General Electric Case Study

General Electric Case Study

Question One

General Electric, or GE, is an American multinational conglomerate corporation operating through five segments: Energy, Technology Infrastructure, Capital Finance and Consumer & Industrial. GE’s mission has been to provide shareholder value and growth as a dominating market leader, innovator, and driver in all its diverse business segments. GE values designing and producing quality products for customers based on customer stated needs, producing the highest quality product in each product segment, leading the industry in product offerings meeting customer needs, and achieving individual product and corporate market share dominance.

GE’s marketing strategy has been to build market share in the products of its diverse business units. Solving the issue of flattening sales from 1981 to 1985 with net profit growth of 41% through price increases and cost reductions, GE at the time of this case was at a market maturity and shrinkage that threatened profitability. In 1986, GE’s Aircraft Engine Business Group (AEBG) was one of GE’s largest business units representing approximately 16 percent of sales and earnings in 1985 and was highly profitable with compound annual growth rate of 12% compared to overall corporate rate of 1.5 percent per year. What had been fueling company and AEBG unit growth of and profitability was becoming an unlikely to be successful strategy for the later 1980’s and continuing into the 1990’s. AEBG was in the position of being forced to determine a new strategy for market share maintenance and growth, in an industry and product that is unforgiving of costly miscalculations, and highly rewarding of successful risk taking.

When Jack Welch became the CEO of General Electric Company in 1981, he followed “company man,” CEO Reginald Jones, who had started his career at GE in 1939, and ran it with a formal style and bureaucratic structure focused on global expansion, dramatically increasing sales...