Discussion—General Electric Sustained profits come from building a competitive a

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Discussion—General Electric

Sustained profits come from building a competitive advantage. This advantage can be accomplished not only through good financial return on a specific process but also through the correct capacity decisions that must be integrated into the organization’s mission and strategy.

Jack Welch, former CEO of General Electric (GE), understood this better than anyone else. Although GE was a profitable and respected company when Welch took over, its financial results during the1970s were troubling to both its investors and senior management. Welch immediately made changes to the company’s structure and management practices. From the beginning, he stressed the importance of being one of the top players in the industry. He told his colleagues that GE should always be number one or number two in all its businesses; if it was not, then their only options would be to fix, sell, or shut down.

Because of this strategic direction, GE today usually dominates the markets in which it participates; and if it does not, then it divests. A major part of GE’s strategy is to be the first or second in every market. As you review the module readings for this week, consider the complexity of GE’s products and its emphasis on vertical integration and capacity planning.

GE’s Profile

The General Electric Company, or GE, is a diversified company that offers
infostructure, media and finance products and services. The company was
originally founded by electrical innovator Thomas Edison. It is also listed as one
of the most admired companies, ranking as number one in electronics and 16th
overall according to Fortune Magazine. For the company's innovation focus, it was ranked as one of the world's most innovative companies by Business Week.

GE’s Reach

The General Electric Company is organized into 5 divisions including
“’NBC Universal", "Technology Infrastructure", "Consumer & Industrial", "Energy
Infrastructure" and "Capital Finance". The company functions in over 100
countries and has over 300,000 employees. For 2009, the company achieved
$11.2 billion in earnings and an industrial cash flow of $16.6 billion. Effective
January 1, 2011, it reorganized the Technology Infrastructure segment into three
segments: Aviation, Healthcare and Transportation.

Services

Chemicals, Petrochemicals, and Fertilizers
Food & Beverage
Government & Public Administration
Metals and Metals Fabrication
Mining (Coal, Minerals, Metals)
Oil & Gas Upstream
Power Generation

GE. (2013). The History of General Electric. Retrieved from http://www.ge.com/about-us/history/1878-1904.

GE. (2013). GE fact sheet. Retrieved from http://www.ge.com/pdf/news/GE-Fact-Sheet.pdf

Using the information above, the module readings, Argosy University online library resources, and the Internet, respond to the following:

How does GE’s framework give it the opportunity to be at the forefront of the markets in which it participates?

Examine your own firm or a firm you would like to work for in the light of GE’s framework and respond to the following:

Does this firm have the means to execute like GE?

Which type of resources would the firm require?

How could GE’s lessons be applied to this firm?

Write your initial response in 300–500 words. Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation

Explanation / Answer

1.     How does GE’s framework give it the opportunity to be at the forefront of the markets in which it participates?

Answer – GE’s strategy was that the GE should be at the first or second position in the market, in the individual business which GE is engaged. If GE is not able to achieve these positions, then GE should leave that business. GE is not ready to accept the rating other than first and second rating. This strategy develops the framework for the GE to perform well in the business they are participating. This helps the GE to drive to achieve these positions only. This strategy drives the GE’s team to achieve the desired position only.

2.     Examine your own firm or a firm you would like to work for in the light of GE’s framework and respond to the following:

·       Does this firm have the means to execute like GE?

·       Which type of resources would the firm require?

·       How could GE’s lessons be applied to this firm?

Answer – The similar firm I have seen in India is the Reliance Group of Industries.

This firm’s framework looks to be in similar nature of GE’s framework. The Reliance group always seems to be at top rating in any of the business they are participating.

a)     Yes, this firm has a means to execute like GE, Because Reliance is at top rating in any business they are executing/ participating. We have seen the growth or entry of reliance in any sector. They achieve the top position immediately. Reliance’s strategy is to achieve the top position by cost competitive and quality standards in the business stream.

Now in India, the Reliance group dominates in all the businesses they are operating and they have developed the high standards of their business. Reliance group is well known group in the India market and has achieved the top positions in the India market.

b)     The firm requires the resources which are capable of producing the desired results as per the strategy of Reliance group. The Reliance group expects the resources to be committed to achieve the desired result. The resource competency is the key for achievement of the competent results. The Reliance group needs the resources which are competent, diverse, experienced and energetic for the business run.

c)     The GE’s lesson can be applied to Reliance group as well, because both look to be in similar strategy. The strategy of GE is that they drive to achieve the first or second position in any business they are participating, without this position, GE do not wish to do business. Similarly the Reliance group is also in similar strategy and they also drive to the top position in any business they are operating. Hence Reliance group can also have similar strategy that they will do the business only if they are at top first or second position only. Without this top position, Reliance group will not willing to do the business. This strategy will help the Reliance group further.

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