Strategic planning and organizational positioning for future vision implementation

General Electric: Analysis of Strategy Implementations and Potential Issues

There are many parts of GE's strategic plan that are interlocked, and thus face some of the same implementation issues. For example, GE's strategy of diversification is essentially interlocked with its objectives of expansion. Through diversification, GE can continue a growth strategy that includes both operational and geographic expansion. As such, the strategic plan to diversify and expand is interlocking dependencies. However, there are a number of implementation issues which could prove a problem for the company in the future in terms of its objectives to diversify and expand. The company is what is known as an "unrelated diversified company" (Allen & Gorgeon, 2007, p 7). GE has been successful in diversifying its operations into new markets; yet, this can be seen as almost being too successful. According to the research, "looking at GE we see a massive, diversified, and profitable conglomerate with a lot of very good but very unrelated businesses," (Barron, 2011). Essentially, GE's strategic plan has moved into too many fields without having some sort of streamlined foundation holding them all in place. Thus, future diversification and expansion will ultimately fall into the same trap. The company will simply spread itself too thin, costing unnecessary costs in operations and resources needed to succeed in so many different and unique markets.

To address these interlocking implementation issues, GE needs to streamline its operations in order to better handle its presence in so many markets. It is essential that GE seek "to find a coherent path of profitable growth as it takes on new challenges" (Allen & Gorgeon, 2007, p 1). GE must reorganize part of its strategy in order to show a sense of related diversification that promotes greater synergy within the company. Part of reaching this related diversification is exercising the company's strategic relationships within the supply chain, value chain, and internal organization. It is these relationships that will help reorganize the company's unrelated structure to a more streamlined notion. As such, "the goal of the related diversification is to exploit competitive advantages arising from the relationships between its different business activities -- these are known as synergies. Synergies emerge when the joint effect of merged activities is greater than the sum of the separate events," (Allen & Gorgeon, 2007, p 8).

In order to address the implementation issues, there is another interlocking factor within the strategic plan of GE. Stronger financial governance and power within its many marketplaces is an additional strategy, especially after the company was hit hard by the financial recession of 2008. Since its revenue and stock numbers plummeted in 2008, the company has been striving to regain some of its financial power. With a stronger financial stance, it would then be able to address any implementation issues in diversifying and expanding, two other interlocking elements of the company's underlying corporate strategic plan. Still, this has been incredibly difficult for the company to handle, and several implementation issues have shown themselves as major problems. As the company tries to regain stronger footing, it is finding a much different market than what was the case before the recession. Here, the research suggests that "since the financial collapse, investors are far more risk averse and naturally so […] looking at GE with all of its subsidiaries and a balance sheet that includes a very large financial component ($322 billion in receivables for GE capitol alone), its easy to see why investors have said 'why bother' over the past decade" (Barron, 2011). The current financial state of the company is too much of a mess for many investors to risk their worrisome investments. Many of the company's subsidiaries are in their own financial trouble as well, which causes risk to the entire company as a whole.