General Electric - Key of Success

Business and economic processes in the world are tightly intertwined with large and small companies creating a financial infrastructure, which agrees with policies and economic laws. The impact of entrepreneurship on the economic processes differs and depends on the size of the company and its policies towards the stakeholders along with the general purpose of its existence. Rational and fair competition in the sphere of business is beneficial for the governments because it creates workplaces, increases the amount of collected taxes, and assists in solving ecological and other problems. It presents a comprehensive assessment of the company's activity, mission and vision, and their impact on stakeholders. Moreover, it presents its competitors, a SWOT analysis, various strategies proposed for the company's growth, corporate governance mechanisms, principles of leadership, and its position as a corporate citizen. The performed evaluation demonstrates the economic and social footprint of the company along with its validity as an individual economic power capable for providing significant corporate influence. Such experience enhances the professional skills of the future economic and business specialists in the field of economic analytics and corporate strategic analysis.

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General Electric is one of the largest business enterprises in the world with hundred thousand stakeholders around the world. It is an international public company, which was originally founded in the US in 1892 with headquarters in Fairfield, Connecticut (LexisNexis Corporation, 2015). Originally, it was founded as a company providing infrastructure and financial services. The analysis of the company's vision and mission allows to state that they serve as the critical points of making the country a strong international business respected by its primary stakeholders. Thus, the mission and vision statement of the company are the invention of the next industrial era building, moving, powering, and curing the world (General Electric Company, 2014). The analysis of the company's activity proves that the scope of the provided services and goods throughout its existence has significantly increased. Thus, modern General Electric is a supplier of the aircraft engines, oil, gas, power production equipment, household appliances, medical imaging, business and consumer financing, and industrial products (LexisNexis Corporation,, 2015). Its goods and services are valued not only in the US but throughout the whole North America as well as South America, Asia, and Europe. Considering its economic role in the world, one has to say that it is one of the top companies in the world in terms of financial power. In 2014, it earned $148.5 billion of revenue, had more than $648 billion of assets, and more than $511 billion liabilities providing workplaces for 505, 000 employees (LexisNexis Corporation, 2015). Moreover, the company participates at the stock exchange trades having its stocks in London and New York. As a result, General Electric's primary stakeholders are present on the global market and include a wide range of the suppliers, customers, partners, governments, and holders of the company's stocks. Therefore, the validation of the mission statement in its corporate culture contributed immensely to the fact that the governments of the industrially developed countries as primary stakeholders are interested in having General Electric as a partner. The reasons for this are a remarkable ability to create workforce, the tax payment abilities, and industrial progress.

Furthermore, any business faces the forces that restrain its progress and may endanger its competitiveness. One uses Porter's five forces tool, which identifies such forces as competitive rivalries, threat of new entrants, threat of substitutes, and bargaining power of suppliers and customers (Team FNB, 2013). Thus, the fact that General Electric deals with a wide range of services and goods leads to the increased competition against different companies. A particular challenge for the company is the businesses that have a long-term experience in producing a specific range of goods and providing a narrow scope of services. In this sense, the top rivals of General Electric are Siemens, 3M, Hitachi, United Technologies ("Forbes earnings preview: General Electric," 2015), and Alstom (Alstom, n. d.). This is because Siemens is one of the most powerful producers of electric, industrial, and communication goods and services ("Siemens in the USA," n. d.), and 3M is a company of scientific innovations in the spheres of IT, heavy and light industries, and other ("Who we are," 2016). Similarly, other companies present a challenge in the spheres of IT, engineering, production of heavy industrial equipment, such as electric power stations, aircraft engines, and other. As a result, General Electric has to constantly update its knowledge and experience in the spheres of industrial engineering, aircraft engines production, power station components production, IT, and digital communications. Moreover, the fact that the company is a global business and aspires for entering new international markets presents specific regional threats. For instance, the restraining power in Asian region is Asian conglomerates, such as Samsung and Sony. Similarly, General Electric has to follow the policies of the countries where it has its divisions. A particular restraining force may be seen from the governments, which back up domestic businesses and oppose the international companies. Moreover, as a producer of engines and machinery, General Electric is dependent on the producers of raw materials. Finally, it is evident that the presence of the company on the worldwide markets and increased competition force General Electric to follow the rational consumer targeted strategies. Besides, global crises make the customers more price sensitive, which increases the need for customer-targeted interventions. The described forces show the need for presenting the SWOT analysis and determining the major strategies for the company's success.

 

The purpose of any SWOT analysis is to highlight the critical strengths and weaknesses of the business in order to outline the best possible strategy for its growth. Thus, analyzing the strengths, weaknesses, opportunities, and threats for/of the company one has to say that they are predicted by its enormous size, distribution, and involvement in the different spheres of life. The strengths of General Electric are the following: diversified structure, strong global presence, strong financial position, outstanding R&D methods, and rapid market presence increase. Moreover, its strong policies and corporate culture along with the global presence guarantee its financial safety and stability even during a financial crisis. Similarly, the accent on the technological innovations causes the company to constantly implement modern technologies as well as new principles of work, research, and regulation of business processes. However, the company has its specific weaknesses, which enter some aspects of its functioning. For example, a dependence on raw materials from other industrial players and low debt rating according to Moody's Investment services report of 2009 ("Liquidity and Funding Overview," 2013). Additionally, some divisions of the company have a doubtful reputation. For instance, General Electric Aviation Systems has to pay $6.58 million to resolve false claims act allegations ("General Electric Aviation," 2013). Nevertheless, the company has a wide range of opportunities, which are the results of its presence on the global markets of various goods and services. For instance, experts argue that the fast-growing markets of Australia, China, Brazil, and India are attractive for General Electric because of the perspectives of investment and market's growth (Haris, n. d.). Similarly, the benefits of the company are the introduction of low-cost medical and other products, which are a considerable demand in low-income countries. As a result, the company has flexible policies, which allow it to enter the markets of both developed and developing countries. At the same time, the threats to General Electric are mainly caused by the global economic processes, which change the intentions and beliefs of the stakeholders. For example, the economic slowdown in the US is a natural barrier for any company because of its financial burden on businesses. Similarly, the process of global inflation deteriorates not only the growth of domestic companies in the US but of those around the world including General Electric (World Bank Group, 2015). As a result, the main strategies for increasing its strengths and opportunities and minimizing the weaknesses and threats should be formed along with the global economic tendencies. Thus, a company has to continue entering the low-income markets because of their perspectives in the future. Similarly, it has to increase its popularity and restore the reputation of stakeholders, which would lead to the investments in its initiatives. Moreover, the company has to develop the sphere of raw material production for granting its freedom from the manufacturers and reducing the cost of production. It is suggested that the proposed changes would assure the stable growth of the company despite the possible worldwide economic challenges.

The performed analysis indicates that there is a scope of the possible strategies, which grant the stability of the company in terms of financial risks and opportunities. Among them is the need for creation and considerable support of the company as of an innovative leader on Asian markets. The reason is the persistent attractiveness of the Asian markets to various industries and services (Hanke, Werner, & Theodoridis, 2015). Furthermore, the company requires ensuring that the influence of the company spreads in the countries with poor economic development. This assumption is based on the fact that the company is capable of producing and utilizing low-income products and services. The increase of the demand of such services and goods on the wide range of poor income markets would ensure that the company will establish economic stability. This strategy would allow the company to back up its resources by a wide range of growing low-income markets. Similarly, General Electric should continue investing in the scientific innovations and R&D sector because they grant the required flexibility in the modern rapidly changing world. At the same time, any business has to provide a communications plan in order to recommend the mentioned information to the stakeholders. Apparently, one of the best ways of spreading the information is the Internet and mobile devices. Thus, it is recommended to increase the level of advertisements connected with the innovative strategies along with the creation of mobile application that will allow to contact the stakeholders. However, General Electric should also distribute the information by the means of newspaper articles in the developing countries because of the limited access to the Internet resources there.

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Characterizing the efficacy of the company, it may be suggested to analyze its corporate governance mechanisms and asses their efficacy in terms of controlling the managerial actions. Thus, the board of directors of General Electric is divided into several committees. They are the Audit Committee, Nominating and Corporate Governance Committee, Management Development and Compensation Committee, and Public Responsibilities Committee (General Electric Company, 2008). Such division makes each part of the board responsible for a particular segment critical in terms of governance. Each committee has a charter, which defines the functions of each member and its connection with other committees. As a result, the company has established an efficient framework, which granted the stable growth of the management skills of the board members along with the adequate and timely implementation of the policies. Furthermore, the operating mechanisms of the company allow each part to play an active role in the managerial processes. The created framework includes seven types of sessions and councils, which gather quarterly or annually. At the same time, some of them meet at other times (General Electric Company, 2008), which grants the efficient control and implementation of the managerial regulations.

Moreover, one of the benefits of the company is a specific accent on leadership. For instance, it has a leadership development institute, which fosters the training of leaders at the company. As a result, each manager and employee in leading position is competent in terms of regulating the processes in a particular field. However, the contemporary situation with leaders may be improved even more if the company creates internal surveys for the leaders and the other employees. This measure allows it to obtain critical information regarding the efficacy of the practiced approaches and the attitude of the staff.

Finally, General Electric is a responsible and valuable international corporate citizen. Thus, the company is a respectful taxpayer, creator of thousands of workplaces as well as the leader in the scientific and industrial innovations. Moreover, it has particular concerns about the climate change, waste utilization, and health and safety programs (General Electric Company, 2005). It implements various strategies and technologies, which allow it to practice ecologically friendly industrial activity and maintain safety at work. As a result, the company is a desirable stakeholder on the numerous worldwide markets.

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Summarizing the presented information, the success of General Electric as a powerful international conglomerate is granted by the rationally created and applied strategies of regulation. Thus, a company established in the US at the end of the 19th century gradually became able to expand to the global markets. Moreover, it produces a wide range of equipment and services, which are in demand in many countries. The global growth of the company grants its economic stability despite the minor intrusions to the global inflation and crisis. At the same time, the company requires entering the Asian market, which is perspective because of its growth. In order to do that, General Electric has to focus on advertising and attracting investments of the Asian stakeholders. Furthermore, the performed evaluation of the infrastructure of the company allows us to state that the segmentation of the direction board into committees boosted their efficacy. This effectiveness is based on the narrow scope of the responsibilities placed on each committee. Consequently, General Electric is an efficient global company and a responsible corporate citizen, which creates thousands of jobs and helps the implementation of innovations and scientific and industrial development of the countries.

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