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1. GENERAL ELECTRIC COMPANY
2. INTRODUCTION General Electric Company or GE, is an American
multinational conglomerate corporation incorporated in Schenectady,
New York and headquartered in Fairfield, Connecticut, United
States. The history of General Electric Company is a significant
part of the history of technology in the United States. General
Electric (GE) has evolved from Thomas Edisons home laboratory into
one of the largest companies in the world, following the evolution
of electrical technology from the simplest early applications into
the high-tech wizardry of the early 21st century.
3. .. The company has also evolved into a conglomerate, with an
increasing shift from technology to services, and with 11 main
operating units: GE Advanced Materials GE Consumer & Industrial
GE Energy GE Equipment Services, GE Healthcare GE Infrastructure,
GE Transportation, NBC Universal (80 percent owned by GE), GE
Commercial Finance GE Consumer Finance; GE Insurance
4. .. The staggering size of General Electric, which ranked
fifth in the Fortune 500 in 2003, became even more evident through
the revelation that each of the companys 11 operating units, if
listed separately, would qualify as a Fortune 500 company. GE
operates in more than 100 countries worldwide and generates
approximately 45 percent of its revenues outside the United States.
Over the course of its 110-plus years of innovation, General
Electric has amassed more than 67,500 patents, and the firms
scientists have been awarded two Nobel Prizes and numerous other
honors.
5. CORPORATE RECOGNITION ANDRANKINGS In 2011, Fortune ranked GE
the 6th largest firm in the U.S., as well as the 14th most
profitable. Other rankings for 2011 include the following: #7
company for leaders (Fortune) #5 best global brand (Interbrand) #82
green company (Newsweek) #13 most admired company (Fortune) #19
most innovative company (Fast Company). For 2010, GEs brand was
valued at $42.8 billion.
6. JACK WELCH Mr. Welch served as Chairman and CEO of GE from
1981-2001. When Jack Welch took over GE in 1981 and became the
youngest CEO in GEs history. Welch was a strategic thinker,
business teacher, corporate icon and management theorist. As CEO of
GE, Mr. Welchs management skills became almost legendary. He had
little time for bureaucracy and archaic business ways. Managers
were given free reign as long as they followed the GE ethic of
constant change and striving to do better. During his 20 years of
leadership in this position, Welch increased the value of the
company from $13 billion
7. Vision and Mission ofGE
8. VisionWe bring good things to life
9.
Mission"PassionateCuriousResourcefulAccountableTeamworkCommittedOpenEnergizingAlways
With Unyielding Integrity"
10. What we incur? They Are a Company to Believe In. Imagine.
Build. Solve. Lead.
11. Transnational index
12. Why did GE Intrnationalize ? The Enron collapse > raised
questions on american companies corporate governance and corporate
finance The 2001 terror attacks : uncertain environment > GE
energy sales fall > fall in the demand of aerospace products in
the U.S > either they cancelled their orders of gas turbines or
placed very few new orders . > GEs insurance subsidiary,
Employers Reinsurance Corporation, was one of the insurers of the
World Trade Center which had to pay out on liability claims. >
GE Capital had financed aircraft Falling sales in the GE energy and
GE Capital ( profit margins stood at 9.6%)it had Immlet wanted to
invest more in GE healthcare ( margin : 20% ) and thus bought
Amersham International, the British medical research and bioscience
company, was part of the strategy to strengthen research and
innovation.
13. The ecenomic weekness in europe 1989-95 >$17.5
billion> to purchase 50 companies. In 1995 the value of peso
(mexican currency)collapsed > ecenomic uncertainity > bought
companies in latin america. in 2004, GE moved the head office of
its health care business from the United States to London, the home
of Amersham, a company GE had just bought. Executives at GE Health
Care like London because it allows easier flights to anywhere in
the world. Internationalization of R&D center : shanghai and
bangalore > because MRI scanners manufacturing in U.S cost $ 1.5
million and in china cost $0.5 million. Global competitors like
seimen of germany and philips of netherlands were
internationalizing their R&D centres to tap the broad range of
scientific expertize of the mid western and eastern countries
14. GE ENERGY IN CHINA 1997 : Asian Currency Crisis >
reduced FDIs in china WTO membership in 2001 2008 Bejieng
Olympic> high demand for infrastructure investments :
electricity lighting water WORLDS 2ND LARGEST EMMITTOR OF
GREENHOUSE IN 2007. > inviting green technology solutions : GE
Energys competative advantage > double the energy it gets from
natural gas > Green olympic Rural to Urban movement is MAXIMUM
> fueling infrastruscture developent > greater
electricity.
15. GE HARBIN JOINT VENTURE wind turbine market : fastest
growing in the world. 13.8 GW of new installations compared to out
of 38.3 GW installations globally > expected growth of 500 % in
next decade Strong Govt support Chinas electricity demand : 12%
growth per year High Cost of shipping wind turbines > a
windturbine can weigh 400 tons- 800 assembled parts > fuel and
port costs have risen by 15 % in last 3 years. Job creation in the
U.S
16. CHALLENGES Corruption in china > rule of law> change
in legislation policies. > INVEST IN US CHINA LEGAL COPPERATION
FUND. Getting govt support > 335 products for olympic games
accounting for $500m revenue. Intellectual Property rights > GE
is known for innvative products > not immitable nor perfectly
substituitable
17. CO-OPERATION STRATEGY Meaning. MERGERS AND ACQUISITIONS.
Merger and acquisition is often known to be a single terminology
defined as a process of combining two or more companies together.1.
Backward vertical integration.
18. ABOUT GE ENERGY Division of GE, headquartered in Atlanta,
Georgia, United States. Formation Reorganization. Revenue $37.1 bn.
Employees 82,000. Divisions1. GE energy management.2. GE oil and
gas.3. GE power and water. ABOUT CONVERTEAM electrical engineering
company based in France. Key components1. Motors and generators.2.
Variable speed drives.3. Automation and process controls. Employees
5,300.
19. THE DEAL When March, 2011. What GE Energys acquisition of
Converteam. How much 90% stake for $3.2bn. Parties involved Senior
management , Barclays equity finance and LBO France.
20. WHY ? FACTORS LEADING TO THE DEAL Growth of converteam 36%
Market for converteams products - $30 bn in 2010. Demand for steady
power in Brazil and China. Diversification from nuclear power to
renewable energy.
21. ADVANTAGES TO GE Adds products to GE portfolio. Enhances
ability in emerging economies and key growth economies. Earnings
boost $250 million annually. Cost advantage - $239 million EBITDA.
Expansion into marine and mining industries. Edge over competitors
ABB ltd. Of Switzerland and Siemens of Germany.
22. Retrenchment StrategyCorporate Level Strategies
Retrenchment Strategy DivestmentGE Plastics divestment to Saudi
Basic Industries Corporation (SA GE Plastics
23. About GE Plastic About SABIC Global supplier of Largest
public co. in plastic resins Middle East Major player in PC Largest
petrochemical market - LEXAN co. by market value Integrated both
ways Composed of six SBUs forward & backward 4th largest
polymer Plastics for automobile producer industry Employs about
19,000 Spans over 20 countries people Employs about 10,300
people
24. The DealGE Plastics will sell its Plastics division to
Saudi Arabias SABIC in a $11.6 billion cash deal, including $8.7
billion of its liabilities.
25. Reasons for GE to sell PlasticDivision High Cost of Raw
Material Reducing Sales & Profit Margins Source : GE
26. Reasons for GE to sell PlasticDivision High Competition
Source : Frost & Sullivan
27. Reasons for GE to sell PlasticDivision Environmental
Obligation Changing Business Line GE Healthcare GE Aviation GE
Energy
28. Advantages for GE High Price Received Buy Back Shares
Acquisitions
29. Advantages for GE Saudi Arabia Market & Right Buyer GE
Healthcare Corporate Image
30. Disadvantages for GE High demand for Engineering Plastics
High Profits
31. Disadvantages for GE Glorious Past To Conclude
32. SWOT Analysis A SWOT analysis is typically represented by a
4-box model that lists the Strengths, Weaknesses, Opportunities,
and Threats in the following order:
33. STRENGTH GE is the market leader Diversified business
portfolio Strong research & development (R&D) A number of
acquisitions made in the previous few years. Strong management
& culture in terms of people, systems, technology and
measures
34. WEAKNESS GE is the 4th largest producer of air and water
pollution. Weak revenue growth of industrial segment.
Underperforming in Asian markets. GE energy segment is under
performing. Generates more than half of its profits from GE capital
services, hard hit by the
35. OPPORTUNITY Focus on Corporate Social Responsibility
Invasion of China market Aviation industry growth Increasing global
exploration and production Servicing and regeneration of commercial
airplanes around the world customer services initiative
36. THREAT Senior management weak performance by GE has put
doubts on Jeff Immelts ability to be the next Jack Welch. Currency
fluctuations. Intense competition in the industry. Recession in
majority companies. Exposure to financial markets. Government
regulation on environmental concerns World economic slowdown in the
US and Eurozone, two of the most important markets
37. Conclusion GE consists of diversified technology and is a
giant is the field of financial services. Amidst a number of
strategies undertaken, co- operation and retrenchment stand out. GE
excels in playing on strengths and capitalizing opportunities. Over
a decade, a slight ignorance towards the weaknesses has been
observed. GE has a set of well planned strategies which lands them
amongst one of the most successful global firms.