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1.

            How GE new CEO “Jeff Immelt” used the past strategies implemented by his predecessor to envision
the future?
2.            On which key elements Jeff Immelt built the growth strategy at GE and why? What made him certain
that investing through the downturn is beneficial to the future growth of the company?
3.            The growth strategy required substantial investment, so how Jeff Immelt handled the financial
situation at the corporate as well as at the operational level?
4.            What were the main challenges that Jeff Immelt faced while re-building the new foundation at GE?
and how he leveraged these key challenges to go forward and turnaround the Business

1. The former CEO Welch had built GE into an extremely efficient machine that delivered
consistent growth in sales and earnings through a continuous stream of timely acquisition and
clever deal making.
GE had generated a compound annual total return to shareholders of more than 23% per year.
Immelt knew that he could not be able to replicate that performance by continuing the same
strategy. He also believed that the next 20 years, the world would be based on innovation. While
recognizing the need for change, he committed to build on what he saw as the core elements of
the company’s past success: a portfolio of strong businesses, bound through a set of company’s
wide strategic initiatives and managed by great people in a culture where growth was driven and
adaptive
Having committed to GE fundamental business model, Immelt elaborated a new vision of growth
based on using the company’s’ size and diversity of strength rather than weaknesses.
2. The five key elements are:
 Technical leadership: Immelt believed that technology has been the core of GE so he
committed to technical leadership as a key driver of future growth
 Services acceleration: Immelt believed that GE could serve customers while generating
high margins and raising entry barriers
 Commercial excellence: Immelt committed to create a world class commercial culture to
overplay the financial orientation of GE dominant approach under Welch
 Globalization: Immelt committed to expand GE sourcing strategy and market access
worldwide
 Growth Platform: Immelt believed that significant resources reallocation would be
necessary to build new business platforms that would provide growth in the future.
When asked about the reason he was investing in a downturn, he said that organic growth is the
key. Financial strength gives the ability to invest in growth and he saw that this economic cycle
as a time for investment.
3. Immelt saw opportunities to expand its NBC broadcast business to capture the fast growing
Hispanic advertising market, so the acquired Telemundo and Bravo networks. He also acquired
Enron wind energy service for a long term growth. He also saw in security systems and water
services a huge opportunities for growth and innovation so he acquired Interlogix and
BetzDearbon.
He also committed to upgrade the company’s major research and development facility by
investing in it around $100 million, and the upgrade included building new laboratories and new
meeting centers.
He also committed to long term investment that could generate return not before a decade. So to
start with the global expansion, he authorized the construction of new facilities in China and
Europe.

4. He, knew that corporate executives faced a more skeptical and cynical group of critics, so to
increase the company transparency, Immelt broke GE capital into 4 separate businesses, which
each has its own balance sheet and growth strategy. He also committed to communicate more
with the investors.
Although the company was ranked in the top 5 of for its financial performance, the company was
number 72 in social responsibility. So Immelt worked to ensure that the company was more
sensitive and responsive to its broader societal responsibilities. Another challenge was the GE
found it difficult to dispose of some of the assets it no longer regarded as vital as the insurance
businesses that were generating huge losses due to their poor underwritings. So Immelet began to
describe GE businesses as growth engines and cash generator. In addition, many of GE products
were becoming commodities and its service contracts were increasingly going to the lowest
bidder and not providing the barriers to entry they once did. So the solution was to make the
company indispensable by building enduring relationships based not only on offerings but also
on expertise. Moreover, according to Immelt the biggest challenge was to make the growth a
personal mission for every employee, so he made leaderships competency a criteria for all
internal training program and were integrated into the evaluation processes used in all
management feedback.