Diversification Strategies

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

Novartis, a large multinational pharmaceutical company, recently diversified by buying Alcon, in a £24.8bn deal. Alcon is a producer of eye care products such as contact lenses. Google has diversified by investing £124m in a wind power business. To what extent is diversification the best strategy to achieve profitable growth? Justify your answer with reference to Novartis, Google and/ or other organisations that you know. (40 marks)

The long-term strategies of a firm can be negatively affected if it is pursuing a diversification strategy. Rather than improving upon the factors that led to its competitive advantage, management focuses on running a diversified company, which could result in the company losing its core business advantage and severely hampering the future success of the firm. Opportunities in Going Public

A company with a business diversification consistently grew its profit by developing a diversified expansion plan beyond its core boundary compares to a new initiative. Repeatability allows a company to learn the mistakes made and support the systematic growth of the business a complex process. (Zook and Allen, 2003)

Canadian General Electric Co. Limited (CGE) was incorporated in Canada in 1892 at the same time Edison Electric Light Company and Thomson-Houston Electric Light Company merge into General Electric (GE) which continues to the present day as a major international conglomerate. GE is investing in software and analytics, healthcare, energy, lighting and bio-energy systems, and advance manufacturing and enterprise. With each investment, the company strategy to grow and enhance productivity and reduce environmental impact at a global scale becomes apparent. At GE, research and development has been the cornerstone of innovation for over a century. GE has approximately 36,000 technicians that are used to solve some of the world’s toughest problems

At financial segment, the competition is very strong. GE is late start at this segment, in the other words, GE is a follower. But at infrastructure segment, the threat is lot of smaller than financials threat. Because of GE is huge, GE is the few company which has multiple industry to performance at multiple performance.

General Electric is a well-known company in many regions of the world, but what people aren’t particularly aware of are the steps that General Electric has taken to get to where it is at today. When I think of General Electric the first thing that comes to mind is the role that the company plays in the production of household appliances, but General Electric is a much bigger contributor to people’s lives than is most people realize. People aren’t familiar with the internal business decisions that General Electric makes to ensure that the company continues to grow and run as smoothly as possible, allowing the company to continue to provide people with the services that they have grown to recognize as being a trademark of General Electric.

There are multitudes of cultures in businesses creating diverse working conditions in companies large and small. Therefore in management it is vital for leaders to be diverse in their management and communication techniques. Because each individual is uniquely different, it is essential that managers understand their role in creating peaceful working environments with effective communication, compassion and understanding for each worker’s background. This paper will outline topics such as; the importance of effective communication, employee development and coaching. It will also analyze different management styles and discuss why each manager should mix

Background Information- General Electric Company, known as GE the world over, is an American-based, multinational corporation headquartered in Connecticut. In 2010, the company reported in excess of $150 billion in revenues, net income of over $12 billion, and almost 300,000 employees. It operates through four basic segments: Energy, Technology Infrastructure, Capital Finance and Consumer and Industrial Production. In 2011, GE was ranked the 6th largest firm in the United States as well as the 14th most profitable. Since its founding by Thomas Edison in 1990, and becoming one of the original 12 companies listed on the Down Jones Industrial Average in 1986, GE has been iconic in its relationship as an American innovator. In fact, GE founded RCA in 1919 to further the use and disbursement of international radio, just one example of their early commitment to innovation (GE Fact Sheet, 2012).

3. Develop strategies at below mentioned various levels of organization to gain competitive advantages and sustainability for a new business that you suggest Countdown NZ supermarket to develop. (16marks)

GE’s corporate strategy is one of moderate to high level of diversification. More specifically one that is related linked. Most people call them a conglomerate or a company made up of very different companies all operating in different industries. However GE’s CEO Jeff Immelt sees it differently. He doesn’t see a conglomerate he sees a company that is diversified over many industries, but one that works together towards a common goal. You can see that in the way that research and development in one of their industries is used to improve their product or service in a different part of the company. By having all of these differentiated industries working together under the name of GE they have been very successful company. Now the situation is changing. People are seeing GE struggle especially GE Capital. To make

GE current level of diversification is relatively high. Previously, GE had focused on three divisions which are power system, technical products and consumer product. (Barlett, C.A., M. Wozay, 2005) Although GE is one of the worlds most diversified companies, the management sector had been plagued. GE in 1960s had high sales growth but low profit growth. (K.Hall, 1978)

GE was founded in 1878. It has grown multi folds since the time of inception. It has been named as “Most Admired Company in Us” and “Most Admired Company in the World”. It has companies in the field of electricity production, electric appliance, lighting, aircraft engines, medical system, and diesel locomotives. GE has 43 independent SBU (Strategic Business Unit). Despite all these variations available there was steadfast growth in the company. The management practices in GE were considered as bellwether of American management practices. This was due to the procedures adopted by Jack Welsh.

Diversification as a business strategy has a number of advantages. Diversified firms experience more stable cash flows, gain more market knowledge and when they are able to tie their different products together can often experience synergies as well. When diversification fails, however, it can drain a company's finances and create a distraction within the organization. Some firms struggle with diversification, trying to branch out from their core business repeatedly, but never being as successful in the new businesses as they are in their core business. This paper will look at two successful companies and examine some of their diversification efforts. Amazon was able to expand its product line significantly, adding dozens of product lines on top of its core lines of books and movies. Starbucks, for all its success, has struggled at times with diversification efforts. It has pulled out of markets like Australia and Israel (Mercer, 2008). It struggled with the introduction of hot food, and its attempts to branch out into music were not nearly as successful as senior management had hoped they would be.

General Electric, known for the 9 Box Matrix or McKinsey - GE Matrix for growth share strategy developed in late 70s, was continually working on improving its growth capabilities. These strategies helped GE to identify and sell off