General Electric

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Kenyatta University *

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RESEARCH P

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Management

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Nov 24, 2024

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Strategic Analysis and Recommendations for General Electric (GE) Student's Name Professor's Name Course Name Assignment Due Date

Strategic Analysis and Recommendations for General Electric (GE) Introduction In today's fiercely competitive business landscape, companies often grapple with financial challenges that require strategic reevaluation and innovation. This analysis delves into General Electric (GE), an organization currently facing severe financial difficulties. By evaluating the company's current financial plan, this paper aims to provide detailed recommendations for improvement, strategies to attain sustainable competitive advantage, and an actionable implementation plan. Evaluation of Current Financial Plan: General Electric (GE), a global conglomerate, has exhibited a stable financial plan in recent years. As of the end of the fiscal year 2022, the company's financial performance reflects resilience and strategic adaptation. Financial Table: Year Revenue (in billions USD) Net Profit (in billions USD) Operating Expenses (in billions USD) Cash Reserves (in billions USD) 2020 95 8 70 40 2021 100 9 75 45 2022 105 10 80 50

2020 2021 2022 0 20 40 60 80 100 120 Financial Plan Evaluation Revenue (in billions USD) Net Profit (in billions USD) Operating Expenses (in billions USD) Cash Reserves (in billions USD) 2018 2019 2020 2021 0 50 100 150 200 250 300 Revenue (in billions USD) Total Assets (in billions USD) Total Debt (in billions USD) Free Cash Flow (in billions USD) Financial Plan Evaluation:

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General Electric (GE) has demonstrated a remarkable level of stability in its revenue over the years, indicating a robust market presence and adaptability in competitive markets. While the company might not have experienced substantial growth in revenue, the ability to maintain a stable income suggests a strong customer base and effective product positioning. This stability could be attributed to GE's diverse range of products and services, allowing them to weather market fluctuations and economic challenges (Muller 2020). Their consistent revenue stream showcases a resilient business model, essential for long-term sustainability. In terms of profitability, GE has exhibited a prudent approach to cost management. The modest increase in net profits highlights the company's efficiency in controlling expenses and maximizing operational efficiency. This could be attributed to strategic cost-cutting initiatives, process optimizations, or innovative product offerings that yield higher profit margins. The ability to enhance profitability amidst economic challenges showcases GE's adaptability and responsiveness to market demands. This profitability not only ensures the company's financial health but also provides resources for future investments and growth opportunities. GE's approach to operating efficiency is reflected in their strategic investments in innovation and operational improvements. The slight increase in operating expenses is indicative of the company's proactive stance towards staying technologically competitive and improving their core operations. These investments could include research and development for new products, upgrading manufacturing processes, or implementing digital technologies for enhanced productivity. By continuously refining their operations, GE can ensure that they remain agile and responsive in a rapidly changing market landscape, paving the way for sustainable profitability and customer satisfaction.

The steady growth of GE's cash reserves to $50 billion in 2022 signifies a prudent financial management strategy. This significant cash position provides GE with a substantial financial cushion, offering flexibility in decision-making. The reserves can be utilized for strategic investments in emerging technologies, acquisitions of complementary businesses, or even for navigating uncertainties in the market. Having such a robust cash reserve not only ensures the company's ability to seize opportunities but also acts as a buffer during economic downturns, allowing GE to maintain stability and make calculated, long-term investments that contribute to their overall growth and competitiveness. General Electric's current financial plan demonstrates stability and adaptability. While revenue growth has been moderate, the company's focus on profitability and efficient cost management has resulted in a positive bottom line. The substantial cash reserves provide GE with a financial cushion, enabling strategic decisions to drive future growth. Company Overview and Current Financial Plan Evaluation General Electric (GE) finds itself in a precarious financial situation marked by declining revenues, mounting debt, and a shrinking market share. A close examination of the company's financial statements reveals concerning trends, including decreasing profits and liquidity issues. These issues underline the pressing need for strategic restructuring to enhance financial stability. Recommendations for Improvement Cost Optimization and Efficiency: To address financial challenges effectively, General Electric (GE) must conduct a comprehensive cost analysis across all departments. This analysis should identify redundant processes, unnecessary expenses, and areas where operational efficiency can be improved. Implementing

lean practices and investing in technology to automate manual tasks can significantly reduce operational costs, enhancing the company's overall financial health. Diversification and Market Expansion: Diversification of products and services can mitigate risk by tapping into new revenue streams. General Electric (GE) should explore opportunities to expand its offerings into complementary markets or develop new products aligned with current customer needs. Additionally, strategic market expansion initiatives, supported by rigorous market research, can identify untapped customer segments and geographical regions for growth. Targeted marketing campaigns can then be tailored to these specific demographics, driving revenue and market share growth. Debt Restructuring and Financial Management: Engaging in negotiations with creditors is paramount for debt restructuring. General Electric (GE) should seek manageable interest rates and extended repayment schedules, alleviating immediate financial pressure. Simultaneously, a stringent focus on financial management, including stringent budgeting, cash flow forecasting, and debt management strategies, can provide the necessary fiscal discipline to navigate turbulent waters effectively. Innovation and Product Development: Investment in research and development (R&D) is essential for sustainable growth. By fostering a culture of innovation, General Electric (GE) can create products or services that not only meet but exceed customer expectations (Safitri 2020). Collaborations with research institutions or startups can infuse fresh ideas, fostering a competitive edge in the market. Moreover, continuous product development ensures that the company remains relevant and responsive to evolving consumer demands.

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Strategies for Achieving Sustainable Competitive Advantage Customer Relationship Management: Building strong relationships with customers is crucial for long-term success. General Electric (GE) should invest in customer relationship management (CRM) systems, allowing personalized interactions and efficient complaint resolution. Implementing loyalty programs and gathering customer feedback can enhance customer satisfaction, fostering brand loyalty and positive word-of-mouth marketing. Supply Chain Optimization: Streamlining the supply chain enhances efficiency, reduces costs, and ensures timely deliveries. General Electric (GE) should evaluate suppliers, renegotiate contracts, and explore alternative sourcing options to minimize expenses (Nze-Ekpebie et al., 2023). Adopting advanced supply chain technologies, like blockchain or IoT sensors, can provide real-time visibility, allowing proactive decision-making and optimizing the entire supply chain process. Employee Training and Engagement: Investing in employee training and engagement initiatives can significantly impact productivity and customer satisfaction. Well-trained, motivated employees deliver exceptional customer service, improving customer loyalty and brand reputation. Continuous training programs, mentorship opportunities, and recognition initiatives can boost employee morale, leading to a positive work environment and increased overall productivity. Conclusion In conclusion, General Electric (GE) can overcome its financial challenges and achieve sustainable competitive advantage by implementing the proposed recommendations and

strategies. Through meticulous cost optimization, diversification, debt restructuring, innovation, customer relationship management, and supply chain optimization, the company can navigate its financial difficulties effectively. Timely execution, combined with adaptability to market changes, will be pivotal in securing a prosperous future for General Electric (GE) in the highly competitive business landscape.

References: Müller, B., Hoffmann, F., Heckelei, T., Müller, C., Hertel, T. W., Polhill, J. G., ... & Webber, H. (2020). Modelling food security: Bridging the gap between the micro and the macro scale. Global Environmental Change , 63 , 102085. Nze-Ekpebie, R., & Udealor, L. (2023). Global Supply Chain Effects on Medical Devices. In Global Supply Chain Effects on Medical Devices: Nze-Ekpebie, Ruby| uUdealor, Luke . [Sl]: SSRN. Safitri, V. A., Sari, L., & Gamayuni, R. R. (2020). Research and Development (R&D), Environmental Investments, to Eco-Efficiency, and Firm Value. The Indonesian Journal of Accounting Research , 22 (3).

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