Professional Documents
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"I never perfected an invention that I did not think about in terms of service it might give others"
- Thomas Alva Edison, GE Founder
In 1890, Thomas Alva Edison established the Edison General Electric Company in Menlo Park, New Jersey At the same time Charles A. Coffin was growing his business, The Thompson Company It was increasingly difficult for Edison and Coffin to remain competitive based their own technologies
The two companies united in 1892 and formed The General Electric Company
Reginald H. Jones
Chairman & CEO, 1972 1981 Managerial qualities: Intellectual breadth, strategic capability, social sensitivity, political sophistication, worldworld-mindedness, and above all, a capacity to keep their poise amid the cross-currents of crosschange. Relationship between business and government
Jeffrey R. Immelt
Chairman of the Board and Chief Executive Officer, 2001 Present Today New Frontiers & Strategic Alliances for GE
NBC-Universal acquiring NBCinterest in Telemundo network GE and Honda form GE Honda Aero Engines LLC, design small (private) jet engines
NBC Universal
Healthcare
Consumer Finance
Entertainment
Advanced Materials
Insurance
Equipment Services
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1. 2. 3. 4. 5. 6.
6 Key Areas Critical to Quality Defect Process Capability Variation Stable Operations Design for Six Sigma
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Advanced Materials Commercial Finance Consumer Finance Consumer & Industrial Energy Equipment & Other Services Healthcare Infrastructure Insurance NBC Transportation Corporate items and eliminations
5.27% 15.51% 9.57% 9.57% 14.22% 3.30% 7.60% 2.29% 19.52% 5.12% 10.07% -2.05%
5.27% 14.82% 7.76% 9.75% 17.88% 4.19% 6.77% 1.44% 17.62% 5.41% 10.35% -1.26%
5.59% 14.02% 7.52% 10.33% 16.64% 6.12% 6.65% 0.31% 18.90% 4.56% 10.98% -1.63%
6.15% 13.46% 7.15% 10.28% 12.04% 11.56% 5.58% 0.37% 18.99% 5.21% 10.19% -0.99%
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Insurance, 19.52%
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Ratio Analysis
2008 ROE Gross Profit Margin Debt-to-asset Debt-toRatio Debt-to-Equity Debt-toRatio Current Ratio 22.16% 60.02% 87.97% 794.38% 2.13 2009 18.95% 61.84% 86.88% 710.44% 2.35
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Competitors of GE
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Main Competitors
ALSTOM
specialize in energy, ship buildings and marine systems and transport infrastructure. Headquarters in Paris, France Acquired ABB (Asea Brown Boveri, a leading competitor to GE)
A force to be reckon with; would be GEs ultimate competitor
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Main Competitors
Siemens
electronics and electrical engineering company
6 groups:- Automation and Control, Information and groups:Communications, Medical, Power, Transportation, and Lighting provides industrial automation and control, information and communications, lighting, medical, power transmission, and transportation products and services
Very similar to GE; strong brand name equity, has business operations in over 190 countries
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5 Forces Model
Rivalry among competitors
ALSTOM and Siemens, in particular Creating competitive advantages to gain bigger market share
Acquisitions, mergers and jointjointventures Battle for innovation and technological improvements
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5 Forces Model
Potential of New Entrants
Adaptac (1981) and Adept Technology (1983) Late bloomers, but slowly gaining market share Does not pose too much of a threat to GE, ALSTOM or Siemens for now Tough for new entrants to pinch a sizable chunk of market share from GE, ALSTOM or Siemens
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5 Forces Model
Suppliers
Materials, parts, components, other resources Vertically integrated (GE Advanced Plastics, GE Consumer and Industrial Manufacturing) Has to be aware of suppliers that might integrate forward
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5 Forces Model
Substitutes
Has many substitutes that might pose a threat Very well-diversified which means that GE is wellspreading the risk of failure in every market Eg. GEs NBC-Universals substitute are pirated NBCVCDs or DVDs
Buyers
Similar to its substitutes, GE has a broad line of buyers, ranging from consumers to large corporations Eg. GE Healthcares buyers are hospitals and pharmacies.
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High
Performance/Product Quality
General Electric
Adaptac Alstom
Adept Technology
Siemens
Low
Less Diversified
More Diversified
Product Range
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Excellent management
Proven leadership and business model Confident investors raising capital
SWOT Analysis
Weaknesses
Company size/ acquisition restriction
Eg. GEs planned acquisition of Honeywell International, a diversified technology and manufacturing company, specializing in aerospace products, was rejected by the EU
Energy Segment
Underperforming, no signs of near future recovery
Flexibility
Large and diverse businesses might overstretch the company and reduce reaction times to shifts in targeted markets
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SWOT Analysis
Opportunities
Research and Development
Immense capital allows GE to contribute a lot to R&D for product development and improvement
SWOT Analysis
Threats
Exposure to global economy
Economy slowdown would affect GE, since 40% of the revenue is generated overseas Exposed to currency fluctuations
Competition
Constant change in technology heats up competition Very diverse:- tough to be the best in all industry diverse:38
Key Competencies
Competence
Great and proven leaders
Eg. Eg. Jeffrey R Immelt, Jack Welsh, Immelt, Reginald H. Jones
Expertise
More capital can be invested in R&D
Core Competence
Innovative Desire to strive for perfection (6 Sigma)
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Key Competencies
Distinctive Competence
Ability to respond to the drivers of change by understanding the important global trends Acquisition of rivals and other companies
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Recent News
GEs $1200 million acquisition of InVision Technologies
March 15, 2009, GE made it public September 16, 2009, FTC gave approval but deal is still not finalize
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Recent News
Advertising Campaign
Genworth, a financial company part of GE, has signed a 5 year contract to license the GE logo and use the slogan, Built on GE heritage Genworth is planning to allocate $30 million into advertising this coming year
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Recent News
October 11, 2004, Senate passed a $136 billion corporate tax package that cuts taxes for businesses
Includes $76.5 billion in new tax relief for the manufacturing sector Includes $42.6 billion in tax relief for multinational companies Additional capital from the tax break could be used for reinvestment, increase dividends, etc
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Strengths
Reported by Forbes as the largest company of 2009. 2009. The company has 3 23,000 employees. 23, employees. The company deal with huge number of products which include Genie, Aviation, Jet engines, Electricity, Entertainment, Finance, Gas, turbines, Generation, Industrial Automation, Lighting, Medical imaging equipment, Medical technology, Health informatics, Electric motors, Locomotives, Wind turbines, TV and motion pictures. pictures. GE has total asset of worth US$ 797.769 billion as per US$ 797. Company 2008 Balance Sheet. Sheet.
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The company made number of acquisition in previous few years. years. Enjoying high revenues and profits. profits. GE is the fourth most recognized brand in the world. world. The ge.com is the 20th domain to have been ge. 20th registered on August 5th 1986. 1986. It has four divisions namely GE Energy Infrastructure, GE Technology Infrastructure, GE Capital, and NBC Universal. Universal. GE ranked ninth on Fortune Magazines 50 Most Desirable MBA Employers list. list. Excellent Research and development department. department. Operating in 160 countries Diverse product range
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Opportunities
Research and development Opportunity to invade china market. Mergers with companies Reduce pollution Improve customer service Aviation industry growth
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Weaknesses
GE is the 4th largest producer of air and water pollution. pollution. GE was charged by department of defense on corrupt practices for Jet Engines sales to Israel. Israel. In past misleading investors for high returns. returns. Performing not very well in Asian markets. markets. GE energy segment is under performing
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Threats
Currency fluctuations. Intense competition in the industry Recession in majority of countries. Government regulation on environmental concerns. Exposure to financial markets
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Conclusion
GE recognizes that part of being successful and well-respected is being socially responsible wellas well Has huge potential to remain successful without any major threats from competitors
Staying Power
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