DQ9

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St. George's University *

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Management

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Nov 24, 2024

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docx

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Running head: INDUSTRY AND ORGANIZATIONAL ANALYSIS 1 Overall assessment GE currently has global revenue of 74.2 billion USD and its largest segment by revenue remains Aviation. It has a 13% U.S. market share of home appliance manufacturing, is ranked as the sixth largest conglomerate globally as it relates to market value (as of May 22 nd 2022) and is the leading commercial aircraft engine MRO manufacturer (Placek, 2022). GE's recent struggles to compete with low-cost operators in the industrial sector have been well documented but that is not the only problem confronting GE. The company continues to struggle in the energy sector as cost-cutting moves like shutting down some power generation plants have largely failed to stop losses in traditional power markets. This suggests that GE needs a new strategy for its industrial operations and a different approach for its power operations ( Zhu, Ge & Wang, 2021). Further, GE is facing significant challenges in both areas of its business. Recently, GE announced the closure of its appliance division and reductions at another division with 2,000 job cuts. In addition, on the power front, GE has announced that it plans to sell its traditional power business, leaving GE without a significant presence in power generation ( Zhu, Ge & Wang, 2021). GE’s aviation unit suffered at the hands of COVID 19 and as such, the unit had to start laying off 10% of GE’s U.S. workforce in March of 2020. GE in 2021 announce plans to split into three separate, independent companies; one with focus on healthcare, one with focus on aviation and the other with focus on energy. According to GE’s CEO, Larry Culp, “ By creating three industry leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long term growth and value for customers, investors and employees” (as cited in La Monica & Isidore, 2021). On the industrial front, however, challenges are looming on several fronts. Historically, GE has been one of the best performing stocks in the Dow Jones Industrial Average and it represents a good benchmark for other companies within that index. However, its industrial and energy operations have

INDUSTRY AND ORGANIZATIONAL ANALYSIS 2 underperformed (including its banking operations). Despite the challenges, I strongly believe these units offer significant value relative to the market and could be attractive acquisition targets for larger companies looking to bolster their presence in these growing markets ( Zhu, Ge, Wang, 2021). As Hansen (2022) rightfully stated “Despite GE’s well-publicized decline it remains a force in its three main business sectors, employing 175,000 worldwide and operating in 130 countries” (para.22). Although GE’s size has not worked in its favor in a long time, hopefully the split positively affects GE and brings the much needed turn around.

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DQ9

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