Strategies of Jeff Immelt
Question:
Discuss About The Energy Efficient Buildings Via Retrofitting?
The organization is accompanied by the complex set of activities in which several functions and activities are performed in an effective manner. In this report, the proper case study has been analyzed. The case study has been prepared on the basis of re-structuring of General Electric business. The main purpose of this assignment is to understand the core concepts, models and frameworks of GE business and its strategic business functioning. In the starting of this report, strategies of Jeff Immelt have been evaluated. After that, alignment of the strategies with the resources available to the organization has been analyzed. In the mid of the assignment, implemented new strategies and re-engineering of the business is evaluated.
The General Electric business was the world’s most valuable company. It was founded in 1882 from the merger of Thomas Edison’s Electric Light Company with the Thomas Houston Company. The CEO of the company was Jeff Immelt who implemented various strategic plans to make the GE business more effective (Smith, 2017). The Jeff Immelt had given various strategies in this case study to improve the business performance of General Electric business.
General Electric business had the effective business functioning and throughout the time. It is considered that new growth opportunities and effective business could be directed by the Jeff Immelt.
- He ruled through intimidation and thrived as something of a cult figure which helps in re-structuring of the business.
- The main way to redirect the strategy of the GE was based on the business environment and employees oriented business policies.
- He put emphasizes upon the satisfaction of the employees and align the interest of the employees with the organizational goals and objective. He also formulated the business polices in which employees were offered employees stock option scheme.
- He established the proper nexus between employee’s growth and organizational development at large.
- He also endeavored towards reformulating the business model to a deployment of the funds to increase the corporate credibility.
- The main shortcoming of the General Electric business was related to its less diversified business. He also encountered the problems and issues which company was facing due to its high cost of capital.
- Jeff Immelt with the collaboration of the financial manager of company redirected the financial plans of the business and increased the debt funding.
However, it resulted in increased financial leverage but also reduce the overall cost of capital of the organization. In addition to this, company was also facing issues related to profitability. These challenged were redirected by the Jeff Immelt by formulating the strategic plan of the business on the basis of four identifying opportunities for profitable organic growth.
Demographics- Diversifying the business in health care industry to grasp the potential market of the children, old people and people who are suffering from some kind of health issues (Baradaran, 2015). This change is undertaken to expand the business market by providing services to children, old people in health care industry
Infrastructures- Investment in the Energy, water, and oil gas production aviation rail transportation. This plan is undertaken to diversify the busienss in other busienss sector.
Emerging market- There were several emerging market which was undertaken by Jeff Immelt such as digital media and online business channels. It is done with a view to expand the business in this digital growing business due to the high growth of this market industry.
These all above given business plans was undertaken by the Jeff Immelt for the effective growth of the GE Electric and assisted to increase the profitability. However, the biggest change in the GE Electric was related to the adoption of the Cyber computing enterprises resources planning to build the virtual world. It not only assisted to reduce the manual work and complexity of the business but also increase the effectively of the organization. Jeff Immelt found the immense need for the adoption of the advanced technologies due to the global warming, water scarcity, and conservation. It not only increased the overall outcomes of the organization but also resulted in innovatory responses to alleviate the possible problems.
Aligning Strategies with Organization’s Resources
Therefore, it could be inferred that Jeff Immelt redirected the strategies of the GE Electric by using advanced cyber computing system, implementing employee’s oriented environment, reshaping the financial planning and diversifying the business in other niche markets (Beagan, Chapman and Power, 2017).
All the strategies implemented by the Jeff Immelt were designed to increase the organic growth of the GE to 8% per annum. It not only increases the overall outcomes but also put emphasis on creating a value of the business models. The main change of GE Electric was related to adopting new business model and re-engineering of the value chain activities of the business.
The main changes in the business environment of GE in 21st-century business environment
It was most visible changes which were introduced by the Jeff Immelt. In order to align the requirement of the 21st-century business environment, Jeff Immelt facilitates more effective cross-business integration, implementing new cyber system and recognized all the GE’s divisions into a smaller number of business sectors.
- The key changes were related to shareholders oriented business environment.
- Jeff Immelt changed all the business policies to increase the shareholders’ value maximization for the long-term earning.
- There are several outcomes which were identified and encountered the problems and issues of the 21st century (Wang, et al. 2017).
- Eliminating the poor business model- Jeff Immelt came up with the newly designed business model which was based on the cyber computing system and put emphasis on the automation in the business functioning.
- It not only reduces the complexity of the working but also increases the working efficiency of the employees.
This new business model worked on the basis of 9 blue prints set up for increasing the turnover, profitability, installing new training and development program for employees an increasing the efficiency of the value chain activities.
Identifying the potential sources of profit- Jeff Immelt identified that profitability of the company is highly dependent upon the cost of the capital, turnover, and efficiency of the value chain activities. He used proper financial management plan and focused on the reducing the cost, eliminating the underperforming assets, exploiting the opportunities offered by the financial services advisers. He assisted GE Electric to diversify the business in new areas so that funds could be deployed in the more efficient way to increase the outcomes of the organization.
Diversifying the business-The main business strategic plan which Jeff Immelt introduced for the GE Electric to encounter the financial and non-financial issues in the 21st century was based on the grasping the new business functioning and tapping the niche markets. This busienss was adopted with a view to increase the overall outcomes and deploy the funds in the efficient manner (Agarwal and Brem, 2015).
Reshaping the organization culture with the change in environment- It is considered that Jeff Immelt implemented a new strategic program and more stakeholders oriented business policies. These policies were designed to satisfy needs and demand of the stakeholders. For instance, employees oriented business program was arranged to increase the working satisfaction of employees and reducing the employee’s turnover. On the other hand, stakeholders were offered the good amount of earning per share for their better return. In addition to this, new business model based on the enterprise’s resources planning cyber computing system is installed with a view to establishing automation in the business.
In order to evaluate the extent to which company aligned its strategies with the requirements of the 21st-century business environment, proper assessment of the existing resources has been evaluated. It is considered that strategies such as diversifying the business, new financial plan and stakeholders policies had assisted GE Electric to increase its overall turnover and also resulted to 15% profit throughout the time. The profit of company increased due to the diversified business functioning. It is considered that new business model allowed an organization to increase the quality of its products and services in a market. In addition to this, new strategies implemented focused on implementing stakeholders oriented business policies which not only increased the efficiency of the business but also increase the satisfaction level of clients (Zhou, et al. 2016).
Implementation of New Strategies and Re-engineering of Business
GE has strong research and development department which is indulged in development and creation of the innovative and technical machines. In addition to this, it has proficient expert employees in its busienss who are indulged in effective performance improvement. It has shown that company has strong brand image and by using its set up brand image, it could expand its busienss to cover more market share.
With the changes in economic conditions and complex business structure, it is observed that Jeff Immelt used advanced technologies as the major driver of GE’s future growth. The Jeff Immelt prepared its strategic plans and procedure to increase the overall outcomes and efficiency of the business. Company infused more capital in its research and development department for the more creative and innovative functions. It used its Advanced Technology Programs in molecular imaging and diagnostics, nanotechnology, energy conversion, advanced propulsion, and sustainable energy to grasp more market share.
It is evaluated that GE Electric used its advanced resources of nanotechnology and energy conversion to introduce new market share. Nonetheless, the marketing strategies and newly adopted business model program have also increased the overall efficiency of the business. The company used advanced 37,000 technologists working in R & D to develop highly advanced products and services for the betterment of the society and environment at large. Another strategic program implemented by the Jeff Immelt was related to GE’s “Ecomagination” program to address the challenges such as the use of resources efficiently, reducing the hazardous gas emission. This customer focused and integration solution strategies plan also assisted GE Electric to increase its overall turnover by meeting all the needs and demand of the clients in a market (Berbel, et al. 2015).It is evaluated that the main capability of the general electric capital was related to its international business. It is observed that the corporate management business model develops various experts not only for the GE Electric but also for the other organization. It is considered that company had effective leaders which could help in innovative and creative leading business of an organization.
In addition to this, Jeff Immelt also used the divestment strategic plan to reduce its investment in the loss-making business. It is observed that GE Electric had to reduce the overall capital by undertaking proper business strategy such as reducing the investment in particular working process, deploying more funds in the profit-making business units. This has allowed GE Electric to expand its existing business by increasing the overall turnover and profit at large. Therefore, it could be inferred that Jeff Immelt had used all of the company’s excess funds in other business which gives more profitability’s to increase the overall outcomes (Liquete, et al. 2015).
Therefore, after evaluating the GE’s core competency, it could be inferred that Jeff Immelt could use company’s brand image to expand its busienss. In addition to this, by using advance technologies and machines, GE could enhance molecular imaging and diagnostics, nanotechnology, energy conversion, advanced propulsion, and sustainable energy.
With a view to increasing the effectiveness of the GE Electric, Jeff Immelt sub divided the GE Electric business into sub division. Jeff Immelt introduced various new strategies and effective business plan to increase the overall outcomes and implement innovative and new technologies. However, these all the strategies and newly developed programs were designed to increase the overall turnover in 5 big markets such as technologies, infrastructure, health care organization, industrial and commercial organization. Nonetheless, Jeff Immelt entered into the strategic alliance to increase the overall outcomes. Jeff Immelt made the GE Electric more employees oriented and revitalization of GE’s marketing functions. It is evaluated that new strategies which were implemented by the Jeff Immelt were related to reshaping the business models through growth platforms, acquisition of the new business units, grasping new opportunities, coordinate multiple business units. Jeff Immelt changed the organizational structure and appointed line managers in a separate department who took their individual decisions. It made the business of GE more employees oriented and increases the overall outcomes in an effective manner (Ye, et al. 2015).
Adoption of Advanced Technologies
Nonetheless, focusing on clients and enterprises resources planning requires simple structure. Therefore, it could be inferred that new strategies implemented by Jeff Immelt will require changes in business model, installing the new cyber system to increase the effectiveness of working and increase the overall outputs in determined approach.
It is considered that GE was fastest growing business and accompanied by the diversified business functions. The execution of the newly adopted strategies such as advanced cyber computing system, implementing employee’s oriented environment, reshaping the financial planning and diversifying the business in other niche markets allowed to customized its all the products and services. The implementation of the advanced technologies will allow a company to increase the effectiveness of its newly tapped market such as Energy, water, and oil gas production aviation rail transportation. In addition to this, by modifying the business model would also result to overcoming the global warming challenges, efficient deployment of resources and provide innovatory responses to alleviate the possible problems and issues in GE Electric (Oguri, et al. 2017).
There are several strategies which could be considered by GE Electric which are given as below.
Employees retrenchment- It is one of the effective strategy functions which will allow GE Electric to reduce its overall cost of capital and also increase the overall outcomes in an effective manner.
Take over other business units- It is evaluated that GE Electric had been facing issues related to high cost of productions of services and products. If GE Electric over takes other business units which could provide the same services at low cost then it will surely increase the value of the GE Electric(Taylor, et al. 2016).
Hiring expert’s members at the management level- It is analyzed that if expert’s members are hired at the management level then GE Electric might avoid the possible problems and issues in an effective manner. They could easily spot the problems and issues of the business in determined approach.
Improve the busienss work process by adopting more advance busienss intelligence- GE electronic could undertake more advance busienss intelligence to improve the outcomes of the business. It is the best strategy to increase the overall outcomes of the organization and improve the existing business performance
Changing business model and value chain activities- It is evaluated that if a company could change the existing business model then it will allow an organization to make changes in its existing business channels and increase the overall outcomes. It will also allow an organization to reach the possible methods and means to create synergy in its business functions (Onoue, et al. 2017).
Using capital budgeting technique- It is analyzed that GE Electric has been facing issues related to high cost of capital and less capital employed of business. Therefore, CEO of the company could use capital budgeting technique such as Net present value, internal rate of return and payback period before accepting any project in business.
Shareholders responses in cases strategies of the GE failed
In case if all the strategies implemented by the GE failed then shareholder will ask for the extra ordinary general meeting to analysis the case. They will vote for the dividend payment and other benefits to be given to them. It will destruct the business value of the organization in the long run.
Main Changes in Business Environment of GE in 21st Century
Shareholders will vote for the changes in the management of the company.
After evaluating all the detail and case analysis of GE Electric, it is considered that the GE Electric has been facing issues related to high cost of productions and services and less productive business outcomes. If the company wants to improve its business then it will have to first undertake divestment strategic plan to reduce its investment in GE Electric business (Otoo, Agapitova and Behrens, 2015).
Conclusion
There are several factors which may influence the business functioning and success of GE Electric. However, there are several strategic plans such as advanced cyber computing system, implementing employee’s oriented environment, reshaping the financial planning and diversifying the business in other niche markets which could be undertaken by GE Electric to increase the overall efficiency of the business. The CEO of company implemented a new strategic program and more stakeholders oriented business policies to attract the more clients and increase the effectiveness of value chain activities of GE Electric. Now in end, it could be inferred that GE Electric could improve its business by implementing all above given strategic program.
References
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Zhou, Z., Zhang, S., Wang, C., Zuo, J., He, Q. and Rameezdeen, R., 2016. Achieving energy efficient buildings via retrofitting of existing buildings: a case study. Journal of Cleaner Production, 112, pp.3605-3615.
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