Industry Leader Profile: General Electric Company (GE)
General Electric Company (GE) is the world's largest diversified services company, ranging from aircraft engines and power-generation equipment to financial services, and from medical imaging and television programmes to plastics; GE is committed to creating a better life through multiple technologies and services. GE operates in more than 100 countries worldwide and employs nearly 300,000 people globally. Mr Jeff Immelt succeeded Jack Welch as Chairman and CEO of GE on 7 September 2001.
The history of General Electric can be traced back to Thomas Edison, who founded the Edison Electric Light Company in 1878. In 1892, the Edison Electric Light Company and the Thomson-Houston Electric Company merged to form General Electric Company (GE). GE is the only company that has remained on the Dow Jones Industrial Average since its inception in 1896.
Seven growth engines generate 85% of profits: the Consumer Finance Group, Commercial Finance Group, Energy Group, Healthcare Group, Infrastructure Group, NBC Universal and Transportation Group; four cash-growth points continuously generate cash flow and earnings in a growing economic environment: the Advanced Materials Group, Consumer & Industrial Products Group, Equipment Services Group and Insurance Group.
Subsidiaries: GE Capital, GE Aviation Financial Services, GE Commercial Finance, GE Energy Financial Services, GE Money, GE Foundation, GE Infrastructure, GE Aviation, GE Enterprise Solutions, GE Healthcare, GE Transportation, GE Energy Infrastructure, GE Water & Process Technologies, GE Oil & Gas, GE Energy, GE Consumer & Industrial, GE Appliances, GE Lighting, GE Power Distribution.
GE is committed to continuous innovation, invention and reinvention, turning ideas into leading products and services. GE is composed of four business groups, each comprising multiple divisions that grow together. GE's business drives global economic development and improves people's living conditions. GE's four global research centres attract the world's finest technical talent, and more than 3,000 researchers are working to create a new generation of technological innovation.
In addition, many factors need to be considered in practical engineering applications.
Among technology stocks, General Electric's historical market capitalisation was the second largest after Microsoft; at one point GE's market cap exceeded 580 billion US dollars, and at its intraday peak surpassed 600 billion US dollars, making it one of only three companies in history - together with Microsoft and Apple - to exceed 600 billion US dollars; adjusted for inflation, its highest peak is equivalent to 829.3 billion US dollars in 2012 terms.
This electrical company was formed in 1892 with funding from J.P. Morgan (the elder) through the merger of three companies including the Edison General Electric Company and the Thomson-Houston International Electric Company. During the two World Wars the company profited enormously from the wars and developed rapidly. After the First World War, the company dominated the emerging electrical-engineering sector of radio. The Second World War again caused GE's output and profits to grow sharply.
In the more than 80 years after its founding, General Electric annexed many domestic and foreign enterprises in various ways and acquired stakes in many companies. In 1939 it had only about 30 factories under its control in the United States, but by 1947 this had increased to 125, and by the end of 1976 it owned 224 manufacturing plants in 35 US states. Abroad, it gradually merged electrical-engineering enterprises in Italy, France, Germany, Belgium, Switzerland, the United Kingdom, Spain and other countries. In 1972 its foreign subsidiaries numbered: 33 in Europe, 10 in Canada, 24 in Latin America, 11 in Asia, 3 in Australia and 1 in Africa. By the end of 1976 it owned 113 manufacturing plants in 24 countries, becoming a vast multinational corporation.
In addition, this technology also has wide application and practice in related fields.
In 2015, GE announced it would shrink its financial business and return to being an industrial company with manufacturing as its mainstay [1], planning to reduce the proportion of the financial business to 10% by 2018.
GE opened the GE website in the United States in 1996. The marketing philosophy adopted in its design is based on a B2C operating model, with 6-8 leading appliances as promotion targets; it aims to win customers who are mainly the roughly 25% of newly formed households, while also serving other customers who replace or add individual products. After several overall structural adjustments, it has now become a large e-commerce website offering online sales, online design, and online consultation and service. The following is a concrete analysis of GE's online marketing strategy.
In addition, many factors need to be considered in practical engineering applications.
The GE website is first-rate in terms of information release, channel building and service models. First of all, the website is not simply positioned on external forms such as 'B2B', 'B2C' and 'B2G', but rather on customer groups. Therefore, the website is designed according to categories such as 'Individuals', 'Families', 'Small Businesses', 'Companies', 'Industrial Solutions', 'GE Businesses' and 'Global Services'.
In addition, many factors need to be considered in practical engineering applications.
As early as 1906, GE began to develop trade with China and was one of the most active and influential foreign companies in China at the time. In 1908, GE established its first light-bulb factory in Shenyang. In 1934, GE acquired Andersen Meyer & Co. and began providing installation and maintenance services for imported electrical equipment in China. In 1979, GE re-established trade relations with the People's Republic of China. In 1991, its first joint venture, GE Hangwei Medical Systems Co., Ltd., was established in Beijing.
To date, all of GE's industrial product groups have conducted business in China, with more than 12,300 employees, and GE has established over 50 operating entities. As the market has gradually opened following China's accession to the WTO, GE's financial business is also actively seeking opportunities to develop in China. In 2005 GE's sales revenue in China reached 5 billion US dollars, and in 2007 its sales revenue was 4.4 billion US dollars.
In addition, from the perspective of industrial development, market demand is also driving technological progress.
In 2009, GE merged its six business groups into four: Technology Infrastructure (covering healthcare, aircraft, transportation and enterprise security), Energy Infrastructure (energy, water treatment, oil and gas), GE Capital (commercial finance, GE Consumer Finance and corporate financing), and NBC Universal.
Because GE's operations are diversified, with a huge variety of product specifications and fierce market competition, it has also actively pursued reform in enterprise organisation and management. In the early 1950s, the company fully adopted a 'decentralised divisional system'. At the time, the whole company was divided into 20 divisions, each operating independently and accounting separately. Over time, in response to the needs of operations, the company continuously adjusted its organisational structure. In 1963, when Fred Borch succeeded as Chairman, the company's organisation comprised 5 group offices, 25 divisions and 110 departments. At the time the company's sales were stagnant, with sales of only about 5 billion US dollars over five years. After 1967, the company's business grew rapidly, with almost every group office reaching 1.6 billion US dollars in sales. Borch believed that after the business expanded, the original organisational structure could no longer adapt, so he expanded the 5 group offices to 10, the 25 divisions to 50, and the 110 departments to 170. He also reorganised the leadership, appointing 8 new group general managers, 33 division managers and 100 new department heads, and established a 5-member board of directors whose duties were to supervise the whole company and formulate a relatively long-term basic strategy for it.
In 2015, then GE CEO Jeff Immelt announced the creation of 'GE Digital' [3], integrating all of the company's internal digital functions into a single department to better blend software and analytics into industrial products. GE expected to achieve 6 billion US dollars in software and analytics revenue that year, and planned to rank among the world's top 10 software companies by 2020.
In the mid-1970s, the US economy stagnated again. Reginald Jones, who became Chairman of GE in 1972, feared a relatively prolonged economic downturn in the 1980s, and by the end of 1977 he further reorganised the company's management system, introducing the 'executive office system' - also called the 'super-divisional system' - from January 1978. Under this system, 'super-divisions' are established above the various divisions to oversee and coordinate the activities of the divisions, adding another tier of management above them. In this way, on the one hand the top leadership can be relieved of routine affairs and concentrate on the decision-making strategic plans concerning enterprise development; on the other hand it also enhances the company's flexibility. In the reorganised system, Chairman Jones and two Vice Chairmen formed the top leadership body, the Executive Office, which specialised in long-term strategic planning, dealing with the government and studying tax-system issues. Beneath the Executive Office were five 'executive departments' (i.e. super-divisions, including the Consumer Products and Services Executive Department, Industrial Products and Parts Executive Department, Power Equipment Executive Department, International Executive Department, and Technical Equipment and Materials Executive Department), each headed by a Vice President. Under the executive departments were 9 headquarters (groups), 50 divisions and 49 strategic business units. The routine affairs of each division, as well as strategic decisions concerning market, product, technology and customers, which previously all had to be reported to the company's top leadership and were led separately by the two Vice Chairmen, were now handled differently. In addition, the three staff departments of finance, personnel and legal reported directly to the Chairman.
Similarly, GE also attaches great importance to scientific research and has a long history of doing so. From the second year after the company's founding, a young German mathematician, Charles Steinmetz, was engaged in scientific research, and a laboratory was established in 1900. According to a 1970 report by the US Industrial Research Institute, the company had 207 research departments, including one Research and Development Centre and 206 product research departments. It employed more than 17,200 scientific research personnel, accounting for 4% of the company's total workforce.
In 1973 GE employed 31,000 professionals holding technical degrees, more than half of whom were engaged in research and development work. In 1972, the company's total R&D expenditure exceeded 800 million US dollars, of which 300 million was borne by the company itself and 500 million was mainly used for R&D work under contracts with the US government.
GE's scientific research work is divided into two aspects: basic theory and applied research. Its Research and Development Centre carries out both, with emphasis on basic theoretical research, serving the whole company, while also conducting joint research on topics common to various industries. The predecessor of this R&D Centre was a laboratory established by the company in 1900, also the first industrial laboratory in the United States to engage in basic research. Its founders were a young chemist from MIT, Willis Whitney, and two GE technicians. The early research of this laboratory was mainly basic research on electric light bulbs, X-ray tubes, thyratrons and related chemistry and metallurgy. During the two World Wars, this research laboratory studied communications and radar equipment used in the wars. By the end of the Second World War, the research staff of the laboratory had expanded to more than 600 people. In 1968, this research laboratory was formally named the Research and Development Centre, and by 1973 it had 17,000 staff, of whom 325 held PhDs in physics. A company Vice President concurrently served as the director of the R&D Centre. Under the R&D Centre were two research departments: the Department of Materials Science and Engineering (divided into four laboratories) and the Department of Physical Science and Engineering (divided into five laboratories). In addition there were three administrative departments, namely
At the same time, the related supporting processes and equipment are also being continuously optimised and upgraded.
In the late 1960s, GE encountered fierce competition in the market from Westinghouse Electric Corporation, and the company's finances kept swinging into deficit. To rescue the company from crisis, the top leadership adopted a new strategic measure in the enterprise management system in 1971: establishing 'Strategic Business Units' (SBUs) within the divisions. These SBUs are independent organisational units that can selectively manage certain products separately within a division, so that the division can flexibly and effectively concentrate and allocate its human and material resources, and formulate rigorous, forward-looking strategic plans for various products, sales, equipment and organisation. Such an SBU can be on a par with a group office, or at the level of a division - for example medical systems, apparatus components, and chemistry and metallurgy; some are at the department level, such as tungsten-carbide tools and engineering plastics. GE's leadership attached great importance to establishing SBUs, considering them 'a very meaningful step' and 'an important path' for the company's development. In 1971, the company set records in both sales and profit. Judging from the company's rapid development from the 1960s to the mid-1970s, this measure indeed played a considerable role. In the 11 years from 1966 to 1976, GE's sales doubled, rising from 7.177 billion to 15.697 billion US dollars; net profit rose from 339 million to 931 million US dollars. Over the same period, total fixed assets increased from 2.757 billion to 6.955 billion US dollars.
On this basis, industry experts have also carried out a great deal of research and improvement.
General Electric (GE) announced in Beijing on the 7th that it will sign a cooperation framework agreement with China CSR Corporation Limited to establish a joint venture in the United States to jointly promote the development of high-speed railway and other rail-transit technologies in the US market.
In July 2011, the Global Fortune 500 company General Electric quietly acquired the domain name NightlyNews.com; the domain information has been transferred to its name, though the specific acquisition amount is not yet clear.
In addition, this technology also has wide application and practice in related fields.
According to Japan's Kyodo News, GE will form a joint venture with Alstom, transferring Alstom's renewable-energy and nuclear-power businesses and the transmission businesses of both companies into the new company. The French industrial-electricity giant Alstom decided at a recent board meeting to sell its energy division to General Electric Company (GE). GE stated that it aims to complete the acquisition procedures in 2015. [4]
At the same time, the related supporting processes and equipment are also being continuously optimised and upgraded.
In GE's 108-year history of development, there have been countless exciting events, and each has led GE to greater success. In the early 1980s, GE streamlined its bloated 350 business units into 10 core business units, making it a leader in the industry; it is a diversified company in which, if its 11 business groups were ranked separately, 9 would make the Fortune 500. GE's culture has embraced the well-known concepts and methods of 'Work-Out', 'Speed', 'Boundarylessness' and 'Horizontal Learning'.
In addition, this technology also has wide application and practice in related fields.
Each of GE's business groups is first or second in its industry because GE pays the utmost attention to 'customer needs'. Never before has the demand for ever-more services from customers been as great as it is now, and GE has drawn boundless business opportunities precisely from 'customer needs'. For example, GE's financial services system conducts business ranging from credit-card issuance to insurance and from structured finance to container leasing, and as much as 40% of its profits come from this. While most people still associate GE with a manufacturer, GE has already embedded itself with customers, providing high-value-added services alongside high-quality products. Another example: GE's on-wing (non-removal) maintenance of aircraft engines provides maximum service to customers, and such business has turned GE from a supplier into a partner, expanding its profit margin.
