CEO Compensation at GE: A Decade with Jeff Immelt SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CEO Compensation at GE: A Decade with Jeff Immelt
When ISS, a large shareholder advisory group, recommended a "no" vote on Jeff Immelt's award of 2 million stock options in April 2011, GE's compensation committee had to decide whether to rescind or amend the award or ignore the ISS recommendation. Was Immelt's 2010 pay in line with his performance? How would shareholders vote on the advisory "say on pay" ballot question at GE's annual meeting in April?
Swot Analysis of "CEO Compensation at GE: A Decade with Jeff Immelt" written by V.G. Narayanan, Lisa Brem includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Immelt's Iss facing as an external strategic factors. Some of the topics covered in CEO Compensation at GE: A Decade with Jeff Immelt case study are - Strategic Management Strategies, Executive compensation and Organizational Development.
Some of the macro environment factors that can be used to understand the CEO Compensation at GE: A Decade with Jeff Immelt casestudy better are - – supply chains are disrupted by pandemic , increasing commodity prices, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions, there is increasing trade war between United States & China, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of CEO Compensation at GE: A Decade with Jeff Immelt
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CEO Compensation at GE: A Decade with Jeff Immelt case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Immelt's Iss, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Immelt's Iss operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of CEO Compensation at GE: A Decade with Jeff Immelt can be done for the following purposes –
1. Strategic planning using facts provided in CEO Compensation at GE: A Decade with Jeff Immelt case study
2. Improving business portfolio management of Immelt's Iss
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Immelt's Iss
Strengths CEO Compensation at GE: A Decade with Jeff Immelt | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Immelt's Iss in CEO Compensation at GE: A Decade with Jeff Immelt Harvard Business Review case study are -
Diverse revenue streams
– Immelt's Iss is present in almost all the verticals within the industry. This has provided firm in CEO Compensation at GE: A Decade with Jeff Immelt case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the CEO Compensation at GE: A Decade with Jeff Immelt Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Immelt's Iss is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Organizational Development field
– Immelt's Iss is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Immelt's Iss in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Organizational Development industry
– CEO Compensation at GE: A Decade with Jeff Immelt firm has clearly differentiated products in the market place. This has enabled Immelt's Iss to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Immelt's Iss to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Immelt's Iss has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Immelt's Iss has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Immelt's Iss has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Immelt's Iss has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Immelt's Iss to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Immelt's Iss digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Immelt's Iss has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Effective Research and Development (R&D)
– Immelt's Iss has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study CEO Compensation at GE: A Decade with Jeff Immelt - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Immelt's Iss in the sector have low bargaining power. CEO Compensation at GE: A Decade with Jeff Immelt has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Immelt's Iss to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Immelt's Iss
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Immelt's Iss does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses CEO Compensation at GE: A Decade with Jeff Immelt | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEO Compensation at GE: A Decade with Jeff Immelt are -
Workers concerns about automation
– As automation is fast increasing in the segment, Immelt's Iss needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Immelt's Iss has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study CEO Compensation at GE: A Decade with Jeff Immelt, in the dynamic environment Immelt's Iss has struggled to respond to the nimble upstart competition. Immelt's Iss has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Immelt's Iss has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - CEO Compensation at GE: A Decade with Jeff Immelt should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study CEO Compensation at GE: A Decade with Jeff Immelt that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case CEO Compensation at GE: A Decade with Jeff Immelt can leverage the sales team experience to cultivate customer relationships as Immelt's Iss is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the CEO Compensation at GE: A Decade with Jeff Immelt HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Immelt's Iss has relatively successful track record of launching new products.
High cash cycle compare to competitors
Immelt's Iss has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Immelt's Iss is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CEO Compensation at GE: A Decade with Jeff Immelt can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Immelt's Iss, firm in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, V.G. Narayanan, Lisa Brem suggests that, Immelt's Iss is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities CEO Compensation at GE: A Decade with Jeff Immelt | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study CEO Compensation at GE: A Decade with Jeff Immelt are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Immelt's Iss can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, CEO Compensation at GE: A Decade with Jeff Immelt, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Immelt's Iss can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Immelt's Iss to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Immelt's Iss can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Immelt's Iss has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study CEO Compensation at GE: A Decade with Jeff Immelt - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Immelt's Iss to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Immelt's Iss to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Immelt's Iss to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Immelt's Iss in the consumer business. Now Immelt's Iss can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Immelt's Iss can use these opportunities to build new business models that can help the communities that Immelt's Iss operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Better consumer reach
– The expansion of the 5G network will help Immelt's Iss to increase its market reach. Immelt's Iss will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Immelt's Iss has opened avenues for new revenue streams for the organization in the industry. This can help Immelt's Iss to build a more holistic ecosystem as suggested in the CEO Compensation at GE: A Decade with Jeff Immelt case study. Immelt's Iss can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Immelt's Iss can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Developing new processes and practices
– Immelt's Iss can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Immelt's Iss can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats CEO Compensation at GE: A Decade with Jeff Immelt External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt are -
Consumer confidence and its impact on Immelt's Iss demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Immelt's Iss can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Immelt's Iss
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Immelt's Iss.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Immelt's Iss with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Immelt's Iss will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Immelt's Iss needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Immelt's Iss.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Immelt's Iss in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Immelt's Iss is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Immelt's Iss needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Immelt's Iss has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Immelt's Iss needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of CEO Compensation at GE: A Decade with Jeff Immelt Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study CEO Compensation at GE: A Decade with Jeff Immelt is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study CEO Compensation at GE: A Decade with Jeff Immelt is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of CEO Compensation at GE: A Decade with Jeff Immelt is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Immelt's Iss needs to make to build a sustainable competitive advantage.