Summary
GE is getting out of its appliances business. As IBM and Kodak successfully transformed themselves from traditional business model to highly profitable but risky business model, Since December, 2002, The CEO of GE, Immelt has sold off more than $75 billion in GE business such as its plastics and insurance units, while spending more than $50 billion acquisitions in faster-growing sectors including wind power and aviation.
My opinion
As we learned in the business strategy class, every companies has life cycle. Life cycle is made of market introduction, rapid growth, competitive turbulence, maturity and decline. For the big conglomerate like GE has several sector which placed in various steps. The units that GE already sold like plastics and insurance are obviously regarded to be in decline step. In other hand, The units that GE has been bought like wind power and aviation are regarded as a rapid growth
sector.
While GE has been bought and sold several sectors, the important thing that I think is the timing. It isn’t difficult to realize which industries are going up and which industries are going down. However, it is quiet different even for the CEO level business men to decide when is the right moment to maximize the profit and minimize the loss. If the companies bought the potential sectors too fast, it will take long to make profit out of it. If the companies bought the potential sectors too late, not only they lose market identity but also they have to struggle among numerous competitors. Therefore, we need to keep an eye on GE’s financial report whether their decision was made in the right moment or not.
GE is getting out of its appliances business. As IBM and Kodak successfully transformed themselves from traditional business model to highly profitable but risky business model, Since December, 2002, The CEO of GE, Immelt has sold off more than $75 billion in GE business such as its plastics and insurance units, while spending more than $50 billion acquisitions in faster-growing sectors including wind power and aviation.
My opinion
As we learned in the business strategy class, every companies has life cycle. Life cycle is made of market introduction, rapid growth, competitive turbulence, maturity and decline. For the big conglomerate like GE has several sector which placed in various steps. The units that GE already sold like plastics and insurance are obviously regarded to be in decline step. In other hand, The units that GE has been bought like wind power and aviation are regarded as a rapid growth
sector.While GE has been bought and sold several sectors, the important thing that I think is the timing. It isn’t difficult to realize which industries are going up and which industries are going down. However, it is quiet different even for the CEO level business men to decide when is the right moment to maximize the profit and minimize the loss. If the companies bought the potential sectors too fast, it will take long to make profit out of it. If the companies bought the potential sectors too late, not only they lose market identity but also they have to struggle among numerous competitors. Therefore, we need to keep an eye on GE’s financial report whether their decision was made in the right moment or not.
댓글 없음:
댓글 쓰기