General Electric Case Study: Leadership and Strategic Options

This case study examines General Electric (GE), a multinational conglomerate. It begins with an introduction to GE, its diverse segments, and its ranking among the largest firms in America. The study then delves into GE's core competencies and capabilities, including new product development, excellence, human resource management, and diversification, as well as leadership, workforce collaboration, research and development, and customer value. The VRIO framework and value chain analysis model are utilized to analyze these competencies. The case study further explores GE's strategic options for the next five years, using SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Finally, it compares the management approaches of former CEO Jack Welch and current CEO Jeffrey Immelt, offering insights for future strategic direction.

Running head: CASE STUDY OF GE
General Electric Case Study
Name of the Student
Name of the University
Author’s Note:

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CASE STUDY OF GE
Table of Contents
1. Introduction............................................................................................................................2
2. GE – Core Competencies and Capabilities............................................................................2
3. GE – Strategic Options over Next Five Years.......................................................................8
4. Jack Welch or Jeffrey Immelt? A Management Approach Perspective..............................16
5. Conclusion............................................................................................................................17
References................................................................................................................................18
Appendices...............................................................................................................................21

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1. Introduction
GE or General Electric is the most popular multinational corporation of America that
has its headquarters in Boston, Massachusetts. The incorporation of this particular
conglomerate corporation is in New York (Ge.com. 2018). The organization has various
segments that include Energy Connections, Power, Global Research, Aviation,
Transportation, Current, Renewable Energy, Oil and Gas, Healthcare, Capital and Lighting.
All the above mentioned segments of General Electric serves the requirements of
Pharmaceutical, Services of finance, Software Development, Medical devices, Engineering
industries, Life Sciences and Automotive industries (Ge.com. 2018). In the year 2017, the
organization of General Electric was ranked thirteenth in the list of the largest firms of
America in terms of gross revenue.
The following report outlines a brief description on the case study of General Electric.
The report discusses and also analyses on the several major capabilities and competencies of
this particular organization (Gamondi, Larkin and Payne 2013). These core competencies
would be extremely important for General Electric. These capabilities and competencies
would be discussed on the success story of the organization until the year of 2012. Moreover,
the various strategic options of General Electric in the next five years will also be mentioned
here (Espinoza and Ukleja 2016). The final part of the report explains about the management
approach between the previous and the current Chief Executive Officers of this organization
and helps to choose the best alternative that is to followed by General Electric for the
betterment of the organization.

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2. GE – Core Competencies and Capabilities
The core competencies of an organization can be defined as the specific concepts in
management that has a unique combination of several skills and resources for distinguishing
the position of a firm in market (Walsh et al. 2012). The core competencies of any
organization help to obtain competitive advantages. There are three distinct criteria for the
fulfilment of core competencies. They are as follows:
i) The core competencies help to provide proper potential access to the broad range of
markets (Calzada, Prado and Marzal 2013).
ii) The core competencies always make the most important contribution to all the
advantages of a product.
iii) The third criterion for the core competencies is the difficulty in imitating by all the
competitors.
The core competencies help to deliver added values to the specific clients. These are
resulted from a particular set of tools, techniques and skills of production (Davis 2014).
These competencies are always developed from the procedure of constant improvisations
with the time period instead of one big alteration. The utilization and the proper
understanding of the entire conceptualization of the core competencies are extremely
important and beneficial for the organizations (Drucker 2017). The organizations utilize these
core competencies for excelling at their use of knowledge and skills for the creation of
anything effective. Furthermore, the proper values of stakeholders and clients are also raised
with the help of the core competencies. The examples of core competencies are specialized
skills, techniques and even knowledge. The core capability of an organization is the proper
ability of management for the development of the core competencies (Légaré et al. 2013).
The new businesses or the basic products are also developed with the help of core capability.

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For the organization of General Electric, there are various core competencies and core
capabilities. The core competencies of General Electric are as follows:
i) Development of New Products: This is the most significant and important core
competency of General Electric. They have the skills or knowledge to develop new products
for their clients (World Health Organization 2012). This regular and periodical development
of all the new products has made the organization of General Electric to reach their
organizational goals and objectives. They have become the largest organization of
conglomerate corporations in the United States of America (Karger and Stoesz 2013). There
is a vast increment in their market position due to this development of the new products.
ii) Excellence and Performance: The second most important core competency of
General Electric is the excellence and performance (Singh 2012). Their performance is
extremely good and can also be claimed as the best in comparison to other conglomerate
organizations of the United States of America.
iii) Management of Human Resources: The human resource department of the
organization of General Electric is manages perfectly by the management team of the
organization (Bucur 2013). This management is extremely important and significant for the
organization as human resources is responsible for the entire growth and skills of any
organization.
iv) Diversification: The diversification and the requirement of new alterations or
changes within the organization of General Electric is the fourth core competency of this
particular organization (Calzada, Prado and Marzal 2013). The constant changes for the
betterment of the products have made the organization extremely popular and recognized by
all.

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The core capabilities of General Electric are as follows:
i) Leadership: This is the most significant capability of General Electric (Drucker
2017). They have the unique quality of leadership and thus they are leading the entire market
of conglomerate organizations.
ii) Collaboration of Workforce: The second important capability of General Electric
is the collaboration of workforce (Hitt, Ireland and Hoskisson 2012). All the employees and
the staffs of the organization work together and thus the organizational goals and objectives
are obtained easily and smoothly.
iii) Research and Development: The third significant capability of General Electric is
the research and development (Hill, Jones and Schilling 2014). They have the unique
capability of researching and developing innovative and new products for their business.
iv) Customer Value: The fourth core capability of General Electric is the customer
value. The showing of their values to their customers had brought excellent solutions to their
problems.
The current and the former CEOs i.e. Jack Welch or Jeffrey Immelt have succeeded in
their leadership roles and responsibilities for the organization of General Electric (Peppard
and Ward 2016). All the above mentioned core capabilities and competencies for GE can be
explained with the help of VRIO Framework.

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Figure 1: VRIO Framework for the Analysis of General Electric
(Source: Peppard and Ward 2016)
The VRIO framework or the Valuable, Rare, Difficulty in imitation and Support by
Organization framework helps to understand the overall competencies and capabilities of an
organization (Calzada, Prado and Marzal 2013). The competitive implications of this
organization help in understanding the competitive advantages and disadvantages. These
competitive advantages of General Electric are extremely important for the organization.
Moreover, the competitive disadvantages help to understand the overall weaknesses of the
organization (Peppard and Ward 2016). The major competencies of General Electric have
always been the innovation and the significant quality research and development by the
diversification in the products and the management of their human resources. The
management of employees is generally done with the help of motivation and encouragement.
Furthermore, they are provided with relevant opportunities that could be extremely helpful
for the integration of customer solutions (Eden and Ackermann 2013). As General Electric
has various segments and healthcare is the most important segment of this organization, the

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management of this segment is highly required. This can be done by the proper utilization of
expertise, skills and knowledge of all the personnel of General Electric.
Apart from the VRIO framework, the value chain analysis model can also explain the
competencies and capabilities of General Electric (Wheelen and Hunger 2017). This value
chain analysis model is a specific strategic tool that is utilized for the analysis of all the
internal activities of an organization.
Figure 2: Value Chain Analysis of General Electric
(Source: Lasserre 2012)
The main objective of this particular strategic tool is the recognition of all the
valuable and important activities of that particular organization. It provides competitive
advantages to the organization. GE has various activities and can be explained with the help
of this value chain analysis model (Lasserre 2012). The primary activities of the General
Electric mainly include research and development, product development, marketing and
sales, operations, logistics and the customer services. The support or the secondary activities

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of General Electric are the organizational infrastructure, human resources management,
procurement and technology.
Thus, it can be concluded that the VRIO framework and the value chain analysis
model has recognized all the competencies and capabilities of the General Electric and these
competencies would be helping the organization to obtain organizational goals and
objectives.
3. GE – Strategic Options over Next Five Years
General Electric should implement and adapt various new strategies for their business
in the next five years. These strategies would be extremely important and significant for
General Electric in reaching to the leading position in market (Rothaermel 2015). The
implementation of these strategies should be done with proper guidance and care. The
selection of the strategies should be done perfectly. There are various strategic tools for
General Electric. One of the most effective strategic options for GE is SWOT analysis. The
SWOT analysis of any organization helps to understand the strengths, weaknesses,
opportunities and threats involved in particular activity of business (Keupp, Palmié and
Gassmann 2012). This SWOT analysis is the simplest and widely utilized technique, which
starts with the definition of the objective of any particular business activity or project and
gradually identifies the several external and internal factors to achieve the objective. The
strengths and the weaknesses of an organization is considered as the internal factors, whereas
the opportunities and the threats are considered as the external factors of that organization
(Eden and Ackermann 2013). The SWOT analysis is usually carried out by all organizations,
products, industries or places.

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i) Strengths: The features or the business characteristics, which provides competitive
advantages to the business over all others, are called strengths (Goetsch and Davis 2014). The
strong characteristics are known as strengths of that particular organization.
ii) Weaknesses: The features or the business characteristics, which provides
competitive disadvantages to the business over all others, are called weaknesses of that
business (Weiss 2014). The weak characteristics are known as the weaknesses of an
organization.
iii) Opportunities: The elements in an environment, which an organization can easily
utilize for gaining competitive advantages, are known as the opportunities of the
organization.
iv) Threats: The elements in an environment, which can easily create big problems in
an organization, are known as the threats of that particular organization.
The organization of General Electric has its own strengths, weaknesses, opportunities
and threats (Egan 2013). The SWOT analysis of General Electric is as follows:

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Figure 3: SWOT Analysis of General Electric
(Source: Lasserre 2012)
The strengths of General Electric are as follows:
i) Global Strength and Recognition: This is the most important strength of General
Electric. This particular organization is globally recognized and popular in comparison to
other conglomerate organizations.
ii) Good Ranking: General Electric was ranked 5th in Fortune 500 list (Mitchell and
Harris 2012). This good raking is again one of the most important strength of this
organization

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iii) Excellent Management: General Electric has the unique feature of managing the
organization perfectly and the management team takes extra for this.
iv) Proven Leadership and Business Models: The fourth strength of General Electric
is their excellent leadership and business models.
v) Diverse Product Range: The other strength of this organization is the diversified
range of products (Michalski 2013). This helps them to seek the attention of the customers
and also the stakeholders.
The weaknesses of General Electric are as follows:
i) Restriction in Company Size: There is a constant restriction or limitation is the size
of the organization of General Electric.
ii) Flexibility: Lack of flexibility is the second weakness of this organization and thus
often suffers from several problems.
iii) Energy Segment Underperforming: The third weakness of this organization is the
underperforming of the energy segment (Peppard and Ward 2016). Therefore, there exists no
signs of future recovery, which can be a major problem for the organization.
iv) Reduction of reaction times due to large business: The fourth weakness of
General Electric is the decrease or reduction of various reaction times to shifts in all the
targeted markets (Rothaermel 2015). This occurs due to the excessive stretching of the
business.
The opportunities of General Electric are as follows:
i) Research and Development: General Electric has significant opportunity in
research and development (Lasserre 2012).

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ii) Increment in Geographical growth: The increment in the geographical growth is
the second opportunity for General Electric as it will enhance more geographical areas.
iii) Improvised customer services: The improved customer services is the third
opportunity of General Electric as this improvisation will attract more customers towards the
organization (Hill, Jones and Schilling 2014).
The threats of General Electric are as follows:
i) Exposure to Global Economy: The most significant threat of General Electric is the
exposure to global economy. This exposure can bring major losses to the organization.
ii) Slowing down of Economy: The slowing down of economy would eventually
affect General Electric as 40% of the total revenue is generated from overseas (Wheelen and
Hunger 2017).
iii) Exposed to Currency Fluctuations: The exposure to the currency fluctuations is
the third threat to General Electric.
iv) More transparency and disclosure: Excessive transparency apparently loses the
confidentially and privacy of an organization (Peppard and Ward 2016). General Electric
should not disclose all of their business activities.
v) Constant technological changes: The regular alteration in technology is the fourth
threat to General Electric as the technical breakdown can bring losses to the organization
(Hitt, Ireland and Hoskisson 2012).
vi) Excess diversification: General Electric is excessive diversified in case of their
products. This diversification may not be accepted by the customers and the organization may
face losses (Rothaermel 2015).

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Apart from the SWOT analysis, the second strategic option that can help General
Electric in the next five years is PEST analysis. This is the scanning of various external
environmental factors, within which the organization is existing (Eden and Ackermann
2013). This is the most useful technique for knowing about the political, economic, socio-
cultural and technological environment where an organization is operating.
Figure 4: PEST Analysis of General Electric
(Source: Rothaermel 2015)
The PEST Analysis of General Electric is as follows:
i) Political Factors: The political factors of General Electric manly involve the
various rules like the tax policy, trade restrictions, employment laws, political stability and
environmental regulations (Mitchell and Harris 2012).

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ii) Economic Factors: The economic factors of General Electric mainly include the
interest rates, currency exchange rate, economic growth and inflation rate (Rothaermel 2015).
These factors are extremely important for GE.
iii) Social Factors: The social factors are the population growth, health attitudes and
age demographics.
iv) Technological Factors: The most important factors of General Electric are the
technological factors in PEST analysis (Lasserre 2012). The investment incentives and the
rate of alterations in technology are mostly influenced by the technological factors.
Thus, SWOT analysis and PEST analysis are the two examples of strategic options for
GE for the betterment in the next five years.
There are various strategic options available for GE (Weiss 2014). The most suitable
and recommended strategic option for GE is the diversifying in the higher growth markets
with the help of advanced technologies. GE has a diverse range of products in several
segments like software, medical engineering, pharmaceutical and many more. In this type of
conglomerate organizations, diversification is highly recommended (Mitchell and Harris
2012). The utilization of advanced technology in their business will definitely bring huge
success in the next five years.
Kaplan’s Balanced Scorecard helps to analyse and evaluate the strategies undertaken
by an organization (Keupp, Palmié and Gassmann 2012). It prioritizes the various products
and services and monitors or tracks the overall progress to the strategic targets. The Kaplan’s
Balanced Scorecard for GE is as follows:

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Figure 5: Kaplan’s Balanced Scorecard for GE
(Source: Weiss 2014)
The vision and strategy of the Kaplan Balanced Scorecard comprises of four aspects,
namely, customer, financial, internal business and learning and growth (Keupp, Palmié and
Gassmann 2012). The recommended strategy for GE is the diversification by advanced
technologies. The customer should be satisfied with the overall diversification of products.
This diversification should also match with the financial criteria of the organization and
should not exceed limit. The internal business processes must be checked and tracked for
meeting the estimated targets and various opportunities of learning and growth must be
present (Mitchell and Harris 2012). Thus, Kaplan’s Balanced Scorecard would be utilized for
monitoring the strategies of GE. The strategies can be evaluated with the technique of SAFe,
which means suitability, acceptability, feasibility and evaluation.

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4. Jack Welch or Jeffrey Immelt? A Management Approach Perspective
The management approach is evaluated on the basis of several factors and parameters
(Ge.com. 2018). Moreover, the management style is extremely required in this case. Jack
Welch was the former CEO of General Electric from the year 1981 until 2001. He was then
succeeded by the current CEO of General Electric, namely Jeffrey Immelt. Both of them are
known for their exclusive management approaches (Michalski 2013). However, both of the
approaches differ a lot due to the time gap.
The comparison and contrast between the management approaches of Jack Welch and
Jeffrey Immelt are as follows:
i) Business Operations: There is a huge difference between the management
approaches of the two CEOs. Jack Welch mainly focused on the improvisation of efficiency
and cost effectiveness (Egan 2013). He was the first one to introduce the Six Sigma Lean
Management in business. However, Jeffery Immelt mainly focuses on taking up challenges
and innovation in business and opted for advance marketing.
ii) Leadership: Both of them had their unique ways of leadership. Jack Welch focused
on the sincerity of tasks and for him performance was everything (Michalski 2013).
However, Jeffery Immelt is democratic in nature and concentrates on effectiveness and not
performance.
iii) Strategies in Business: Jack Welch had the habit of dynamic planning, which
eventually means he took decisions at the end moment. However, Jeffery Immelt is total
opposite (Mitchell and Harris 2012). He beliefs in long term advantages and makes decisions
much prior to the actions.

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iv) Economic conditions: Jack Welch has only faced all types of domestic
competition (Michalski 2013). However, Jeffery Immelt has faced every situation like
slowing down of global economy to international competition.
Hence, from the comparison, it is evident that Jeffery Immelt is a step forward than
the former CEO of GE as he has seen various business turmoil and has a much more practical
approach for his business (Ge.com. 2018). The present business world is VUCA or volatile,
uncertain, complex and ambiguous. It is highly needed that the business strategies should be
changed periodically with practical approaches. Jeffrey Immelt is more suitable in this
situation.
5. Conclusion
Therefore, from the above discussion it can be concluded that GE is the largest
multinational organization of the United States of America. It is a conglomerate corporation
that has its incorporation in New York and the headquarters are in Boston. This particular
company has several sub divisions mainly including the Renewable Energy, Capital,
Aviation, Energy Connections, Power, Lighting, Global Research, Transportation, Current,
Oil and Gas and Healthcare. Each and every segment of the organization of General Electric
provides the specific needs of industries related to engineering, automotive industries,
medical devices, finance services, pharmaceutical, software development and finally life
sciences. The above report has described about the core competencies of General electric
organization. Moreover, the several strategies are also discussed here that could be the
options for this organization. There was always a comparison between the present and the
previous Chief Executive Officers or CEOs of General Electric. The best management
approach for this organization is also provided in the report with relevant details.

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References
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Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
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Appendices
Appendix A: Case Study
When Jeff Immelt got up to welcome shareholders to General Electric Company’s annual
general meeting in Oklahoma City on April 22, 2015, it was the 14th annual general meeting
of the company he had presided over since his appointment as chairman and CEO in 2001.
Yet his address to the meeting also made it very clear that General Electric (GE) was still a
work in progress. In his address, Immelt outlined his vision of GE as a “connected industrial
company” that stood at the intersection of the physical and digital worlds and blended “the
best elements of speed, scale and flexibility.”1 To further this vision, GE would be
undertaking major adjustments to its business portfolio during 2015: completing its biggest
ever acquisition, Alstom’s power equipment and grid businesses, and divesting the major part
of its financial services company, GE Capital.
GE through the challenges of the 21st century, the company’s financial performance had
lagged. Early in his tenure, Immelt had set ambitious performance targets for GE: sales
growth at 2–3 times that of global GDP, 10% plus earnings growth, and a 20% plus return on
total capital.2 GE’s performance had fallen well short of these targets (Table 1). GE’s share
price told the story: when Immelt’s appointment had been announced late in 2000, GE’s
stock was trading at $53: since taking office, GE’s share price had never regained these
heights