Jack Welch's CEO: A Case Study: Alstom

Analyzing GE’s corporate-level strategy from 2001 – present with Jeff Immelt as CEO, GE focuses on the growth and development platforms. Technology is the key driving force for GE’s future and growth. Advancements in industries such as energy, health and aviation fueled demand for cleaner and more efficient energy production. GE identified new markets with potential high-growth that offered attractive returns through strategic mergers and acquisitions. As CEO, Jeff Immelt established a process for identifying projects that offered attractive growth potential which were then nurtured and treated as special projects or initiatives that were not subject to strict budget constraints. Immelt introduced GE’s three strategic imperatives as: (1) sustaining its strong business model, (2) strengthening the business portfolio, and (3) driving its growth initiatives. www.ge.com

On May 27, 2007 General Electric (USA) sold GE Plastics to Saudi Basic Industries Corp. (SABIC) for $11.6 billion.

Also; Citigroup, Inc. another competitor for the GE Company made a total of $64.95 billion in 2011, and when we compare it with GE and SI its earnings where even less in the same year, making General Electric a leader in the industry. With this valuable information GE management can analyze its competitor’s financial statements results and from there they can evaluate their faults and create new ways to increase their annuals earnings and secure their place as one of leading companies in their industry. Another way GE can go forward in the industry is by adapting its services and products to other countries that need them.

In order to achieve its goals clear guidelines were set that specified the degree and timing of acquisitions – focusing only on companies that exhibited stable earnings or earnings countercyclical to the gas transmission industry. Cooper focused on acquisition targets that possessed strong assets with high quality manufacturing and market-leading positions. Cooper continued to refine this acquisition model seeking companies with stable earnings using well-known technologies that served a broad customer base. Furthermore, Cooper focused on firms with high quality products and recognized brand names.

GE has to examine what strategy the firm is going to follow. Will the firm’s

General Electric’s lack of knowledge within foreign markets, because it is unfamiliar with the territory and the business structure, is decreased when the company uses a joint venture. The use of a joint venture in this case decreases the financial and economic risk by not putting so much pressure on General Electric if the company isn’t as successful as General Electric would hope that it could be. A joint venture can be the easiest option when entering into a new market because it allows General Electric to join forces with a company that is already established within the foreign market that General Electric is trying to enter, bringing some knowledge and experience of the foreign market to the table. I think that the global economic crisis of 2008-2009 does have an impact on General Electric’s preference to use joint ventures instead of continuing to use acquisitions or greenfield ventures. The global economic crisis of 2008-2009 may have been an eye opener for General Electric making the company realize that at any point in time the companies that General Electric have put so much time and money into can run into financial problems that could potentially destroy General Electric altogether. Had General Electric

“GE’s commitment to implementing innovative, cost-effective technologies that enhance the customers’ environmental and operating performance.”

13). Halliburton announced in 2014 a consolidation with Baker Hughes, another competitor in their industry (Halliburton And Baker Hughes Reach Agreement to Combine in Stock and Cash Transaction Valued at $34.6 Billion. p. 1). With this consolidation, Halliburton will acquire all assets of Baker Hughes, along with the future subsidiary’s debts. With the uncertainty of the lifetime of the oil industry, and currently facing a significant loss, Halliburton is taking a serious risk facing such a large amount of debt and acquiring Baker Hughes.

Analysis - GE has likely been so successful over the years because of its ability to foresee major trends and capitalize upon them. In the 1960s, for instance, GE was one of the eight major computer companies. Even recently, since 1986, GE has continued to acquire several organizations; portions of NBC, wind manufacturing, universe pictures, aerospace industries, international firms, software and hardware manufacturing, even oil companies abroad. The company culture describes itself as not one company, but many each unit a vast and complex enterprise in and of itself, with a corporate

The two firms generated low profit, as Bertrand competition predicts, until GE ‘changed the rules of the game’ by introducing a price book. The process effectively set a higher market price and guaranteed higher profits, the price publishing behaviour continued successfully until 1975 when the US Department of Justice investigated the industry. Price books were ruled to breach anti-competition laws and the firms were fined. The book, Technology and Transformation in the American Electric Utility Industry by Richard F. Hirsh goes into this example in much greater depth.

Assuming that an arbitrageur holds a long position in Honeywell, then the acquisition news raises the stock price in anticipation of the buyout. However, anticipation of the buyout is not quite equivalent to the consummation of the deal. Capturing profits through arbitrage requires assessing the various components of risk to the merger and judging the likely outcome. The merger appears prima facia a good fit on an operational level, as there is very little overlap of products. Merging two market leaders with vertically complementing products creates bundling synergies that can benefit customers, or facilitate the emergence of an overbearing competitor to crowd out others. GE is already

     When Jack Welch was named CEO of General Electric, Welch saw a company in trouble even though the business world saw GE as an intrinsically healthy corporation, secure in its position as a world industrial leader. Welch knew that the company was too large to fail yet GE was too unwieldy to adapt for further growth. The changes he instituted restructured and revolutionized GE and made Welch the most respected CEO in business today. After reading the book there were three parts that really stood out for me.

Jack Welch’s vision of what GE was possible of gave the company a vision for twenty years while he was the CEO and chairman. He states, “leaders make sure people not only see the vision, they live and breathe it.” (Winning, pg 67) He not only allowed for employees to stretch, but demanded it. In teaching workers to stretch Welch knew that workers “may fail. In fact, they probably will fail. But stretching, and stretching the business, is going to improve performance results.” (Jack Welch on Leadership, pg 105) He also states that “only by setting the performance bar high did it become possible to discover people’s capabilities.” Jack Welch’s emphasis on candor and breaking the bureaucracy of modern business separated him from his contemporaries. He excited others of the possibility of being the biggest and best company in the world and rewarding his best employees that shared the values of GE. According to FORTUNE Editorial Director Geoffrey Colvin In "The Ultimate Manager, Welch leads the annals of management history not for anticipating the new world's changes ahead, but for acting on them: "His great achievement is that having seen it, he faced up to the huge, painful changes it demanded, and made them faster and more emphatically than anyone else in business. He led managers into this new world, which we still inhabit, and just as important, he showed business

• Immelt hoped to adjust organizational structure of GE from the cold, results-oriented focus of Jack Welch, to a more open and less hard-edged architecture. He believed that the major changes that he would initiate at GE would be a result of the changing environment that GE faced and the shifting priorities that it faced.

The response of established utilities to the creation of a Single continent wide market for energy has been to try to acquire utilities in other EU nations in an effort to build systems that serve more than one country. The underlying logic is that larger utilities should be able to realize economies of scale, which would enable them to compete more effectively in a liberalized market. However, some cross- border takeover bids have run into fierce opposition from local politicians who resent their "national energy companies" being taken over by foreign entities. Most notably, when E.ON, the largest German utility, made a bid to acquire Endesa, Spain's largest utility, in 2006, Spanish politicians sought to block the acquisition and keep ownership of Endesa in Spanish hands, imposing conditions on the