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GENERAL ELECTRIC TABLE OF CONTENTS TABLE OF CONTENTS 2 INTRODUCTION TO GENERAL ELECTRIC (GE) 3 THE GE APPROACH 3 GE: A HISTORY OF INVENTION 3 GE STRUCTURE 3 Figure 1: General Electric’s Operations Chart 4 GE PROFITABILITY 4 Figure 2: GE Stock Performance for the Past Year. Status as of May 24, 2002 5 GE VALUES 5 INDUSTRY ENVIRONMENT 6 CORPORATE STRATEGY 7 GE STRATEGY INTO THE FUTURE 7 CRITIQUE OF CORPORATE STRATEGY 8 ENVIRONMENTAL STRATEGY 8 CRITIQUE OF ENVIRONMENTAL STRTEGY 10 RECOMMENDATIONS 10 REFERENCES AND ACKNOWLEDGEMENTS 13 Works Cited 13 Websites 13 References 13 ACKNOWLEDGEMENTS 13 INTRODUCTION TO GENERAL ELECTRIC (GE) THE GE APPROACH GE believes that through the power of the ideas of its employees, it is able to remain a successful international company, aimed at being a leader in each of its diversified service and product lines. Through innovation and technologically advanced products and services generated in GE’s Global Research Center, GE envisions a limitless future. Since Set.7, 2001, GE has been under the leadership of CEO and chairman Jeffrey R. Immelt. GE operates in over 100 countries and employs 313,000 people. GE: A HISTORY OF INVENTION In 1879, Edison invented the first filament light bulb, which was patented in the following year allowing the creation of the Edison General Electric Company. In 1892, a merger between the Edison Electric Company and the Thomson-Houston Company formed General Electric. Invention continues the drive the company forward starting with electric toaster and fans, electric locomotives in 1908, into every imaginable household appliance, plastics and rubbers, fiber optics, a consumer’s television channel, aircraft engines, and state of the art medical technology. GE STRUCTURE As a large multinational company, GE is divided into three sections; long cycle businesses, short-cycle businesses and financial services businesses. Long cycle businesses focus on global infrastructure, holding a strong position in technology and service markets. Long cycle businesses include GE Power Systems, GE Medical Systems, GE Aircraft Engines, and GE Transportation Systems. Short cycle businesses focus on consumer and industrial market that are more subject to the economic vigor of the market. Short cycle businesses include GE Appliances, GE Lighting, GE Plastics, GE Industrial Systems, GE Specialty Materials, and NBC. Financial services businesses center around five separate areas of services. These consist of Consumer services through GE Financial Assurance, Global Consumer Finance, and Card Services, mid-market financing via Vendor Financial Services, Commercial Equipment Financing and Commercial Finance, and Specialized Financing through the Structured Finance Group, and Real Estate. Equipment Management is composed of Transport international pool, Penske Truck Lease, Fleet Services, Modular Space, and Aviation Services. Specialty Insurance is divided into Employers Reinsurance Corporation and Mortgage Insurance. Figure 1 below graphically represents GE operations. Each of the three broad divisions of GE contributed significantly to net earnings in 2001. Long-cycle businesses added around 40%, short cycle approximately 20% and financial services, 40%. Figure 1: General Electric’s Operations Chart GE PROFITABILITY GE has been repeatedly celebrated as a company with consistent financial success. For example, it has been at the top of Fortune magazines Most Admired Company list for the past five years in a row. Financial targets are set for each division every three years, and refined at the two-year point. Additional reviews of financial progress are conducted six times per year. With a highly diversified portfolio of divisions, it is possible to balance out losses in one area by increasing pressures on other sections and create value for investors. The 2001 revenues were $125.9 billion, with net earnings of $14.1 billion. Assets currently total $2.3 billion. Stocks prices have been in steady decline in the past year, with additional challenges added by the September 11 incident. Figure 2 shows the general trend (Bigchart.com). Figure 2: GE Stock Performance for the Past Year. Status as of May 24, 2002 GE VALUES According to the 2001 Annual Report, GE has three traditions that it adheres to, being integrity, commitment to performance and thirst for change. More specifically, the following points outline the GE value priorities: · Passion for Our Customers Measuring our success by that of our customers… always driven by Six Sigma quality and a spirit of innovation · Meritocracy Creating opportunities for the best people from around the world to grow and live their dreams · Growth Driven, Globally Oriented Growing our people, markets and businesses around the world · Every Person, Every Idea Counts Respecting the individual and valuing the contributions of each employee · Playing Offense Using the advantages of size to take risks and try new things… never allowing size to be a disadvantage · Embracing Speed and Excellence Using the benefits of a digital age to accelerate our success and build a faster and smarter GE · Living the Hallmarks of GE Leadership Passion for learning and sharing ideas Committed to delivering results in every environment Ability to energize and inspire diverse global teams Connected to workplace, customers and communities… in touch with the world Most points are self explanatory, with the exception of commitment to the Six Sigma. Six Sigma is a disciplined approach to assist in focusing on achieving very few “defects” in services and products, where a defect is failing to deliver what the consumer wants. By systematically considering products and services from the perspective of a client, all employees can theoretically be more responsible for meeting customer expectations with consistency and quality. INDUSTRY ENVIRONMENT GE operates within several technology and service oriented industries. Therefore, to assess its competitive environment, some generalizations must be made. Companies which have similarly diverse product lines also characterized by technological ingenuity include Alstom of France, which produces trains, boats, turbines and generators, operating in 70 countries, the CIT group of commercial financial services serving 20 countries and Siemens, which deals in electronics, medical supplies, lighting, transportation sector, semiconductors etc.
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