GE\'s Growth Strategy When Jeff

GE's Growth Strategy

When Jeff Immelt took over as CEO of GE in 1981, his approach was different than that of the previous CEO, Jack Welch. In the past, GE was used to double digit growth under Welch's leadership, but 911 happened only four days after Immelt took the reins and his company, along with many others in the United States began to suffer from slow growth. Immelt did not change the business model that GE ran on, but he did want to make the company more diverse. He focused more on the company's strengths than its weaknesses. Whereas Welch stayed with the status quo and was successful, we were now living in different times and Immelt wanted to invest in high technology companies, which is something that hadn't been done in the past.

Both Welch and Immelt faced similar tasks. They seemed different because they were on different ends of the spectrum where Welch had to work hard to maintain the company's double digit growth for years, Immelt was faced with creating new ventures that would bring the company back into double digit profits. Immelt began investing in other businesses to expand on GE's growth. This may have not seemed like the best strategy to most when the economy was headed downward, but Immelt was forward thinking. He also made a very large investment in Research and Development (R&D) because he believed that the engineers needed more support in order to reach their full potential which would only benefit the company.

Immelt set broad objectives for the company. He knew that because of the Enron and Tyco scandals CEO's were not viewed as highly as they had been in the past. He knew that he had to work hard to establish trust among people and he wanted the GE work environment to be more open and less structured as it had been in the past. He wanted to place a high focus on social responsibility in addition to company earnings. He needed the public and his employees to know that he along with his company could be trusted and that nothing would happen like what happened at Enron or Tyco.

In order to make the company successful and create a good image, Immelt had to do some rebuilding. He first had to rebalance the company's portfolio which included investing in media companies in order to be positioned for the digital future. Next, he wanted to place a high priority on servicing the customers through hiring a strong marketing team familiar with customer needs. He knew he had create new processes within the company and began adding platforms such as bioscience and film/DVD to the company. They also expanded into the Hispanic television arena by revamping Telemundo and helping the ailing television station become profitable.

Immelt also did many other things to diversify and increase the profit margin of GE. With the company being as such a large, global conglomerate it is sometimes difficult to outperform in the market, but Immelt proved that this could be done. Under Welch's leadership, the company focused on a few things and did them very well. Well enough that the company constantly outperformed and saw increases in the double digits many times.