GE’s Growth Strategy: The Immelt Initiative
1. How difficult was the task Immelt faced when he assumed the CEO role in 2001? Any imperative changes? Any incentives to maintain the past operation?
Four days after Immelt taking the CEO role, the 9/11 attacks occurred. The incident destabilized the post-Internet-bubble stock market, and also triggered a downturn in an overheated economy, leading to a fall in confidence that soon spread into other economies worldwide. The global economics is faced with turndowns. The stock price of GE kept dropping. The bankruptcy of Enron made the situation ever worse. Apart from the market pressure, Immelt also realized that the strategy of GE is no longer work for making double-digit profit increase every year anymore. He believed that GE has to generate its own growth which is driven by innovation. For the incentives to maintain the past operation, Immelt would like to build on the core elements of the company’s past success, which are strong businesses portfolio, bound through a set of companywide strategic initiatives and great people in a culture that was performance driven and adaptive. All this capabilities was the inimitable competitive advantage for GE.
2. Was Immelt’s approach to taking charge different from Jack Welch’s first few years after becoming CEO in 1981? Did they face similar tasks?
Both Immelt and Welch had to come up with a business plan after becoming CEO. They had to stick with their plan with modification time to time. They both tried their best to implement their plan seriously. The differences between them were that the economic environment was not the same in 1981 and 2001. Therefore, they had different approach to taking charge.
Jack Welch transformed GE to become a highly disciplined, extremely efficient machine that delivered consistent growth in sales and earnings. GE then had an organic growth of 5% annually through its effective operations management and a continuous stream of timely...