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GENERAL ELECTRIC

History

Formation

Before 1889, Thomas Edison had business interests in many electricity-related
companies: Edison Lamp Company, a lamp manufacturer in East Newark, New
Jersey; Edison Machine Works, a manufacturer of dynamosand large electric
motors in Schenectady, New York;Bergmann & Company, a manufacturer of
electric lighting fixtures, sockets, and other electric lighting devices; andEdison Electric
Light Company, the patent-holding company and the financial arm backed by J.P.
Morgan and the Vanderbilt family for Edison's lighting experiments.
[10]
In 1889, Drexel,
Morgan & Co., a company founded by J.P. Morgan and Anthony J. Drexel, financed
Edisons research and helped merge those companies under one corporation to
form Edison General Electric Company which was incorporated in New York on April
24, 1889. The new company also acquired Sprague Electric Railway & Motor
Company in the same year.

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 Company
of Schenectady, New York and Thomson-Houston Electric Company of Lynn,
Massachusetts with the help of Drexel, Morgan & Co.
]
Both plants continue to operate
under the GE banner to this day.

The company was incorporated in New York, with the
Schenectady plant used as headquarters for many years thereafter. Around the same
time, General Electric's Canadian counterpart, Canadian General Electric, was formed.

STRENGTHS

competitiveness:The Companys 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).




STRATEGIES BEING EMPLOYED

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 companys 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.


REASONS FOR BEING GLOBALLY COMPETITIVE

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).

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
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 companys 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.


SOURCES:

http://www.en.wikipedia.org/wiki/General_Electric .com
http://richet.hubpages.com/hub/SWOT-Analysis-of-General-Electric-Company