- Get Free Essays and Term Papers

Jeff Immelt and the New General Electric

Autor:   •  February 22, 2019  •  3,568 Words (15 Pages)  •  152 Views

Page 1 of 15


But, being a second-generation GE, he was well aware of the culture of GE and that had helped him to perform exceedingly well during his previous positions in GE. In fact, he had built a reputation of a turnaround specialist for himself (Jack Welch and the GE Way, 2003).

When he took over from Welch as the CEO, the upheavals in the business world had caused slowdown in the economic growth and there was a crisis of confidence among the investors (General Electric: life after Jack, 2005). Under his leadership, the strategy of GE shifted from earlier focus on cost cutting to focusing on new products, services and markets. Organic growth, customer focus and innovation were the focal points of his redirected strategy for GE. In 2002, he aimed for an organic growth of 8%; from 5% during Welch’s tenure (Justin Fox, 2002). A number of opportunities were identified for this organic growth including the ageing population, the demand for energy, necessity for high-tech infrastructure and growth in emerging markets. His strategies were primarily focussed upon creating a diversified portfolio of business which would serve as a source of stability for them (Jeff Immelt and the New General Electric, 2015).

Jeff Immelt’s redirection strategy was built upon creating additional value for its customers using GE’s core competencies in the field of advanced technology and associated services by delivering highly customized products and services to its customers in the growth markets. They worked towards creating new ‘Growth Platforms’ which can either be extension of their on-going businesses or venturing into new business domain. Identification of growth platforms was followed by strategic acquisitions and even divestments in high growth potential sectors. Technology was the key driver in consideration for GE’s future growth and served as an essential component to successful production innovation, process improvements and quality enhancement. General Electric, under the leadership of Jeff Immelt, expanded their R&D and also supported it with required financial assistance.

Another focal point in Immelt’s strategy for GE was their decision to be customer centric and their successful implementation of various customer focussed initiatives. This is what helped in reinvigorating their marketing function which was brought about by creating GE’s Commercial Council accompanied with other customer oriented programs. He focussed on value creation for the customers by trying and exploit linkages across various GE’s business units. This corporate wide linking was visible in their product bundling and cross selling strategies which later lead to enterprise selling. Identifying customers that would be seeking for GE’s broad product portfolio and catering to them with highly customized products was one of the important strategic initiatives of GE under Jeff. They tried and achieve differential advantage using innovative product-service bundling and customer centred initiatives.

Another important strategic move undertaken by Jeff Immelt was to discredit the famous obsession of corporates to work for shareholder value maximisation. He was of the opinion that his task was not to focus on managing the stock price of the firm but rather focus on achieving long-term growth, which if achieved successfully, would automatically take care of the stock price growth aligning itself with shareholder’s goals and objectives.

These were a few strategic initiatives through which Jeff Immelt redirected GEs strategy to drive company towards growth and success during his tenure as CEO.

[pic 3]

Fig: GE Strategy – Focussing on growth market capabilities and services in addition to their prior focus on low cost and speed (General Electric Company – Our Strategy, 2014)

PART II (A): Analysing how Jeff Immelt’s redirection strategy for GE was in alignment with the dynamic business requirements of the 21st Century

When Jeff Immelt replaced Jack Welch as the CEO of GE in 2001, the market had started to mark an end of era which was marked with increased optimism and period of rapid business growth, and had started to move towards a downturn. The shift in the business environment and the related economic instability was a worrisome issue for Immelt and GE, where he had to work in identifying the likely avenues for future profits. Under his predecessor Welch, the strategy of value creation using the strategy of cost reduction and disinvesting non-performing assets had been completely utilized (Charan, 1989).

The six important pillars of a successful 21st century business which included Relentless Innovation, a definitive purpose, dynamic leadership, passion for growth, customer orientation and breakthrough performance management (Yeramyan & Pontish, 2014) were aptly displayed in Immelt’s redirection strategy.

In the present market scenario, he had to focus on organic growth as the primary growth driver. With the world economy and the businesses struggling and going through a period of decline, the main challenge was identifying promising avenues for sustained profitable growth. Through his leadership skills and experience, he was able to figure out significant global trends that might help GE with their organic growth strategy. Some of these trends included the world’s aging population and hence their needs for healthcare services, world quest for alternative energy sources led by environmental concerns like global warming and most importantly figuring out new growth opportunities in world’s emerging markets (Jeffery Immelt, 2009).

In this dynamic business environment, it was required for GE to exit from slow growing businesses and reallocate those resources to future growth aspects realized on the basis of above identified global trends. This reallocation of resources should take into consideration four important criteria namely rationale of allocation, formation, structural preferences and the performance potential of the new business opportunity (T.K.Das, 2000). The central core of Immelt’s strategy was new ‘Growth Platforms’ which can either be an extension of their existing business units or entirely new business domains.

Within this dynamic changing business environment of the 21st century, another major change was the changing needs and wants of the customers and their product requirements. Immelt understood this from his years of experience and implemented this as a core idea in GE’s philosophy and working (Avolio, 2013). One of the outcome of their enhanced customer-centred working was their increased ability to foresee and meet customer needs by bundling their products with technical and


Download:   txt (24 Kb)   pdf (73.2 Kb)   docx (18.8 Kb)  
Continue for 14 more pages »
Only available on