Case Study Description of GE's Growth Strategy: The Immelt Initiative
Follows the actions of GE CEO, Jeff Immelt, as he implements a growth strategy for the $150 billion company in a tough business environment. In four years, he reinvigorates GE's technology, expands its services, develops a commercial focus, pushes developing countries, and backs "unstoppable trends" to realign GE's business portfolio around growth platforms. At the same time, he reorganizes the company, promotes "growth leaders" into top roles, and reorients the culture around innovation and risk taking. Finally, in 2006, he sees signs of growth, but wonders whether it is sustainable.
Swot Analysis of "GE's Growth Strategy: The Immelt Initiative" written by Christopher A. Bartlett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ge's Immelt facing as an external strategic factors. Some of the topics covered in GE's Growth Strategy: The Immelt Initiative case study are - Strategic Management Strategies, Cross-cultural management, Growth strategy, Leadership, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the GE's Growth Strategy: The Immelt Initiative casestudy better are - – increasing transportation and logistics costs, increasing commodity prices, increasing energy prices, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, technology disruption,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of GE's Growth Strategy: The Immelt Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GE's Growth Strategy: The Immelt Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ge's Immelt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ge's Immelt 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 GE's Growth Strategy: The Immelt Initiative can be done for the following purposes –
1. Strategic planning using facts provided in GE's Growth Strategy: The Immelt Initiative case study
2. Improving business portfolio management of Ge's Immelt
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ge's Immelt
Strengths GE's Growth Strategy: The Immelt Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ge's Immelt in GE's Growth Strategy: The Immelt Initiative Harvard Business Review case study are -
Successful track record of launching new products
– Ge's Immelt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ge's Immelt 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.
Low bargaining power of suppliers
– Suppliers of Ge's Immelt in the sector have low bargaining power. GE's Growth Strategy: The Immelt Initiative has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ge's Immelt to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Ge's Immelt is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Christopher A. Bartlett can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ge's Immelt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ge's Immelt 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.
Highly skilled collaborators
– Ge's Immelt has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in GE's Growth Strategy: The Immelt Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– GE's Growth Strategy: The Immelt Initiative firm has clearly differentiated products in the market place. This has enabled Ge's Immelt to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ge's Immelt to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Ge's Immelt is one of the leading recruiters in the industry. Managers in the GE's Growth Strategy: The Immelt Initiative are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Ge's Immelt is one of the most innovative firm in sector. Manager in GE's Growth Strategy: The Immelt Initiative Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Ge's Immelt is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ge's Immelt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GE's Growth Strategy: The Immelt Initiative Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Ge's Immelt
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ge's Immelt does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Ge's Immelt are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High switching costs
– The high switching costs that Ge's Immelt 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.
Weaknesses GE's Growth Strategy: The Immelt Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GE's Growth Strategy: The Immelt Initiative are -
High operating costs
– Compare to the competitors, firm in the HBR case study GE's Growth Strategy: The Immelt Initiative has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ge's Immelt 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ge's Immelt supply chain. Even after few cautionary changes mentioned in the HBR case study - GE's Growth Strategy: The Immelt Initiative, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ge's Immelt vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Ge's Immelt has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ge's Immelt even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Ge's Immelt is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ge's Immelt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ge's Immelt to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Ge's Immelt 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.
Need for greater diversity
– Ge's Immelt has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Ge's Immelt, firm in the HBR case study GE's Growth Strategy: The Immelt Initiative needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study GE's Growth Strategy: The Immelt Initiative, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ge's Immelt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GE's Growth Strategy: The Immelt Initiative can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Ge's Immelt has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to strategic competitive environment developments
– As GE's Growth Strategy: The Immelt Initiative HBR case study mentions - Ge's Immelt takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities GE's Growth Strategy: The Immelt Initiative | 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 GE's Growth Strategy: The Immelt Initiative are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ge's Immelt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Ge's Immelt 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 GE's Growth Strategy: The Immelt Initiative - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ge's Immelt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Ge's Immelt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Ge's Immelt can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Building a culture of innovation
– managers at Ge's Immelt 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 Strategy & Execution segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ge's Immelt 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 Ge's Immelt to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Ge's Immelt has opened avenues for new revenue streams for the organization in the industry. This can help Ge's Immelt to build a more holistic ecosystem as suggested in the GE's Growth Strategy: The Immelt Initiative case study. Ge's Immelt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ge's Immelt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Ge's Immelt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GE's Growth Strategy: The Immelt Initiative suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ge's Immelt can use these opportunities to build new business models that can help the communities that Ge's Immelt operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Ge's Immelt to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Ge's Immelt can develop new processes and procedures in Strategy & Execution 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.
Loyalty marketing
– Ge's Immelt has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats GE's Growth Strategy: The Immelt Initiative External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GE's Growth Strategy: The Immelt Initiative are -
Regulatory challenges
– Ge's Immelt 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ge's Immelt in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ge's Immelt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ge's Immelt needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Ge's Immelt 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.
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 Ge's Immelt in the Strategy & Execution sector and impact the bottomline 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.
Environmental challenges
– Ge's Immelt needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ge's Immelt can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Ge's Immelt high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Ge's Immelt
– 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 Ge's Immelt.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ge's Immelt business can come under increasing regulations regarding data privacy, data security, etc.
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 Ge's Immelt.
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.
Weighted SWOT Analysis of GE's Growth Strategy: The Immelt Initiative 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 GE's Growth Strategy: The Immelt Initiative 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 GE's Growth Strategy: The Immelt Initiative 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 GE's Growth Strategy: The Immelt Initiative 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 GE's Growth Strategy: The Immelt Initiative 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 Ge's Immelt needs to make to build a sustainable competitive advantage.