Ge Imagination

Case Overview

• GE is an advanced technology, services, and finance company. Under new CEO Jeff Immelt, the company is trying to take a new organic growth approach to expand company and increase shareholder value

• Sometimes large established companies like GE must encourage innovation and risk in order to transform their capabilities

• Jeff Immelt challenged the business leaders at GE to come up with "Imagination Breakthroughs,“

o These are innovative new projects that would serve as the centerpiece of GE's organic growth initiative

o They are new projects with potential for $100M+ in revenues within 2-3 years

o What this case is about primarily is the Evo Project: EVO stands for evolution locomotive

o This is a state of the art locomotive that eliminates trade-off between fuel efficiency and emission

• Issue: A spin-off the original Evo locomotive called the Hybrid locomotive, which was an Imagination breakthrough project is at a crossing and the company is struggling with it. Transportation committee must decide- Should the project continue or be shelved?

Welch vs. Immelt

• Immelt Repositioned the business portfolio from a Process-Oriented company under the leadership of Jack Welch to a Marketing-Oriented company

What were Immelt’s Goals?

• What is organic growth? Organic growth is growth that comes from a company's existing businesses, as opposed to growth that comes from buying new businesses/M&A

• Organic growth causes higher revenues (more global), lower G&A expenses as a percentage of sales, higher marketing and R&D expenses, and typically higher margins because of better flow from new products and services.

• Commercially oriented global expansion

o Taking advantage of emerging markets—had China effect, due to increased trade with china, there was a need for increased transportation.

o China and Kazakhstan used as convenient market entry to other parts of GE business, introducing other products and svcs the company has to...