General Electric Co.'s Current Situation and Future Outlook

A review of the         General Electric Co.'s current situation and future outlook

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Abstract

General Electric serves different markets across the world. To do so, different suppliers throughout the world fuel them. Most importantly, five top suppliers will be discussed throughout this part. On the other hand, this global power does pose some challenges in the face of General Electric that push against them including some political threats following President Trump's election. We will as well have the chance to discover how GE is undergoing a major mutation, pivoting back to industrials. Moreover, some recommendations are encouraged for General Electric to apply so that they could leverage these challenges into their favor.

Contents

INTRODUCTION        4

I.        Mission, Vision, strategy and goals        5

II.        GE's portfolio in 2017        5

III.        Relationship with suppliers and markets in which it operates        6

1.        Chain suppliers        6

2.        Creating value through strategic sourcing        7

3.        GE’s Suppliers' Responsibilities        8

4.        Markets in which GE performs        8

IV.        2015-2016: A busy year for GE covering a range of split-ups, expenditures and other transformations        16

1.        Why did GE sold its appliances business to the Chinese manufacturer?        16

2.        Why did GE engage in an industrial internet business (the digital shift)?        16

3.        A relocation that aims at returning to former industrial roots        17

V.        GE's response to potential threats and future challenges        17

1.        The aftermath of Trump's election backed by the global economic stagnation        17

2.        Divergent opinions concerning Immelt's tenure        19

VI.        Recommendations for General Electric        20

CONCLUSION        21

References        22

List of tables

Table 1: An outline of GE's targets for 2017        

List of figures

Figure 1: The GE store        

Figure 2: Global Competitiveness Index 2016-2017 rankings and 2015-2016 comparisons        

Figure 3: United States Global Competitive Index        

Figure 4: Hong Kong Global Competitive Index        

Figure 5: China Global Competitive Index        

Figure 6: GE's future digital activity        

Figure 7: The Trans-Pacific Partnership (TPP)        

Figure 8: The signing of the travel ban policy by Pr. Trump        

INTRODUCTION

The General Electric Co. (GE) is one of the most diversified international conglomerate corporation based in Boston, Massachusetts (US), and offering technological and financial services worldwide (approximately 175 countries). According to its annual report for the year 2016, the 305,000 employees company was able to generate an increasing $123.7 billion revenue, as well as an operating income of $9.03 billion and a $8.83 billion net income. In the same year, GE has been featured in the Fortune 500 for the 22nd year, ranking 11th this time. The company founded 125 years ago is today traded on the NYSE, DJIA, S&P 100 and S&P 500. It is currently almost the sole company that was listed in the early formed DJIA, along with 12 other companies, and that is still being stared. One important key figure at GE is with no doubt Jeffrey Immelt, the CEO and chairman of the board, who took over Jack Welsh's after the former retired in 2001 (GE's website, 2017). How is the company operating in effect? What challenges is it facing in 2017? What type of decisions is Immelt lately making? Which strategies should best be adopted to protect the conglomerate's future? Those questions and many other are going to be approached in this paper.

1. Mission, Vision, strategy and goals

The manufacturer has always striven to restate its mission and vision, strategies and goals, in order to remain a leader on the market. Its new mission is subsequently to " build, move, power and cure the world", whereas the updated view is "to focus on businesses that connect to its core competencies and where it is a market leader in" (Stephans, 2016). As we are going to see in this integrated paper, the strategy of General Electric is currently remolding their portfolio by quitting businesses that it judges non-core or under-doing the market. Such a shift would contribute in the repositioning of the company as a concentrated industrial business instead of a global manufacturer or conglomerate. Through this latest strategic portfolio move , GE aims to create 75% of operating EPS from industrial activities, redeeming this way $50 billion to shareholders that would be reinvested in the business to expand margins and returns.

Table 1: An outline of GE's targets for 2017

Data source: General Electric Company presentation,2017

1. GE's portfolio in 2017

One of the company's renowned founders is surely Thomas Edison, whose interests dragged the company along the electricity- aligned path. Presently, the manufacturer is engrossed in the production of other than electric light bulbs. Products include for instance: aircraft engines, energy, gas, locomotives, electric motors, lighting, electrical distribution,  weapons, energy, oil, health care, finance, software, water, wind turbines etc which features in a bunch of subsidiaries: General Electric Health-care, Oil, Aviation, Capital, Transportation, Global Research, Digital, Energy Connections and finally, Gas.