Ramirez Guzman-Week 5-Assessment Prep Business Case Research

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BUSINESS CASE RESEARCH 1 Assessment Prep: Business Case Research Marisela Ramirez Guzman FIN/571: Corporate Finance University of Phoenix Professor: David Tucker November 6 th , 2023
BUSINESS CASE RESEARCH 2 Business Case Research General Electric, Co. General Electric Company, also known as GE, is an organization that is considered a strong franchise that is leading positions in growth in critical sectors by investing in innovation to solve customer needs at a global level. Also, GE concentrates on developing close customer relationships, growing installed bases, and essential services to continue developing sustainable financial performance, revenue increase, margin expansion and earnings growth. Even though GE has been a leader in the industry, the organization has been forced to develop a new strategic and operational plan that is based on its financial progress. The organization has been focusing on restructuring its priorities by dividing the company into three public organizations that concentrate on aviation, healthcare and energy. (Vesoulis, 2021). Over the years, GE has change its way of operation due to the lack of popularity in its original products and services, leading the company to cut its personnel because of the decrease in sales. GE’s lack of investment in America’s domestic labor force is different because of the volume of state and federal taxpayer grants, tax credits, and subsidies the company received at the same time of disinvesting in the U.S. economy. The organization has drawn roughly $1.6 billion in federal money since 2000, in addition to $687 million in state and local award since 1992, with more than $ 2.2 billion. At the same time, three out of every four GE jobs in the U.S. disappeared. (Vesoulis, 2021). In 2022, the organization announced the opportunity of sustainable profitable growth for near-term improvements in business, especially because of a recovery in aviation, allowing one of the 3 sectors to become stronger. The idea of dividing the company into 3 different
BUSINESS CASE RESEARCH 3 organizations was to reduce debt and strengthen operating performance through lean and decentralization to achieve a long-term financial goal. (Keller & Marcer, 2022). Because the organization is working towards its financial goal stability, to continue growing, it is necessary that the organization continues to innovate while adapting to the new era. Unfortunately, due to the lack of profit, it is necessary to obtain funding to achieve profitability. By doing this, the organization will be able to generate more jobs because of a possible increase in demand for its services, as well as achieving its long-term financial stability. Because GE is continuously innovating and creating, the best type of funding for GE electric would be Venture capital because it would help the organization to develop the ideas by using basic research that can be convert into products and services that can transform the General Electric world by building a high growth from its current stage. Venture Capital can generate billions of dollars for investors and its institutions; Also, it can develop new jobs. This type of funding can help GE to increase its revenue and generate more jobs. Venture Capital partners provide strategic and operational guidance by connecting the organization with investors and customers. This type of funding won’t only allow the organization to develop its ideas but also, it is considering a great way to a rapid growth to become a global success organization and obtain its financial stability. (NVCA, 2023). Venture Capital also has some risks such as not getting the investment back and not being able to pay back the investment. Investment does not guarantee a company’s success even though it continues to look for the best opportunities to minimize risks. This type of investment offers a great opportunity for growth but also it could cause a potential loss of capital. (Rahman, 2023).
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BUSINESS CASE RESEARCH 4 Venture Capital loans can vary on APR and, also, can be based on equity investments. This type of funding allows business to take equity positions in young companies such as the new development in GE aviation, healthcare and energy concentration. FUNDING APR EQUITY ANNUAL RATE OF RETURN NOTES Venture Capital Up to 25% High rates of return and opportunity of obtaining on equity. 30 to 50% This type of investment can help GE to get back on track with innovation and implementation by having an expert develop a business plan to be successful. The APR rates are high due to the opportunity of taking a risk in new concepts but with an opportunity of high rates of return. General Electric is looking for ways to recover from its losses and be able to generate revenue again by dividing the organization into three different areas. Thanks to this, Venture Capital will be the best option to continue developing new ideas and increase their opportunity of sales to start reducing debt in a short-time period. General Electric has been considered a leader in the industry and will continue to develop high-quality services and products through the use of innovation.
BUSINESS CASE RESEARCH 5 References GE, Company. (2022). GE2022 Company Overview. Retrieved from: https://www.ge.com/sites/default/files/ge-company-overview.pdf Hansen, S. (2022). The Rise and Fall of General Electric (GE). Retrieved from: https://www.investopedia.com/insights/rise-and-fall-ge/ Keller, T; Mercer, W. (2022). Growth And Momentum: GE Enters 2022 With Strength From Strategic, Operational And Financial Progress. Retrieved from: https://www.ge.com/news/reports/growth-and-momentum-ge-enters-2022-with-strength- from-strategic-operational-and-financial NVCA. (2023). What is Venture Capita? Retrieved from: https://nvca.org/about-us/what-is-vc/ Rahman, M. (2023). The risks and Benefits of venture Capital. Retrieved from: https://nvca.org/about-us/what-is-vc/ Vesoulis, A. (2021). U.S. Taxpayers Bankrolled General Electric. Then It Moved Its Workforce Overseas. Retrieved from: https://time.com/6114004/general-electric-workforce-public- subsidies/