general electric presentation

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  • 1. Aaron Trigg, Lindsey Mauro, Michelle Milkovich, Sean Smith

2. In 1890, Thomas Alva Edison established the Edison General ElectricCompany in Menlo Park, New Jersey At the same time Charles A. Coffin was growing his business, TheThompson Company It was increasingly difficult for Edison and Coffin to remaincompetitive based their own technologiesThe two companies united in 1892 and formed The General Electric Company Headquartered in Fairfield, CT 300,000 employees In over 160 Countries CEO - Jeffrey Immelt 3. Although GE does not have an exact mission statement itoperates under the following four main values:Values - Imagine, solve, build and lead - four bold verbs thatexpress what it is to be part of GE. Their action-oriented naturesays something about who we are - and should serve toenergize ourselves and our teams around leading change anddriving performance.Vision We Bring Good Things to life 4. 1879 Thomas Edison Invents light bulb 1890 Edison General Electric Created 1892 Edison merges with Thomas-Houston Electric (owned by Charles Coffin) 1896 One of first 12 companies listed on Dow Jones Industrial Index 1919 Founded Radio Corporation of America (RCA) to further international radio(later sold) WWI Developed Aircraft turbosuperchargers 1941 Whittle w.1 jet engine GE Aviation 1950s GE began Computing branch (Sold to Honeywell in 1970) 1968 American Airlines and United Airlines chose to purchase new GE jet engines 1981 Jack Welch named CEO (GE worth $13B) 1986 Purchased RCA & NBC 1992 Purchased Britains General Electric Corp (Overseas growth) 1995 GE Adopts Six Sigma management approach 1998 Revenues over $100B for first time 2001 Jack Welch Retires (GE worth $410B)/Jeffery Immelt named CEO 2001 Honeywell Merger Blocked 2002 Acquired wind turbine assets from Enron 2004 Reorganized GEs 13 businesses into 11 focused on customers 2007 Acquired Smith Aerospace/Sold GE Plastics 2010 Acquired gas engine manufacturer Dresser Inc. 5. Worlds Largest Producer of Solar Panels 6. NBC is an American commercial broadcastingtelevision network 7. UK pharmaceutical company, specializing inmedical diagnostics and life science products 8. Conglomerate Company based out of Gotham City 9. EnergyEnergy Services Oil & Gas Power & Water Technology InfrastructureAviationHealthcareTransportation GE CapitalAmericasAsia PacificAviation Financial ServicesConsumer FinanceEurope, Middle East & AfricaEnergy Financial ServicesReal Estate Home & Business SolutionsAppliances & LightingIntelligent Platforms 10. GENERAL ELECTRIC SIEMENSRatio2010-2011 2011-2012Ratio2010-2011 2011-2012Total Asset T.O. .2.2 Total Asset T.O. .77 .71ROA1.481.79 ROA3.945.94ROE9.6 11.15ROE14.18 20.53EPS1.24 (ttm) EPS8.72 (ttm)FCF/NI 2.261.46 FCF/NI 1.8 .91Current3.012.73 Current1.221.21EBT Margin 9.4613.64EBT Margin 7.6512.57Debt/Equity2.722.34 Debt/Equity.62 .45Receivables T.O. 12.99 10.34Receivables T.O. 5.175.24Inventory T.O. 6.1 5.39 Inventory T.O. 3.743.42 11. Six Sigma Business Management Strategy Originally created by Motorola Inc. John Francis "Jack" Welch, Jr. GE CEO (1981-2001) Early adopter (1995) In 1980, the year before Welch became CEO, GE recordedrevenues of roughly $26.8 billion. In 2000, the year before heleft, the revenues increased to nearly $130 billion. The company had gone from a market value of $14 billion tomore than $410 billion, making it the most valuable andlargest company in the world. Interview with Jack Welch about Six Sigma 12. Strengths Global strength and recognition 6th in Fortune 500 list, operating in more than 160 countries 5th Best Global Brand 19th Most Innovative Excellent management 7th Best Company for Leaders Proven leadership and business model Confident investors raising capital Diverse product range Long Term (GE Aircraft engines) Short Term (GE Lighting, Plastics, NBC) Financial Services (contributes to 40% of GEs revenue) Spreading the risk of failure in every market and not just one 13. Weaknesses Conglomerate Complexity in management and difficult for analysts and investors tounderstand operations No Mission Statement Without a clear mission, it can be difficult to make decisions and set thedirection of the company Company size/ acquisition restriction Eg. GEs planned acquisition of Honeywell International, a diversifiedtechnology and manufacturing company, specializing in aerospaceproducts, was rejected by the EU Energy Segment Underperforming, no signs of near future recovery Pollution History of being a heavy polluter 4th Largest Corporate Producer of Air Pollution in the United States Flexibility Large and diverse businesses might overstretch the company andreduce reaction times to shifts in targeted markets 14. Opportunities Green Technology Had a history of being polluters, so finding environmentally friendlyalternatives $850 Million investment into Renewable Energy Investment into Solar Technology for use in Plants Divesting Consumer and Industrial Businesses Research and Development Immense capital allows GE to contribute a lot to R&D for productdevelopment and improvement Increased geographic growth Global expansion = more opportunities (Eg. China) Merger between NBC and Vivendi Further opportunities in the media business Improved customer services Adopted a new customer focus initiative 15. Threats Technology Disaster Produced nuclear reactors that contributed to Fukushima disaster Exposure to global economy Economy slowdown would affect GE, since 40% of the revenue isgenerated overseas Exposed to currency fluctuations Publix Relations Problems $84 Million used for political lobbying Pay no taxes and $4.7 billion in tax rebates Laid off over 4,000 workers while increasing executive pay by 27% Intense scrutiny after Enron More transparency and disclosure; skeptical investors Public image of all large companies suffered Competition Constant change in technology heats up competition Very diverse:- tough to be the best in all industry 16. Threat of New Entrants Tough for new entrants to pinch a sizable chunk ofmarket share from GE or its competitors All of GEs companies are in very large-scaleeconomies, which are difficult to break into. Itwould require a great deal of capital in advertisingto get a new companies brand name out to thepublic 17. Threat of Substitutes The financial segment of GE is not as susceptible toa threat of substitutes as other units of GE.i.e.: it is much easier for a customer to switch their brand of appliances than its financial institution GE NBC is highly prone to substitutes as viewers caneasily change the channel to another network Just about every technological product GE creates hasthe threat of substitutes, technology is constantlyevolving and becoming more efficient. 18. Bargaining Power of Buyers Due to the size of General electric, they haveconsiderable bargaining power for most of theirproducts. For companies such as GE Healthcare the volume perbuyer is very high in quantity of goods and cost ofgoods, making the switching cost high for buyers, givingGE the advantage For other companies such as GE financial, it is easier andnot as costly for buyers to switch, making it essentialthat GE stays competitive in price wars with thecompetition. 19. Bargaining Power of Suppliers The bargaining power of suppliers is relatively lowfor GEs many industries Because of the shear volume of goods that GE buysfor their suppliers, suppliers have very little ability tobargain with GE Most of GEs suppliers could not survive if they lostGEs business GE has to be aware of suppliers that might integrateforward 20. Competitive Rivalry Within Industry Rivalry with Siemens biggest competitor Creating competitive advantages to create bigger market share Acquisitions, mergers and joint-ventures Battle for innovation and technologicalimprovements GE has high brand recognition, marketshare, access to assets and competencies andcustomer loyalty making it highly competitivewithin the industry 21. Do not become complacent Understanding Growth Potential of each divisionand how to be #1 Expect to be industry leaders in market share, valueand profitability, if a business cannot meet our financialgoals, or could be better run outside GE, we will exit thatbusiness rather than erode shareowner value Divesting Are all of the divisions necessary? How competitors are performing, to stay ahead 22. Making sure they make smart decisions Know the company culture, values and performance before acquiring in order to make sure they align with GEs Ex. Kidder, Peabody (Brokerage Firm) Investment into Environmentally Efficiency