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Group 5 Eshwar Kunal Naaznine Parth Shashank

Agenda
GE Quick Facts SWOT Analysis Timeline Actions and financial outcomes

Growth Strategy
McKinseys 7S model Conclusion Risk Next Steps

General Electric Quick Facts


Founded by When Headquartered at Forbes list Total revenues Global Presence Thomas Edison 1876 Connecticut, US 3rd $147.3 billion More than 100 countries

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

2004 2003 2002 2001

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

2004 2003 2002 2001

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%)

2004 2003 2002 2001

2005

2003
Continued to drive his growth strategy

Major acquisitions (Universal and Amersham)


Bringing creative and innovative outsiders Portfolio transformation: Growth engines and cash generators

Focus on service: 17.42% of revenues from services


NPS: Tying compensation to this score

Freed up $ 4.5bn in cash by selling insurance entities Total revenues declined by 0.8% Profits increased by 4.22% (promised double digit)

2004 2003 2002 2001

2005

2004
Generation of growth leaders: 5 traits

New initiative : Lean Six Sigma


Simplification: Reducing overheads Prediction: Growth Engines would generate 90% of companys earnings in 2005

Achieved $ 2.7bn in working capital Transportation & energy reduced costs by $300mn 9 out of 11 businesses had double digit earnings

2004 2003 2002 2001

2005

2005: Innovation & Internationalization


Imagination Breakthroughs Technological innovations Market expansion opportunities Product commercialization proposals Ideas to create value for customers First year 80 IB initiatives Funded $5bn to deliver $25bn Of Town Halls and Dreaming TOWN HALLS
CEO and other leaders got out in the market to interact with customers To provide feedback on direction

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

Concentrate on expertise as a differentiating factor


Continue to target innovation