Question 1
Jeffery Immelt’s organic growth strategy was a future direction and tool for GE. Immelt identified that GE needed to show technical leadership and start developing innovations that can generate $1 billion for the company within a few years. The thought behind the organization’s growth strategy was that by shifting focus from internal processes at GE to customer requirements, GE would be able to develop innovations that are needed in coming years. At the time Immelt became the CEO the global economy faced a downturn with the 9/11 attacks and several internet businesses going bust. Also, Immelt strongly opposed the thought of start-ups building technologies and selling them for millions to large corporations. Rather, Immelt wanted GE to retain its heritage and develop new technologies and innovations themselves. Immelt believed that GE has become too internally focused and needed a change as other corporations were becoming customer focused. Under Immelt’s though process, developing new technologies and charging premium from customers would help large corporations such as GE to outperform the underlying economic growth rate consistently.
Question 2.
The previous reign of Jack Welch had been highly successful in terms growth and profit. The company and shareholders expected similar standards from Immelt and he understood the inside of GE and the outside aspect of the changing industry. Immelt planned changes as he knew that the company could save millions by developing their own technological breakthroughs, rather than by investing in new technologies and innovations. Also, Immelt made several changes by creating new positions and hiring people from outside to ensure minds were working towards organic growth strategy. By setting up a Global Research Centre and making people work for IB, Immelt clearly outlined the future plans for GE. By investing in talent and developing technology, Immelt was aiming to break the trend of acquisition and save GE money. In addition, the knowledge gained by GE employees from developing and nurturing technology had its own value as it would help GE to drive innovation and serve their customers better.
Question 3.
Question 4.
In case of Hybrid, GE needs to play the long term game as the technology is ahead of its time. The smart money is one maintaining the project with a global research centre where the technology can be further developed and the company can keep selling engines. By placing the Hybrid project at global research centre the company would have more time to develop batteries. GE cannot shelve the project as the battery technology can play a major role in the industry in the future and can be useful in supporting and related industries that can help GE maintain competitive advantage and industry leadership.
