GE's Growth Strategy Visit below link to get the original presentation file. http://mymiok.com/18

1. IM551 IT Management & Strategy
KAIST Business School
Information & Media Management
McGinsey & Company
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2. 2

3. Agenda
I. Corporate Overview
II. Success Factors
III. Business Process
IV. GE, for the next
V. Suggestion
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4. • GE’s Present
• History of GE
• Key Person of GE
• Business Portfolio
• Performance
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5. GE’s Present
KEY PEOPLE Jeff Immelt, Chairman & CEO
Keith S. Sherin,CFO
Gary M. Reiner, CIO
REVENUE $173 billion USD (2007)
NET INCOME $22.5 billion USD (2007)
EMPLOYEES 320,000 (2007)
Market Value $4,200 billion USD
Characteristics The only company listed in the
Dow Jones Industrial Index today
that was also included in the
original index in 1896
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6. History of GE
1876
Thomas Edison opened a new laboratory in New Jersey
1890
1896 Edison had organized his various businesses into the
General Electric was one of the original 12 companies Edison General Electric Co.
listed on the newly-formed Dow Jones Industrial Average.
GE is the only one that remains today. 1919
The Radio Corporation of America (RCA) was founded by
1960s GE and American Telephone & Telegraph (AT&T)
General Electric was one of the eight major computer
companies with IBM
1981
Jack Welch inaugurate to CEO
1996
Introduction of Six Sigma Quality 2001
Jeffrey Immelt inaugurate to CEO
2004
NBC Universal, 3rd largest media company from
Vivendi Universal
2005
GE reorganized its 11 businesses into 6 large units
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7. Key Person
Tomas Edison Reginald H. Jones
Founder, 1847 – 1931 CEO, 1972 – 1981
 Invent the phonograph  Managerial qualities
and electric light bulb  Relationship between
 hold 1,093 U.S. patents business and government
Jack F. Welch Jr.
CEO, 1981 – 2001 Jeffrey R. Immelt
 Customer-Focused CEO, 2001 – Present
Methodology to Improve  New Frontiers & Strategic Alliances
Quality without Defect for GE
 Today…Rigorous Employee 6σ  Business Transformation
Certification
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8. Business Portfolio
6 Global Business Unit Healthcare
• Medical Diagnostic
• Clinical Systems
• Life Sciences
Infrastructure
Commercial Finance
• Oil & Gas
• Capital Solution
• Transportation
• Real Estate
• Aviation
• Corp Finance SVC
• Water
• Healthcare Finance SVC
Industrial NBC Universal
• Customer & Industrial • Television Group
• Enterprise Solution • Universal
• Security/Sensing • Digital Media
• Europe
• Asia
• America
• Australia
GE Money 8

9. Performance
Consolidated Revenues Earnings
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
(in $ billions) (in $ billions)
173 22.5
152 19.4
137 17.4
Compound 124 Compound 13.3 15.6
105
annual growth annual growth
rate of 13% rate of 14%
Revenue by Business Revenue by Region
A. Infrastructure 29% D. Healthcare 10% A. US 50% D. Americas 7%
B. Industrial 23% E. Commercial B. Europe 23% E. Others 7%
C. NBCU 10% + GE Money 28% C. Pacific Basin 13%
E
E A D
C C A
D
C B B
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10. Executive for Growth
Summary of Success Factor
- Organic Growth
- Biz Transformation
- Globalization
Lessons from Jack Welch &
Immelt
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11. Lean Six Sigma
Growth Customers Net Promoter Score
Use process
Leadership Traits excellence to
satisfy
customers and
Growth drive growth Innovation
Leaders Generate new
Inspire and ideas and
develop people develop
that know how capabilities to
to help make them a
customers and reality
GE grow Imagination
Breakthroughs
Execute for CECOR framework
Emerging
Markets Growth
Globalization Great
Create
opportunities Technology
everywhere and Have the best
expand in products,
developing global Commercial content and
markets Excellence services
Develop world- New Product
class sales and Introduction
marketing talent
and demonstrate
One GE: the value of
Enterprise Solutions “one GE”
& Brand
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12. Work-out
CAP (Change Acceleration Process)
Six sigma
Performance Ranking System (Vital Curve)
Crotonvill
Performance
Execution
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13. How we fit into GE’s strategy
Help sustain a healthy portfolio
filled with “great businesses”
Strategic Acquisit
Analysis ions
Add Substract
+ New technologies - Low return
+ New geographies - Low growth JVs and
Disposit Sustain Partner
+ New growth platforms - Low tech ions
Growth ships
+ Scale / cost reduction
+ Capabilities Integrat
Portfolio ion and
assessm “de-
ent integrat
Help strengthen the competitive ion”
position of our businesses
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14. GE is continuously evolving
Strong portfolio
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15. Global revenue 13% Developing counties-growth
100 60
80 50
40
60
30
40 81 87
75 50
20
20 21
29
10
0 0
05' 06' 07' 05' 06' 10'
$ in billions $ in billions
- In 2005, global revenue : 75$ billion, 21$ billon from developing
countries
- In 2004, impressive 37% increase on the previous year.
- Over the next decade, 60% of GE’s growth : developing countries
(predict)
- China, India, Russia, Europe, Southeast Asia, Middle East, South
America.
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16. Biz Portfolio Restructuring
- No.1 or No.2 : Fix, Sell, or Close
- 3-Circle concept :
12 Division, Finance/ Service
Reorganization
- Downsizing
- Delayering
- Empowerment
Cultural revolution
- Crotonville
Core Business : Power Systems, Appliances,
- Work-out Lighting, Transportation
Technology : Aircraft Engine, Aerospace,
- CAP Materials, Medical Systems
- Performance Ranking System Service Business : Finance Service, Communications,
Information Service, Broadcasting
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17. Establish much more openness and trust
Rebalancing the portfolio
Marketing-oriented
“ At the customer, For the customer (ACFC)”
Growth :New platforms, New process
New people profile
Infrastructure for developing countries
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18. Jack Welch Jeff Immelt
Efficiency Oriented
• Strong business and down- Effectiveness Oriented
Paradigm
sizing • Growth engines for the future
• 1.2 or sell
6 Sigma Growth
Methodology • Quality and costs • External growth
• Finance • Marketing
Target
EU, USA Developing countries
Market
Cash Generator Growth engine
Portfolio
• finance, Service • Infrastructure
Responsibility Within the law Social responsibility
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19. Why Process is Important
Business Process in GE
Tools for Change
Methodologies
- Work Out
- Six Sigma
- CAP
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20. Strategy Strategy-Process
Strategic
Alignment
- Align to changing external
KPI / Action Monitor & factors (market, competition,
Item Feedback
technology and customers)
Process
Execute
Operational
Process Process Continuous
Improvement Control
Plan Process Improvement
-Standardization
-Optimization
Improve
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22. Scopes of Changes
Small Large
Component of Change
Quality Work-Out Six Sigma
Technical Strategy “Expert-driven” “Data-driven”
Leadership Development
Change Acceleration
• Corp. Entry Programs
Acceptance Process(CAP)
• Crotonville Courses
Cultural Strategy
GE Values & 360° Reviews
Cultural Integration
Learning Organization
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23. • Improvement and implementation of a new “Open Culture”
- Building Trust : Tear down barriers within the organization
Goal - Empowering Employees : Leverage individual creativity and potential
- Elimination of Unnecessary Work : Remove bureaucracy
- A new paradigm for GE : Participation through a sense of accomplishment and ownership
Work-out Process Typical Org. Structure
• Derive Issue Sponsor
Pre-Meeting
• Clarification of Driving Body • Employee Empowerment &
(D-4Weeks)
• Compose Participants Speedy Decision Making
• Set Concrete Goal
• Participation of Sponsors • Oversee & Support Follow-Up
Work-Out • Team start-up
• Problem Solving
How Session Champion
• Execution Plan
(D)
• Presentation / Decision
Making Facilitator Admin. Office
• Accurate Understanding
• Regular/Occasional • Measure Current Status
Follow-up about Issue at Hand
Monitoring & Data Collection
Meeting • Develop Facilitation Skill
• Continuous Monitoring
• Share Success Story • Maintain Comm. With
(D+12Weeks) • Select & Train Facilitator
• Reward Admin. Office
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24. •To maintain its position of advantage, Six Sigma targets a 6 sigma level of quality
for all business processes in SVC, product, sales, etc.
Goal - Targets this level of optimization not only product and SVCs, but all across its business operations
- Achieve superior management quality and cost competitiveness by eliminating loss due to faults or
mistakes by management systems
Six Sigma Process DMAIC Six Sigma Org. Structure
Define high-level project goals Champion Responsible to represent the needs and to
improve the operational effectiveness
Definition and the current process
Master Black Ensure that quality objectives and targets are
set, plans are determined, progress is
Belt tracked, and education is provided
Measure key aspects of the Black Belt
Heart and soul of the Six Sigma quality
initiative. Lead quality projects and work full
Measurement current process and collect time until they are complete.
relevant data Green Belt Employees trained in Six Sigma
How Analyze the data to verify Success Factors
Analysis
cause-and-effect relationships.  Strong Top-level Leadership
 Systematic Nurturing of Six Sigma Experts
 Formation of Organizational Structure committed
Improvement Improve or optimize the process
to Innovation
based upon data analysis
 Support management in consulting, training,
finance issues
Set up control mechanisms  Link to Reward/Promotion Structure
Control and continuously monitor the  Regular sharing of Know-How
process  Sharing of Success Cases/Best Practices
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25. •Achieve change acceleration by Key Strategy Initiatives
increasing employee acceptance
regarding changes
Goal - Built an competitive organization through
Work-Out tools
continuous cultural revolution
- Remove bureaucratic elements within the
org. structure Change Acceleration Process
7 Stages of Change CAP Session
Leading Change Leading a change Secure Champion to drive changes
Creating a Share necessary changes & persuade with
Creating A Shared
Shared Need diagnostics & analysis
Need
Share a visionary image of what this change
Shaping A Vision Shaping a vision
can achieve
Mobilizing Find and support committed employees to
How Commitment
Mobilizing
Commitment
put changes into practice and spread its
realization
Monitoring Control and monitor goals, actions and
Making Change Last
Process achievement levels of change activities
Monitoring Progress Making change Make changes last by training all employees
Current State Transition State Improved State last across the organization
Changing system Set up systems and structures to support,
Changing Systems & Structures and structure drive and complete changes
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26. • Pressure on GE customers
• Enabling sustainable growth
• GE’s commitments
• GE's Next
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27. Increasing
Population
Climate Change
Emerging Debate
Markets Growth Customer
Carbon
Emissions Constraints
Standards
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29. Energy
• Solar, Wind, Biogas, IGCC, Gas turbines
Water
• Reuse, Desalination, Industrial, Cooling
Transportation
• Aviation, Rail, Automotive, Marine, Fleet
Industrial
• Lighting, Appliance, Motor, Finance
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30. Year 2100
Year 2020
Year 2010
Year 2000
• Adaptive and challenging attitudes
Before 1990s
• R&D investment + Customer focused
• R&D investment + Customer focused
• Process Management for growth + Organization development
• Product Diversifications + Organization Restructuring + Productivity
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31. Suggestion
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32. Questions
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