Free Company Analysis: General Electric Essay Sample

Introduction

General Electric (GE) is an American-based global corporation’s incorporation was on 24 April 1889 in New York, USA and has its headquarters in Fairfield, Connecticut. The company has a diverse range of operation ranging from transportation, aviation, capital, Oil and gas, water, power and management of energy. The company also has interests in healthcare and disease management (General Electric Company 2007). According to a 2011 rank, General Electric was the 26th largest company in the United States in terms of gross revenue. The company ranked as the 14th most profitable company, beating major corporations in the country. Forbes 2000 ranks the company as the fourth largest in the world, putting into consideration a variety of metrics for measurement. General Electric ranks among the top companies in a variety of fields. Among them is the “best global brand” where it is the 5th in the listing, the 63rd “green company,” and the number 19 “most innovative company. (Henderson and Evans 2010)”

Company History

GE's birth owes to its founder Thomas Edison, who had vast interests in the electricity sector. Edison had interest in major electric companies, and through his power and strong relations with powerful men, he acquired most of these companies. His patent holding company, then, was Edison Electric Light Company. The company had the financial backing of J. P Morgan, enabling it to amass numerous amounts of funds and thus easily acquire new companies. A major merger of the companies resulted in the formation of Edison General Electric Company incorporated in 1889. Thomas Houston Electric Company acquired competitors in the same industry, and its merger with Edison General Electric Company gave birth to the General Electric we now have (Henderson and Evans 2010). It is from then on that the formation GE’s counterpart Canadian General Electric succeeded. The founders of the company are Thomas Edison, Edwin Houston, Charles Coffin, and Elihu Thomson (General Electric Company 2007). GE is publicly held and its current CEO is Jeffery R. Immelt, who still serves as the chair of the company’s board. Immelt attended Dartmouth College, from where he holds an AB in Applied Mathematics. He also holds an MBA from Harvard Business School (Henderson and Evans 2010).

Globalization Effects

Globalization has adversely affected the policies of GE over time, to remain young and competitive in the market. The company uses a variety of moneymaking avenues, which complete its business model. Through manufacturing of products and distributing them to all continents, GE amasses a vast amount of revenues. It also uses GE capital to fund different ventures, gaining control over many organizations and thus widening its market coverage. Other avenues such as healthcare and energy are also major contributors to the company’s income.

Industrial Analysis

The manufacturing industry is a major revenue generator in the world economy. It is through manufacturing that the economy of a country grows, owing to the durability of its services. The industry size is massive, and accounts for over 30% of the total world revenue, making it attractive to investors and other stakeholders (Henderson and Evans 2010). Some of the macro-environmental factors affecting the performance of GE include technological environment, demographic environment, legal-political environment, and the economic environment. These are discussed below.
In the manufacturing industry, precisely energy, General Electric is a major player, and it competes favorably against its competitors. Major determinants of the company’s macro-environment are government laws and regulations. For the success of GE, abidance to set rules and regulations, the legal environment, has been a major consideration affecting policy setting. The technological world has also been a major determinant of the company’s operations, affecting most of its plans and objectives. To remain active in the market, GE, which is a company formed a century ago, has had to adopt new technologies. Factors such as pollution have altered policies of GE, where the company has adopted measures to better its societal contribution. It has been an effect of the legal political system, which discourages pollution for societal development.

Competition

General Electric faces stiff competition from companies such as Siemens, Hitachi, 3M, and United Technologies (Henderson and Evans 2010). The company competes favorably with its rivals and reports prove a consistent increase in interests and share values. Some of the attributions of the vast success are the company’s strengths, which include:

Geographical diversity

Strong workforce
Diversified products
A strong market penetration
Leadership in the global market
The company faces a couple of weaknesses, to which it focuses its attention on eliminating. They include:
Conglomerate structure
Distribution barriers

References

General Electric Company. & General Electric Company. (2007). General Electric review. Schenectady: General Electric Co..
Henderson, K. M., & Evans, J. R. (2010). Successful implementation of six sigma: Benchmarking General Electric Company. Benchmarking: An International Journal, 7(4), 260-282.