ge

General Electric : 

General Electric 1

"I never perfected an invention that I did not think about in terms of service it might give others"- Thomas Alva Edison, GE Founder : 

"I never perfected an invention that I did not think about in terms of service it might give others"- Thomas Alva Edison, GE Founder It all started with the flicker of a light bulb and soon enough GE was off and running… In 1890, Thomas Alva Edison established the Edison General Electric Company in Menlo Park, New Jersey At the same time Charles A. Coffin was growing his business, The Thompson Company It was increasingly difficult for Edison and Coffin to remain competitive based their own technologies The two companies united in 1892 and formed The General Electric Company 2

Key Facts About GE : 

Key Facts About GE Headquarters Fairfield, Connecticut Number of Employees Over 315,000 Locations Over 160 Countries Symbol on Stock Exchange GE Number of Shareholders 4 Million Number of Shares Outstanding 10 Million Historical Number of Share Splits 9 3

Annual Revenue From 1994- 2010 : 

Annual Revenue From 1994- 2010 4

GE Stock Price Relative From 1999-2010 : 

GE Stock Price Relative From 1999-2010 5

Reginald H. Jones : 

Reginald H. Jones Chairman & CEO, 1972 – 1981 Managerial qualities: ‘Intellectual breadth, strategic capability, social sensitivity, political sophistication, world-mindedness, and above all, a capacity to keep their poise amid the cross-currents of change.’ Relationship between business and government Today…GE spends 7.5MM on lobbying 6

Jack F. Welch Jr. : 

Jack F. Welch Jr. Chairman & CEO, 1981 – 2001 On Six Sigma Welsh said, “...it is the way we work.” Customer-Focused Methodology to Improve Quality Through Defect Reduction Today…Rigorous Employee 6σ Certification 7

Jeffrey R. Immelt : 

Jeffrey R. Immelt Chairman of the Board and Chief Executive Officer, 2001 – Present Today… New Frontiers & Strategic Alliances for GE NBC-Universal acquiring interest in Telemundo network GE and Honda form GE Honda Aero Engines LLC, design small (private) jet engines 8

GE is Organized Along 11 Businesses : 

GE is Organized Along 11 Businesses 9

Growth vs. Cash Generator : 

Growth vs. Cash Generator 10

Perceived Drivers for Change : 

Perceived Drivers for Change Globalization Technology Innovation Diffusion of technological know-how Regulatory influences and government policy changes 11

Four Values Translates Into Action : 

Four Values Translates Into Action 12

Action At Work: Six Sigma Product Standard : 

Action At Work: Six Sigma Product Standard Must produce no more than 3.4 defects per million opportunities. An "opportunity" is defined as a chance for nonconformance, or not meeting the required specifications; GE strives to be flawless in executing their key processes. 6 Key Areas Critical to Quality Defect Process Capability Variation Stable Operations Design for Six Sigma 13

Four Objectives of Work Out Meetings : 

Four Objectives of Work Out Meetings Create a New Paradigm for GE Empower Employees Eliminate Unnecessary Work Build Trust 14

Action Fosters Business-Wide and Personal Growth : 

Action Fosters Business-Wide and Personal Growth Toastmasters is an international organization dedicated to improve/ facilitate communication within an organization 4 Goals of Sessions Deliver great presentations Easily lead teams and conduct meetings Give and receive constructive evaluations Be a better listener 15

The $1Billion GE Talent Factory : 

The $1Billion GE Talent Factory Program began in 1919—oldest training program of its kind Engineering Finance Info Management Operations Sales and Marketing Several assignments within discipline Acquire broad overview of GE Develop leadership/ professional skills 16

The Ultimate Driving Machine… Just Got Better : 

The Ultimate Driving Machine… Just Got Better GE’s Advanced Materials has teamed up with BMW to design and produce lightweight, durable, chip resistant fenders for their high performance 6 Series 17

GE’s Financial Statements : 

GE’s Financial Statements 18

Revenue By Operating Segment : 

Revenue By Operating Segment 19

GE’s Revenue Breakdown in 2009 : 

GE’s Revenue Breakdown in 2009 20

Revenue Growth 2006-2009 : 

Revenue Growth 2006-2009 **Values in millions of dollars 21

Profit By Operating Segment : 

Profit By Operating Segment 22

Net Earnings Growth 2007-2009 : 

Net Earnings Growth 2007-2009 **Values in millions of dollars 23

Ratio Analysis : 

Ratio Analysis 24

Finances, GE, and its Competitors : 

Finances, GE, and its Competitors 25

Competitors of GE : 

Competitors of GE 26

Main Competitors : 

Main Competitors ALSTOM specialize in energy, ship buildings and marine systems and transport infrastructure. Headquarters in Paris, France Acquired ABB (Asea Brown Boveri, a leading competitor to GE) A force to be reckon with; would be GE’s ultimate competitor 27

Main Competitors : 

Main Competitors Siemens electronics and electrical engineering company 6 groups:- Automation and Control, Information and Communications, Medical, Power, Transportation, and Lighting provides industrial automation and control, information and communications, lighting, medical, power transmission, and transportation products and services Headquarters in Munich, Germany Subsidiaries headquartered in New York Very similar to GE; strong brand name equity, has business operations in over 190 countries 28

5 Forces Model : 

5 Forces Model Rivalry among competitors ALSTOM and Siemens, in particular Creating competitive advantages to gain bigger market share Acquisitions, mergers and joint-ventures Battle for innovation and technological improvements 29

5 Forces Model : 

5 Forces Model Potential of New Entrants Adaptac (1981) and Adept Technology (1983) Late bloomers, but slowly gaining market share Does not pose too much of a threat to GE, ALSTOM or Siemens for now Tough for new entrants to pinch a sizable chunk of market share from GE, ALSTOM or Siemens 30

5 Forces Model : 

5 Forces Model Suppliers Materials, parts, components, other resources Vertically integrated (GE Advanced Plastics, GE Consumer and Industrial Manufacturing) Has to be aware of suppliers that might integrate forward 31

5 Forces Model : 

5 Forces Model Substitutes Has many substitutes that might pose a threat Very well-diversified which means that GE is spreading the risk of failure in every market Eg. GE’s NBC-Universal’s substitute are pirated VCD’s or DVD’s Buyers Similar to its substitutes, GE has a broad line of buyers, ranging from consumers to large corporations Eg. GE Healthcare’s buyers are hospitals and pharmacies. 32

Strategic Group Map : 

Strategic Group Map 33

Slide 34: 

Product Range Performance/Product Quality 34

GE’s SWOT Analysis : 

GE’s SWOT Analysis Strengths Global strength and recognition 5th in Fortune 500 list, operating in more than 160 countries Excellent management Proven leadership and business model Confident investors – raising capital Diverse product range Long Term (GE Aircraft engines) Short Term (GE Lighting, Plastics, NBC) Financial Services (contributes to 40% of GE’s revenue) Spreading the risk of failure in every market and not just one 35

SWOT Analysis : 

SWOT Analysis Weaknesses Company size/ acquisition restriction Eg. GE’s planned acquisition of Honeywell International, a diversified technology and manufacturing company, specializing in aerospace products, was rejected by the EU Energy Segment Underperforming, no signs of near future recovery Flexibility Large and diverse businesses might overstretch the company and reduce reaction times to shifts in targeted markets 36

SWOT Analysis : 

SWOT Analysis Opportunities Research and Development Immense capital allows GE to contribute a lot to R&D for product development and improvement Increased geographic growth Global expansion = more opportunities (Eg. China) Merger between NBC and Vivendi Further opportunities in the media business Improved customer services Adopted a new customer focus initiative 37

SWOT Analysis : 

SWOT Analysis Threats Exposure to global economy Economy slowdown would affect GE, since 40% of the revenue is generated overseas Exposed to currency fluctuations Intense scrutiny after Enron More transparency and disclosure; skeptical investors Public image of all large companies suffered Competition Constant change in technology heats up competition Very diverse:- tough to be the best in all industry 38

Slide 39: 

39

Key Competencies : 

Key Competencies Competence Great and proven leaders Eg. Jeffrey R Immelt, Jack Welsh, Reginald H. Jones Expertise More capital can be invested in R&D Core Competence Innovative Desire to strive for perfection (6 Sigma) 40

Key Competencies : 

Key Competencies Distinctive Competence Ability to respond to the drivers of change by understanding the important global trends Acquisition of rivals and other companies 41

Recent News : 

Recent News GE’s $1200 million acquisition of InVision Technologies March 15, 2009, GE made it public September 16, 2009, FTC gave approval but deal is still not finalize 42

Recent News : 

Recent News Advertising Campaign Genworth, a financial company part of GE, has signed a 5 year contract to license the GE logo and use the slogan, “Built on GE heritage” Genworth is planning to allocate $30 million into advertising this coming year 43

Recent News : 

Recent News October 11, 2004, Senate passed a $136 billion corporate tax package that cuts taxes for businesses Includes $76.5 billion in new tax relief for the manufacturing sector Includes $42.6 billion in tax relief for multinational companies Additional capital from the tax break could be used for reinvestment, increase dividends, etc 44

Slide 45: 

Strengths  Reported by Forbes as the largest company of 2009. The company has 3 23,000 employees. The company deal with huge number of products which include Genie, Aviation, Jet engines, Electricity, Entertainment, Finance, Gas, turbines, Generation, Industrial Automation, Lighting, Medical imaging equipment, Medical technology, Health informatics, Electric motors, Locomotives, Wind turbines, TV and motion pictures. GE has total asset of worth US$ 797.769 billion as per Company 2008 Balance Sheet. 45

Slide 46: 

The company made number of acquisition in previous few years. Enjoying high revenues and profits. GE is the fourth most recognized brand in the world. The ge.com is the 20th domain to have been registered on August 5th 1986. It has four divisions namely GE Energy Infrastructure, GE Technology Infrastructure, GE Capital, and NBC Universal. GE ranked ninth on Fortune Magazine’s “50 Most Desirable MBA Employers” list. Excellent Research and development department. Operating in 160 countries Diverse product range 46

Slide 47: 

Opportunities      Research and development     Opportunity to invade china market.     Mergers with companies     Reduce pollution     Improve customer service     Aviation industry growth 47

Slide 48: 

Weaknesses   GE is the 4th largest producer of air and water pollution.  GE was charged by department of defense on corrupt practices for Jet Engines sales to Israel.    In past misleading investors for high returns.    Performing not very well in Asian markets.    GE energy segment is under performing 48

Slide 49: 

Threats  Currency fluctuations. Intense competition in the industry Recession in majority of countries. Government regulation on environmental concerns. Exposure to financial markets 49

Conclusion : 

Conclusion GE recognizes that part of being successful and well-respected is being socially responsible as well Has huge potential to remain successful without any major threats from competitors “Staying Power” Will only continue to expand 50

Questions and Answers Session : 

Questions and Answers Session 51