CS: GE Presentation

General Electric Corporation

2009: Jeffrey Immelt’s Challenge

2009 GE StrategyAgenda

1) Immelt’s Core Strategies for GE (2001-2009)2) Analysis• Ashridge Frontier• BCG Matrix

3) Financial Performance4) Recommendations and Score5) Questions

Immelt’s Core StrategiesGROWTH•Six-Part Growth Process•Portfolio Management

INTEGRATION•Building cross-functional competencies•Bundling products and services

VALUE CREATION•GE synergies•Customer focus

Organic Growth• Portfolio Management• Exit slow-growth businesses• Reallocate resources to strong growth prospects• Enter new businesses

• Intensive M&A• Selected companies with linkages to existing portfolio

• Post-M&A Integration• Incorporated into GE’s controlled-process culture

Pre-Immelt Structure

Restructure, Refocus

IntegrationDIVISIONS Broad-based Sectors•Cross-business integration•Pros: Promote HQ & divisional cooperation and improve GE’s competitive culture•Cons: Further intricacies of organization, expertise, and incentives

Bundling Products and Services•Beyond cross-selling to “enterprise selling”•Encountered a talent gap in technical areas

Value CreationSynergies•Strategic fit among businesses to create “one empire culture”•Strengthen Marketing capability and visibility

Customer Focus•“At the Customer, For the Customer”•Vertical Integration for Enterprise systems selling•Increase buyer’s switching costs and GE’s competitiveness

2008 Revenue

2008 Profit

USD

Net ProfitMillions USD

Net Profit: Core Millions USD

AAA-

Millions USD

2008 Assets

Millions USD

Score

8/10Rationale:•Portfolio management 8/10•Management Structure 8/10•Employee motivation 8/10•Financial Performance 7/10 •Influence 9/10•Stock Market Performance 5/10

Recommendations• Reduce reliance on GE Capital • Increase investment in renewable energy• Sell NBC Universal• Re-evaluate its Consumer and Industrial• Continue geographical diversification• Control internal competition• Pursue emerging markets

Thank You

Appendix Section

5-ForcesCore Sectors

Energy Infrastructure

MediumWeak

Strong

Medium

Weak

Technology Infrastructure

WeakMedium

Strong

Medium

Weak

SWOT

Macro Trends

Global Trends

Image Courtesy: GE Energy Website

Energy Infrastructure

Image Courtesy: GE Energy Infrastructure Website

Energy Infrastructure

Image Courtesy: GE Energy Infrastructure Website

Energy Infrastructure

Image Courtesy: GE Energy Infrastructure Website

Energy Diversification

Image Courtesy: GE Energy Website

Energy Diversification

Image Courtesy: GE Energy Website

GE Industrial

Video Courtesy: GE Industrial (2008)

GE Capital

Data Courtesy: GE Capital (2008)

GE Capital

Data Courtesy: GE Capital (2008)

Aviation Engines

Video Courtesy: MIT Technology Review

Appendix SectionFinancials

2006 Revenue

2007 Revenue

GE PE and US GDP Growth

GE Debt:Equity Ratio

GE Net Profit vs. Unemployment

GE Free Cash Flow vs. Brent Crude $

GE LT Debt vs. Brent Crude $

GE Profit Margin (Net) vs. Median Home Price

General Electric

IBM

GOOGLE

GE ROA vs. Median Home Price

References

• http://www.wired.com/cars/futuretransport/news/2008/06/ecoaviation23

• http://www.ge.com/pdf/investors/events/06042008/ge_webcast_presentation_06042008.pdf

• http://www.ge.com/files/usa/stories/en/Growth_The_HBR_Interview.pdf

• http://ycharts.com/