Case Analysis of “Ge’s Growth Strategy: the Immelt Initiative
Subject: Case analysis of “GE’s Growth Strategy: The Immelt Initiative” Prior to year 2010, GE’s previous CEO, Jack Welch, had built GE into a highly disciplined, extremely efficient machine that delivered consistent growth in sales and earnings. However, after Immelt took over GE from Welch, Immelt recognized the necessity for strategic change in the GE when he took considering the situation of economic downturn. 9/11issue and Enron Scandal triggered a downturn in the economy, which in turn affected GE’s stock market price.
Immelt saw little need to challenge the basic business model no which GE had operated for decades. With commitment that a portfolio of strong businesses is company’s competitive advantage according to company’s past success, Immelt declared to take company into a vision of global, technology-based, service-intensive company. He defined five key elements to achieve his goal: technical leadership, services acceleration, and commercial excellence, globalization, and growth platforms.
Immelt believed that investing heavily during the economic downturn was important to accomplish GE’s long-term growth. He invested heavily to build new R&D facilities, and made several acquisitions, such as Interlogix security system, BetzDearborn which is a water service provider.
Immlet also sale some of GE’s underperforming business to improve cash flow. He hoped to create a more open and less hard-edged environment within company by renewing focus on social responsibility and creating corporate citizenship.
His effort on rebalancing the portfolio was to acquire Vivendi-Universal Entertainment and British life-science Company. By focusing on customers, Immlet emphasized on service which in turn results to less attention on internal processes. GE also identifies six business growth platforms to driving Growth. To training GE’s traditional managers to be qualified HR developed new career paths and five action-oriented leadership traits for managers.
Immelt encountered challenges to go forward, and have difficulty to keep momentum that his moves generated.
Immlet, during the financial crisis, had made unfavorable decisions such as selling GE’s undeforming business for cash flow. Although the cash flow increase at that time, GE actually had narrowed its businesses field it exists. It made GE with lower growth rate and less diversified. I think Immelt should enabling the sustainable growth and have a stable internal process within the corporation because when Immelt took actions to change GE business models, company still need time to adapt to it.
