General Electric was founded in 1878 and became a firm in1890 when Thomas Edison combined his different business ventures ("Thomas Edison & GE"). During this time the Thomson-Houston Company was a competitor with GE. When each of the businesses began to grow neither company was having much success in creating electrical installations with their individual patents and technologies. By1892, the Thomson-Houston Company and GE were merged together ("Thomas Edison & GE"). The new company became the General Electric Company ("Thomas Edison & GE").
The company has been responsible for the development of the first iridescent light bulb. In addition the company was responsible for the creation of the first x-ray machine. Throughout the years the company has played a role in much historical advancement including the electric toaster (1905), commercial finance (1905), first radio broadcast (1906), electric locomotives (1908), the vacuum tube (1912) and Resins (1912). In addition to these historical inventions that changed society forever the company also became one of the first to offer consumers household appliances such as the dishwasher and the refrigerator.
At the current time GE's main market is the United States, although the company has a presence in various markets throughout the world in places such as China, Kenya Australia, Russia and the United Kingdom. Although all of the company's businesses are critical and important, GE has become particularly committed to healthcare on a global scale with the Developing Health Globally and the Healthimagination program. The Healthimagination program was created in 2009. The purpose of this initiative was to "drive a step change in efficiencies in healthcare, enabling more rapid diagnosis, improved patient experiences, increased access and better outcomes. Healthymagination is a business strategy aimed at realizing the new opportunities we see in healthcare from broadening access and reducing cost. It is mainly focused on GE's $16 billion healthcare business, but it also draws in GE Finance products and NBC Universal's ability to reach consumers with health-related information (Healthymagination)."
Since its inception the company has been well respected for its innovations and for the success of the company from a business standpoint. As a company GE has been an anchor for the business world and a pioneer in carrying out business strategies successfully. Of particular importance has been the leadership of GE. According to the company,
"GE's leaders through the years have built a diverse portfolio of leading businesses; a stream of powerful company-wide initiatives that drives growth and reduces cost; financial strength and Controllership that allow it to capitalize on opportunities through numerous cycles; and a set of common values that allows it to face any environment with confidence ("Thomas Edison & GE").
Among the company's most infamous CEO's was Jack Welch who served in the position from 1981 until 2001 (Waters). Jack Welch is revered for the manner in which he revived the company. At the time Welch entered GE as CEO, the company was having major problems including too much bureaucracy and elitism among top managers (Welch). Welch was able to transform the company by greatly reducing bureaucracy and being resolute concerning GE's businesses being in the leading two positions in their respective fields (Welch). In addition, Welch emphasized the importance of entrepreneurship and a quick approach to competition and constant improvement. Welch was also committed to building competency in people who worked for GE. In handling the company in this manner Welch was utilizing a small-company approach as it related to operating a large multi-billion-dollar organization, and he was successful in this endeavor (Welch). Welch continues to be one of the most revered CEO's in American business and his management strategies have become the benchmark for American business.
GE's direct competitors include Citigroup, Inc. (C), Koninklijke Philips Electronics NV (PHG), and Siemens AG (SI). The following is a depiction of the differences between GE and the aforementioned competitors.
GE is the leader in the conglomerate industry. Although the company has experienced some difficulty in recent years it has maintained the competitive advantage.
One of the primary strengths of GE is the company's good reputation amongst customers. The company has developed a good reputation over time and its products and services are known to be durable and innovative. Along these lines the company also has a strong brand name. As one of the oldest businesses in the country, the GE brand is automatically recognizable and it is trusted.
Another internal strength for GE is research and development. As previously stated the company was built on innovation and has long been a pioneer in the creation of new products that have transformed the way that people live. GE continues to be at the forefront of research and development as it pertains to current needs such as the powering of electric cars and other initiatives that encourage the development of environmentally friendly products.
GE also has internal strength related to diversification and the many businesses that the company manages. Diversification is important because it gives the company leverage when one of the businesses is not doing well, the other businesses can balance out the losses that the company may experience. Diversification is particularly important during difficult economic times.
One of the major weaknesses of GE at the current time has to do with one segment of the business known as GE financial. This aspect of the business is suffering as a result of the overall economic environment. The downturn in this business segment has affected the overall company.
One of the consequences of the problems with the financial segment of the company has been a decline in profitability for the company which is another weakness. According to an article entitled "GE's Immelt gets no respect,"
"GE still hasn't restored the respect needed to avoid pitching and yawing every time it reports earnings. Revenue is still weak, down 5% from a year ago. The foreclosure crisis raises fresh concerns about GE's exposure to the latest chapter in the mortgage market meltdown…And then there's the bottom line itself: GE's third-quarter net income fell 18%. Sure, it includes a $1 billion one-time charge, but it's still the bottom line, and it's still down from a year ago ("GE's Immelt gets no respect")."
The primary opportunity present for GE is acquisitions in various sectors including healthcare and financial services and energy. As it pertains to the energy sector "General Electric Co aims to focus its takeover spending on makers of equipment used in oil and natural gas production ("GE CEO keen on oil, gas deals")." Malone (2010) reports that the company has already attempted to acquire Wellstream Holdings which rejected a $1.2 billion offer from GE. Although this acquisition did not occur GE did acquire Dresser Inc. For $3 billion. Dresser Inc. This is an opportunity that would lead to the much needed expansion of the company and will provide significant opportunities for the company in the future.
According to the company's annual report GE also sees opportunities in the area of emerging markets. Certain areas of Africa and India are growing and developing in terms of the economy and infrastructure growth. As a result GE has an opportunity to invest in these emerging markets. The annual report explains that "GE is finding opportunities in regions rich with commodities and people. In the case of our Oil & Gas business, meeting rising demand and maintaining energy security means opening up new production frontiers with reliable technology that minimizes risk, drives production efficiency and helps address environmental sustainability. Over the next three years, GE Oil & Gas will invest more than $500 million on R&D, much of it on products for emerging markets (GE Annual Report, 2009)."
At the current time, a major threat to GE is the global economic crisis. Like many corporations GE is grappling with the slow growth of the economy and all of the ramifications that are the result of this sluggish economy. Some of the acquisitions that the company is currently making may aid the company in dealing with this thread. However, GE will have to wait for the economy to recover before this thread will truly subside.
Another major threat is the presence of substitute products. At the current time, many of the products once exclusive to GE are now offered by many of the firm's competitors. This is a major threat to GE because many of these products cost less than the products produced by GE and the quality of the products is about the same. This coupled with difficult economic times is a significant threat because consumers are looking for low priced alternatives, particularly as it pertains to large purchases such as appliances.
Overall GE has many strength but is must also seek to remedy the weaknesses that exist within the company. The company must also seek to understand the opportunities that exist and develop strategies that will allow the company to benefit from those opportunities. The threat of substitutes is a substantial issue…