Putting the ELECTRIC back in General ELECTRIC
Edison started General Electric to provide total electrical solutions and to "light up the world". In 1893 his Edison General Electric merged with Thomson Houston to become General Electric. Up until the 1950s... the GE game plan was simple... create increasing demand for electricity by providing electrical products like light bulbs, irons, refrigerators, cooking products, etc. so that electric utilities required more generators, transformers, switchgear equipment and total systems. This was called the BENIGN CYCLE and it was the essence of GE.
In the 1950's GE moved into other products, primarily those that were by- products or offshoots of their electrical and chemical technologies, such as plastics, jet engines, locomotives etc. It added financial services to help provide financing to consumers and industrial/ commercial customers. Again this worked and GE grew.
In the 1960's, because of the Great Electrical Conspiracy (price fixing) GE's growth plateaued at $5 billion and so it created its GROWTH COUNCIL to identify markets growing faster than the GNP that GE has some expertise...this was the beginning of the massive diversification of the company. Diversification moved to "portfolio management" in the 1970s and it was the underpinning strategy of Welch and Immelt.
Interestingly today, GE is returning to its roots as a global leader in electrical systems. Even though it has spun off many of its consumer products and is in the process of selling home appliances, GE now offers a full array of generation products and systems and in recent months has received billions of dollars of orders to produce electrical systems in Iraq, Middle East and has become a leader in wind turbines.
GE is likely to benefit from the current need for the United States to reduce its dependence on oil since it is one of the leaders in Nuclear Energy and Wind Turbines, as well as being able to supply complete electrical systems. In addition, most of the electrical utilities have been harvesting their facilities and now need to invest in new generation, transmission and distributions systems.
This is a great illustration of history repeating itself and shows that it is beneficial to stay the course even when markets are down and out of popularity.
If you want to get the complete story of GE's successes and failures and the genius of GE's early leaders, read my book: The Secret to GE's Success.
Bill Rothschild, CEO of Rothschild Strategies Unlimited LLC and author of GEWatcher blogs.
In the 1950's GE moved into other products, primarily those that were by- products or offshoots of their electrical and chemical technologies, such as plastics, jet engines, locomotives etc. It added financial services to help provide financing to consumers and industrial/ commercial customers. Again this worked and GE grew.
In the 1960's, because of the Great Electrical Conspiracy (price fixing) GE's growth plateaued at $5 billion and so it created its GROWTH COUNCIL to identify markets growing faster than the GNP that GE has some expertise...this was the beginning of the massive diversification of the company. Diversification moved to "portfolio management" in the 1970s and it was the underpinning strategy of Welch and Immelt.
Interestingly today, GE is returning to its roots as a global leader in electrical systems. Even though it has spun off many of its consumer products and is in the process of selling home appliances, GE now offers a full array of generation products and systems and in recent months has received billions of dollars of orders to produce electrical systems in Iraq, Middle East and has become a leader in wind turbines.
GE is likely to benefit from the current need for the United States to reduce its dependence on oil since it is one of the leaders in Nuclear Energy and Wind Turbines, as well as being able to supply complete electrical systems. In addition, most of the electrical utilities have been harvesting their facilities and now need to invest in new generation, transmission and distributions systems.
This is a great illustration of history repeating itself and shows that it is beneficial to stay the course even when markets are down and out of popularity.
If you want to get the complete story of GE's successes and failures and the genius of GE's early leaders, read my book: The Secret to GE's Success.
Bill Rothschild, CEO of Rothschild Strategies Unlimited LLC and author of GEWatcher blogs.
posted by TheStrategist @ 9:02 AM
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