Electric has invested in as they vary in terms of resources
available. Among the countries with the highest rate of technology
advancement are United States and Japan which General Electric has
ventured into (General Electric, 2009).
 COMPETITIVE LANDSCAPE
Sales are driven by demand from the construction, telecommunications, and hardware retailing
industries. Profitability depends largely on merchandising and efficient inventory management.
Large companies have wide distribution networks and may offer customers a broad selection of
products and services. Small operators can compete successfully by stocking specialty products,
stocking all of the parts their particular customers need, or delivering superior service. The industry is
capital-intensive: average annual revenue per employee is about $600,000.

GE Competitors

• Tier 1 GE Competitors: Honeywell (HON), Siemens AG (SI), United Technologies Corp

(UTX), 3M Company (MMM)
• Tier 2 GE Competitors: Bank of America (BAC), JPMorgan Chase (JPM), News
Corporation (NWSA), Viacom (VIA), The Walt Disney Company (DIS)

RECOMMENDATIONS

The following are the recommendations:

Grow GE’s presence in multiple dimensions, localise it and transform the

organisation for the long run.

The opportunities in GE’s core areas of infrastructure (power, railway,

water treatment and so on), oil & gas and finance continue to remain
huge. These (growth) markets are investing trillions of dollars in
infrastructure and favour a multi-business company that can bring
solutions. This allows GE to form a ‘company-to-country’ approach in
countries where government and business work together to solve
infrastructure needs

Ever since GE set up shop in India, all the business lines reported to their
global business headquarters. As a result, they didn’t have a reporting
relationship with the Indian CEO. What it meant was that GE’s business in
India was not looked as a single profit & loss centre. Key decisions on
products, distribution and investments were taken outside India. The
results, as a consequence, were less than desired.

All management thinkers have stressed the need for multinational

corporations to think local. Those who listened carefully to the Indian
customer have gained immensely; those who didn’t have failed miserably.

“It also gives GE more scale and critical mass, creates better jobs and
career opportunities. The company with the best team on the field ends up
number one.