Strategic Management-Jeff Immelt Management - Case Study Example

Strategic Management-Jeff Immelt Management Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 Identification of Case study 3 1.0 Identification of Strategic Issues and Problems 3 1.1 Political Analysis 3 1.2 Economic Analysis 4 1.3 Social Analysis 4 1.4 Technology Analysis 5 2.0 Analysis and Evaluation 5 2.1 Infrastructure Development 5 2.2 Business Operations Narrowing 6 2.3 Technology Innovation 7 3.0 Recommendations 7 3.1 Outsourcing 7 3.2 Strategic Alliances 8 3.3 Specialization 8 3.4 Decentralization 9 3.5 Online Retail Outlets 10 Conclusion 10 References 11 Identification of Case study The General electrical company is one of the global leaders in the diversified multinational organisations. With an existence history spanning for over a century since 1896, the organization has expanded and exerted its overall influence in the global market. In this regard, under the leadership of its two immediate former CEOs Immelt and Welch, the organization has established global market competitiveness through strategic and radical as well as gradual adaptation strategies. This evaluation case study reviews the various strategic development and market adaptation measures as adopted by the CEO Immelt since he took over the company between 2001 and 2012 (Grant, 2012, p.748). The review examines the relevance of the adopted strategies in relation to the environment as well as the available alternative strategies for the general electrical organization. 1.0 Identification of Strategic Issues and Problems The global market environment in which General electrical operates in gradually changed over the period in which the CEO was in control. In order to illustrate and analyze on the existing strategic problems facing the organization necessitating changes, this section evaluates the various market changes that led to strategy shortages and the immediate need to develop alternative measures by the company. As such, the review applies a PEST (political, economic, social and technological) analysis that Lin (2006, p.93) argued is an ideal approach to discuss the key macro-economic changes that necessitated the development of the adopted strategies by the General Electricals management. 1.1 Political Analysis On one hand, apolitical analysis on the global environment reveals increased global governments involvement in business operations. This was especially after the 2008 global financial crisis occurrence. Subsequently and in order to mitigate against such future challenges in the market, the global political institutions increased their control and regulations on the operations of the existing organisations through the development of stringent regulatory frameworks especially in the financial markets. 1.2 Economic Analysis A review of the economic systems operations in the industry reveals that the global market experienced a huge economic decline. In this regard, the 2008 global financial crisis led to the eventual collapse of a majority of the global industries led to declining earnings in the market. As such, a majority of the individuals disposable incomes declined leading to an overall reduced market demand for the various organisational products. This declining demand on products and revenues implicated on various organisations the General Electrical Company included, thus necessitating for the adoption of strategic corrective measures in the market. However, despite the economic challenges experienced, there was the emergence of new markets in the globe. In this regard, global markets such as China, India and Japan emerged as key global markets thus establishing their control and influence in the global market. 1.3 Social Analysis A further evaluation of the social global environment conditions illustrates that the market in this period acquire drastic changes in the population structures. In this period, there were reduced birth rates in the global nations. As such, gradually, nations developed a population structure in which a majority of the citizens was ageing. This was the ageing period of the baby boomers generation where generations X and Y were relatively few in the market. Therefore, through this approach, it was imperative for organisations to develop systems and strategies through which to orient their systems and products in order to successfully tap into the new consumer segment through provision of products and services that focus on satisfying the needs and wants of the ageing population. 1.4 Technology Analysis Finally, an evaluation of the technology environment on the global market in this period reveals fundamentally changing approaches in the market. In this regard, technology development led to its increased application and adoption in the organisations. As such, most of the global organisations in the market resulted to increased use of technology through automation of their services. Subsequently, the consumers buying behaviours gradually changed in the market. In this regard, a majority of the consumers especially of the X and Y generations respectively resulted to increase use of the online platforms to make business transactions. Therefore, in order to develop competitiveness and efficiencies in the market, organisations were required to develop competitive IT platforms to attract the new market consumer behaviour trends. 2.0 Analysis and Evaluation This case study evaluation section evaluates the various adopted organisational strategies by General Electricals against the discussed environmental conditions in the global market. In this case, the section evaluates the appropriateness of the various strategies and any weaknesses of the strategies if any is identified. 2.1 Infrastructure Development The organization adopted an approach through which it developed its strategic infrastructure. As such, the CEO was directly involved in the organisational acquisition of strategic capital equipments and infrastructure. In its approach, the organization sought to develop a strong infrastructural platform from which it could effectively and efficiently compete with other stakeholders in the global market. On one hand, this evaluation argues that the development of the organisational infrastructure was a strategic approach appropriate for ensuring increased organisational strategic competitiveness in the long run (Grant, 2012, p.751). However, this evaluation argues that the process of developing such infrastructure was imperatively high and had the experienced organisational negative implications. Therefore, the evaluation argues that although the strategy application was an ideal approach to increase general electrical market competitiveness, it led to reduced working capital as well as reduced overall revenues through investment in infrastructure whose benefits could be acquired through alternative approaches in the market, of which could be relatively have increased benefits over the incurred costs. 2.2 Business Operations Narrowing An additional approach through which the General Electrical executive management adopted to increase its overall market competiveness in the changing global climates was through the reduction of the organisational business and products portfolio. In this regard, the organization narrowed down its operations to increased infrastructure and specialty services provision. This was a strategic deviation from the traditional approach of the organization. Traditionally, the organization had diversified its operational systems. In this case, the organization offered a series of products as well as general financial services in the financial and capital markets. This evaluation argues that the application of the approach was ideal in mitigating and strategically adopting to the changing global needs for specialization and reduced diversification. However, the developed product portfolio was still diversified. In this regard and as evidenced in the case study, critics of the system argued that the organisational operations could be increased through the demarcation and splitting of the organization into difference subsidiaries each focusing on a specific function in the market. Therefore, this evaluation concludes that the adopted strategy was not satisfactory to meet the needs of the venture in adapting o the discussed market environmental changes. 2.3 Technology Innovation Further, the General Electrical executive management adopted a technology innovation approach as one additional approach to increase its market competition and relevance in the market. In this regard, the organization developed an approach through which technology development and innovation was emphasized. This evaluation argues that through increased technology innovation, the organization developed strategic market competitiveness in the market. As such, through this approach, the organization has established its market competitiveness in the market in that it appropriately captured the emerging consumer base comprised of the X and Y generations that are inclined to increase overall technology platform transactions over the traditional physical market platform. 3.0 Recommendations Based on a strategic evaluation of the organisational macro environment against the adopted organisational strategies and their apparent challenges, this evaluation lists key among the possible recommendations that the organization could apply to stimulate increased market performance and success. 3.1 Outsourcing Involves the obtaining of the organisational services and industries from external stakeholders in the market. In this case, such specialist services are obtained from the experts in the industry. General electrical could obtain the infrastructural services such as logistical and transportation and communication infrastructures from the established and specialized service providers in the market. Through the outsourcing process, the organization would invariably reduce on the cost of acquisition as well as allow for increased working capital for both short and long term periods 3.2 Strategic Alliances Miller, Li, Eden and Hitt (2008, p.102) discussed that strategic alliances include the development of relationships among industry players in the market. The practice is one of the developing strategies of adoption in the global market through which organisations expand their control and influence in the market. Traditionally, the market was characterized with individual organisational practices in the market where organizations perceived peers in the industry such as their suppliers as competitors. However, this practice has changed and the current operational models advocate for partnerships such as through supply chain management and partnerships and other strategic alliances in the market. The application of the above approach would benefit General Electricals Company through approaches such as Reduced operational costs in the market through sharing of the operational expenses in the market Increased consumer base and segments through sharing of consumers with the strategic alliance partners Increased market control through increased gross profits as a measure to increase the organisational overall revenues In the development of the required organisational alliances, the General Electricals Company should consider alliances with specialized financial providers. Through such an approach it would reduce the need to develop a qualified and experienced workforce in the specialty as well as reduce the overall need for the organization to conduct primary surveys on the consumer base to distinguish and establish the consumer needs and strategies in the market. 3.3 Specialization Specialization includes the process of focusing on a specific business area in the market. Traditionally, organisations were includes to the practice and approaches of diversification. As such, the organisations provided large products portfolios as measure to diversify their revenue streams. However, this approach had its demerits and thus the emergence of increased specialization. Through the application of a market specialization approach the General Electrical organization would benefit through It would develop and acquire an increased market niche in the global market Could focus on the development of specific products and services to serve its market niche thus increasing its overall product features synergy with the specific market locations in the market. Increase its overall market reputation through increased market success and brand image promotion In order to achieve the discussed merits, the organization should strategically focus on the specialized financial market as its core business. In this regard, with the developed stringent regulations in the industry in the post 2008 financial crisis era as well as the existing organisational capital base and reputation and current brand image would increase the overall organisational specialization strategy approach. Therefore, this recommendation argues that the organization should consider selling out or forming respective subsidiaries through which its respective business and products portfolios would be catered for in the market. 3.4 Decentralization An additional approach through which the current industry organisations can increase their overall market competitiveness is through increased decision making decentralization. The decentralization process involves the empowering of organisational employees. As such, instead of developing strategic decisions and strategies formulation by the executive management, the responsibility is offered to the employees (Galand, 2009, p.338). The adoption of this approach would invariably increase the overall competitiveness of General electrical Company. In this regard, through the recommendation application, the organization would Reduce the decision making pressure on the executive organisational managers allowing for focus of the executive management on strategic organisational issues Enhance increased strategies flexibility and adaptability through increased decision making customization Increased employee motivation through the empowerment program that would increase their overall productivity thus increasing the overall organisational productivity in the market. 3.5 Online Retail Outlets A final approach through which the organization could enhance its strategic presence and market influence in the global context is through the establishment of online retail outlets. In this regard, the establishment and setting up an online retail outlet would ensure that the organization would increasingly capture the overall growing generation Y population that is included to increased IT application and use of the online platform to make purchases. In this regard, the evaluation develops recommendation that The organization should establish an online retail outlet Outsource IT services to ensure quality and uninterrupted online presence in the market Conclusion In summary, the case study evaluation establishes that the adopted adaptation strategies by the General Electrical Company such as IT innovation are relevant and abide by the changing macro environmental changes as evidenced through the evaluation PEST analysis. However, the review establishes that infrastructural development and reduction in products portfolio were unsatisfactory. Therefore, the case study analysis recommends outsourcing, specialization, strategic alliances, decentralization and online retail platforms in the market. References Galand, G. 2009, "The Neutrality of Money Revisited with a Bottom-Up Approach: Decentralization, Limited Information and Bounded Rationality", Computational Economics, vol. 33, no. 4, pp. 337-360. Grant, M.R, 2012, Jeff Immelt and the Reinventing of General Electric, General Electric Report. Lin, H. 2006, "Ethical Applications of Technology in HRD: A PEST Analysis and Implications", Performance Improvement Quarterly, vol. 19, no. 4, pp. 91-105. Miller, S.R., Li, D., Eden, L. & Hitt, M.A. 2008, "Insider trading and the valuation of international strategic alliances in emerging stock markets", Journal of International Business Studies, vol. 39, no. 1, pp. 102. Read More