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Saudi Electronic General Electric Company Issues Case Study Questions

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Question Description

I’m working on a Management exercise and need support.

In this module, we explored the role of the corporate headquarters and its relationship with individual businesses, and also how the corporate headquarters creates value for its individual businesses. For this week’s discussion, review Restructuring General Electric(Case 20) from your textbook. Remember, a case study is a puzzle to be solved, so before reading and answering the specific questions, develop your proposed solution by following these five steps:

  1. Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course area which apply to the situation described in the case study.
  2. Record the facts from the case study which are relevant to the principles and concepts of the course area issues. The case may have extraneous information not relevant to the current course area. Your ability to differentiate between relevant and irrelevant information is an important aspect of case analysis, as it will inform the focus of your answers.
  3. Describe in some detail the actions that would address or correct the situation.
  4. Consider how you would support your solution with examples from experience or current real-life examples or cases from textbooks.
  5. Complete this initial analysis and then read the discussion questions. Typically, you will already have the answers to the questions but with a broader consideration. At this point, you can add the details and/or analytical tools required to solve the case.

Case Study Questions:

  1. Why, during the 20th century, was GE such a successful company?
  2. What are the reasons for the collapse in GE’s financial performance during 2016–18?
  3. What advice would you give to CEO Larry Culp? In particular, would you continue with the restructuring plan initiated by the previous CEO, John Flannery, implement a more radical unbundling of GE, retain GE’s existing business portfolio or divest any of their SBUs?
  4. When commenting on student posts, clearly support your reasoning for agreeing or disagreeing with the recommendations they present.

Embed course material concepts, principles, and theories (require supporting citations) in your initial response along with at least one scholarly, peer-reviewed journal article. Keep in mind that these scholarly references can be found in the Saudi Digital Library by conducting an advanced search specific to scholarly references.

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ROBERT M. GRANT CONTEMPORARY STRATEGY ANALYSIS Te xt a Ed nd it io Cas n es N I N T H E d iti o n C o n te m po r a r y S t r ate gy A na lys i s T ex t a n d Ca s e s C o ntemporary Strategy An alysis T e xt a n d ca se s Ninth Edition Robert M. Grant Copyright © 2016, 2013, 2010 Robert M. Grant All effort has been made to trace and acknowledge ownership of copyright. The publisher would be glad to hear from any copyright holders whom it has not been possible to contact. Registered office John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com. The right of Robert M. Grant to be identified as the author of this work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought. ISBN 9781119120841 (pbk) ISBN 9781119126515 (ebk) A catalogue record for this book is available from the British Library. Set in 10/12pt ITC Garamond Std by Aptara Inc., India Printed in Great Britain by TJ International, Padstow, Cornwall To Liam, Ava, Finn, Evie, Max, Lucy, and Bobby BRIEF CONTENTS Preface to Ninth Edition xv PART I INTRODUCTION 1 1 3 The Concept of Strategy PART II THE TOOLS OF STRATEGY ANALYSIS 33 2 Goals, Values, and Performance 35 3 Industry Analysis: The Fundamentals 63 4 Further Topics in Industry and Competitive Analysis 89 5 Analyzing Resources and Capabilities 113 6 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation 139 PART III BUSINESS STRATEGY AND THE QUEST FOR COMPETITIVE ADVANTAGE 165 7 The Sources and Dimensions of Competitive Advantage 167 8 Industry Evolution and Strategic Change 205 9 Technology-based Industries and the Management of Innovation 241 10 Competitive Advantage in Mature Industries 273 PART IV CORPORATE STRATEGY 289 11 Vertical Integration and the Scope of the Firm 291 12 Global Strategy and the Multinational Corporation 311 13 Diversification Strategy 341 viii BRIEF CONTENTS 14 Implementing Corporate Strategy: Managing the Multibusiness Firm 361 15 External Growth Strategies: Mergers, Acquisitions, and Alliances 389 16 Current Trends in Strategic Management 409 Cases to Accompany Contemporary Strategy Analysis, Ninth Edition 427 Glossary Index 727 735 CONTENTS Preface to Ninth Edition xv PART I INTRODUCTION 1 1 3 The Concept of Strategy Introduction and Objectives The Role of Strategy in Success The Basic Framework for Strategy Analysis A Brief History of Business Strategy Strategy Today How Is Strategy Made? The Strategy Process Strategic Management of Not-For-Profit Organizations Summary Self-Study Questions Notes 4 4 9 12 15 21 25 28 29 30 PART II THE TOOLS OF STRATEGY ANALYSIS 33 2 Goals, Values, and Performance 35 Introduction and Objectives Strategy as a Quest for Value Putting Performance Analysis into Practice Beyond Profit: Values and Corporate Social Responsibility Beyond Profit: Strategy and Real Options Summary Self-Study Questions Notes 36 37 43 51 55 58 59 60 Industry Analysis: The Fundamentals 63 Introduction and Objectives From Environmental Analysis to Industry Analysis Analyzing Industry Attractiveness Applying Industry Analysis to Forecasting Industry Profitability Using Industry Analysis to Develop Strategy Defining Industries: Where to Draw the Boundaries 64 64 66 76 77 80 3 x CONTENTS 4 5 6 From Industry Attractiveness to Competitive Advantage: Identifying Key Success Factors Summary Self-Study Questions Notes 82 86 87 87 Further Topics in Industry and Competitive Analysis 89 Introduction and Objectives Extending the Five Forces Framework Dynamic Competition: Hypercompetition, Game Theory, and Competitor Analysis Segmentation and Strategic Groups Summary Self-Study Questions Notes 90 90 93 102 109 109 110 Analyzing Resources and Capabilities 113 Introduction and Objectives The Role of Resources and Capabilities in Strategy Formulation Identifying Resources and Capabilities Appraising Resources and Capabilities Developing Strategy Implications Summary Self-Study Questions Notes 114 114 118 126 130 136 137 138 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation 139 Introduction and Objectives From Strategy to Execution Organizational Design: The Fundamentals of Organizing Organizational Design: Choosing the Right Structure Summary Self-Study Questions Notes 140 141 144 154 161 162 163 PART III BUSINESS STRATEGY AND THE QUEST FOR COMPETITIVE ADVANTAGE 165 7 The Sources and Dimensions of Competitive Advantage 167 Introduction and Objectives How Competitive Advantage Is Established and Sustained Types of Competitive Advantage: Cost and Differentiation Cost Analysis 168 168 178 178 CONTENTS   xi 8 9 Differentiation Analysis Implementing Cost and Differentiation Strategies Summary Self-Study Questions Notes 186 197 200 200 201 Industry Evolution and Strategic Change 205 Introduction and Objectives The Industry Life Cycle The Challenge of Organizational Adaptation and Strategic Change Managing Strategic Change Summary Self-Study Questions Notes 206 207 216 221 235 236 237 Technology-based Industries and the Management of Innovation 241 Introduction and Objectives Competitive Advantage in Technology-intensive Industries Strategies to Exploit Innovation: How and When to Enter Standards, Platforms, and Network Externalities Platform-based Markets Implementing Technology Strategies: Creating the Conditions for Innovation Accessing External Sources of Innovation Summary Self-Study Questions Notes 10 Competitive Advantage in Mature Industries Introduction and Objectives Competitive Advantage in Mature Industries Strategy Implementation in Mature Industries: Structure, Systems, and Style Strategies for Declining Industries Summary Self-Study Questions Notes 242 243 250 255 258 262 263 269 270 271 273 274 274 280 282 286 286 287 PART IV CORPORATE STRATEGY 289 11 Vertical Integration and the Scope of the Firm 291 Introduction and Objectives Transaction Costs and the Scope of the Firm The Benefits and Costs of Vertical Integration 292 293 294 xii CONTENTS The Benefits from Vertical Integration The Costs of Vertical Integration Applying the Criteria: Deciding Whether to Make or Buy Designing Vertical Relationships Different Types of Vertical Relationship Choosing among Alternative Vertical Relationships Recent Trends Summary Self-Study Questions Notes 297 298 302 302 304 305 306 307 307 308 12 Global Strategy and the Multinational Corporation 311 Introduction and Objectives Implications of International Competition for Industry Analysis Analyzing Competitive Advantage in an International Context Internationalization Decisions: Locating Production Internationalization Decisions: Entering a Foreign Market Multinational Strategies: Global Integration versus National Differentiation Implementing International Strategy: Organizing the Multinational Corporation Summary Self-Study Questions Notes 13 Diversification Strategy Introduction and Objectives Motives for Diversification Competitive Advantage from Diversification Diversification and Performance The Meaning of Relatedness in Diversification Summary Self-Study Questions Notes 312 313 315 318 322 324 331 337 338 339 341 342 343 348 352 355 356 357 358 14 Implementing Corporate Strategy: Managing the Multibusiness Firm 361 Introduction and Objectives The Role of Corporate Management Managing the Corporate Portfolio Managing Linkages Across Businesses Managing Individual Businesses Managing Change in the Multibusiness Corporation Governance of Multibusiness Corporations 362 363 363 366 369 376 381 CONTENTS   xiii Summary Self-Study Questions Notes 15 External Growth Strategies: Mergers, Acquisitions, and Alliances Introduction and Objectives Mergers and Acquisitions Strategic Alliances Summary Self-Study Questions Notes 16 Current Trends in Strategic Management Introduction The New Environment of Business New Directions in Strategic Thinking Redesigning Organizations The Changing Role of Managers Summary Notes 386 386 387 389 390 391 401 406 407 407 409 410 410 415 419 422 424 424 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS, Ninth EDITION 427 1 Tough Mudder Inc.: The Business of Mud Runs 435 2 442 Starbucks Corporation, May 2015 3 Kering SA: Probing the Performance Gap With LVMH 459 4 Pot of Gold? The US Legal Marijuana Industry 466 5 The US Airline Industry in 2015 472 6 Wal-Mart Stores, Inc., June 2015 487 7 Harley-Davidson, Inc., May 2015 502 8 BP: Organizational Structure and Management Systems 516 xiv CONTENTS 9 AirAsia: The World’s Lowest-cost Airline 523 10 Chipotle Mexican Grill, Inc.: Disrupting the Fast-food Business 533 11 Ford and the World Automobile Industry in 2015 542 12 Eastman Kodak’s Quest for a Digital Future 557 13 Tesla Motors: Disrupting the Auto Industry 576 14 Video Game Console Industry in 2015 587 15 New York Times: The Search for a New Business Model 598 16 Eni SpA: The Corporate Strategy of an International Energy Major 608 17 American Apparel: Vertically Integrated in Downtown LA 628 18 Chipotle Mexican Grill, Inc.: The International Challenge 639 19 Haier Group: Internationalization Strategy 645 20 The Virgin Group in 2015 655 21 Google Is Now Alphabet—But What’s the Corporate Strategy? 668 22 Jeff Immelt and the New General Electric 681 23 Bank of America’s Acquisition of Merrill Lynch 702 24 W. L. Gore & Associates: Rethinking Management? 718 Glossary Index 727 735 Pr eface t o ninth E dition Contemporary Strategy Analysis equips managers and students of management with the concepts, frameworks, and techniques needed to make better strategic decisions. My goal is a strategy text that reflects the dynamism and intellectual rigor of this fast-developing field of management and takes account of the strategy issues that companies face today. Contemporary Strategy Analysis endeavors to be both rigorous and relevant. While embodying the latest thinking in the strategy field, it aims to be accessible to students from different backgrounds and with varying levels of experience. I achieve this accessibility by combining clarity of exposition, concentration on the fundamentals of value creation, and an emphasis on practicality. This ninth edition maintains the book’s focus on the essential tasks of strategy: identifying the sources of superior business performance and formulating and implementing a strategy that exploits these performance drivers. At the same time, the content of the book has been revised to reflect recent developments in the business environment and in strategy research and to take account of feedback from instructors. Distinctive features of the ninth edition include: ● ● ● ● ● an explicit guide of how to apply strategy analysis in order to generate strategy recommendations (see “Applying Strategy Analysis” in Chapter 1); further development of the role of stakeholder orientation and corporate social responsibility within a value creating view of the firm (see “Beyond Profit: Values and Corporate Social Responsibility” in Chapter 2); an increased emphasis on inter-industry linkages including complements, business ecosystems, and platform strategies, especially in digital markets (Chapters 4 and 9); a more comprehensive treatment of strategy implementation; while maintaining an integrated approach to strategy formulation and strategy implementation (the chapters on strategic change, technology, mature industries, global strategies, and diversification address both the formulation and implementation of strategy), Chapters 6, 14, and 15 offer a systematic approach to strategy execution; greater emphasis on cooperative strategies, especially strategic alliances (Chapter 15). There is little in Contemporary Strategy Analysis that is original: I have plundered mercilessly the ideas, theories, and evidence of fellow scholars. My greatest debts are to my colleagues and students at the business schools where this book has been xvi Preface to ninth Edition developed and tested, notably Georgetown University, Bocconi University, London Business School, City University’s Cass Business School, Cal Poly, UCLA’s Anderson School, and Mumbai International School of Business. I have also benefitted from feedback and suggestions from professors and students in the many other schools where Contemporary Strategy Analysis has been adopted. I look forward to continuing my engagement with users. I am grateful for the professionalism and enthusiasm of the editorial, production, and sales and marketing teams at John Wiley & Sons, Ltd, especially to Steve Hardman, Juliet Booker, Joshua Poole, Catriona King, Deb Egleton, Joyce Poh, Tim Bettsworth, and Dom Wharram—I couldn’t wish for better support. Robert M. Grant I INTRODUCTION 1 The Concept of Strategy 1 The Concept of Strategy Strategy is the great work of the organization. In situations of life or death, it is the Tao of survival or extinction. Its study cannot be neglected. —SUN TZU, THE ART OF WAR To shoot a great score you need a clever strategy. —RORY MCILROY, GOLF MONTHLY, MAY 19, 2011 Everybody has a plan until they get punched in the mouth. —MIKE TYSON, FORMER WORLD HEAVYWEIGHT BOXING CHAMPION OUTLINE ◆◆ Introduction and Objectives ●● Corporate and Business Strategy ◆◆ The Role of Strategy in Success ●● Describing Strategy ◆◆ The Basic Framework for Strategy Analysis ●● ◆◆ ◆◆ ◆◆ Strategic Fit A Brief History of Business Strategy ●● Origins and Military Antecedents ●● From Corporate Planning to Strategic Management How Is Strategy Made? The Strategy Process ●● Design versus Emergence ●● The Role of Analysis in Strategy Formulation ●● Applying Strategy Analysis ◆◆ Strategic Management of Not-For-Profit Organizations ◆◆ Summary Strategy Today ●● What Is Strategy? Why Do Firms Need Strategy? ◆◆ ●● Self-Study Questions ●● Where Do We Find Strategy? ◆◆ Notes 4 Part I introduction Introduction and Objectives Strategy is about achieving success. This chapter explains what strategy is and why it is important to success, for both organizations and individuals. We will distinguish strategy from planning. Strategy is not a detailed plan or program of instructions; it is a unifying theme that gives coherence and direction to the actions and decisions of an individual or an organization. The principal task of this chapter will be to introduce the basic framework for strategy analysis that underlies this book. I will introduce the two basic components of strategy analysis: analysis of the external environment of the firm (mainly industry analysis) and analysis of the internal environment (primarily analysis of the firm’s resources and capabilities). By the time you have completed this chapter, you will be able to: ◆◆ Appreciate the contribution that strategy can make to successful performance, both for individuals and for organizations, and recognize the key characteristics of an effective strategy. ◆◆ Comprehend the basic framework of strategy analysis that underlies this book. ◆◆ Recognize how strategic management has evolved over the past 60 years. ◆◆ Identify and describe the strategy of a business enterprise. ◆◆ Understand how strategy is made within organizations. ◆◆ Recognize the distinctive features of strategic management among not-for-profit organizations. Since the purpose of strategy is to help us to win, we start by looking at the role of strategy in success. The Role of Strategy in Success Strategy Capsules 1.1 and 1.2 describe the careers of two individuals, Queen Elizabeth II and Lady Gaga, who have been outstandingly successful in leading their organizations. Although these two remarkable women operate within vastly different arenas, can their success be attributed to any common factors? For neither of these successful women can success be attributed to overwhelmingly superior resources. For all of Queen Elizabeth’s formal status as head of state, she has very little real power and, in most respects, is a servant of the democratically elected British government. Lady Gaga is clearly a creative and capable entertainer, but few would claim that she has outstanding talents as a vocalist, musician, or songwriter. Nor can their success be attributed either exclusively or primarily to luck. Indeed, Queen Elizabeth has experienced a succession of difficulties and tragedies, while Lady Gaga has experienced setbacks (e.g. the cancelation of her first recording chapter 1 The Concept of Strategy   5 contract and various health problems). Central to their success has been their ability to respond to events—whether positive or negative—with flexibility and clarity of direction. My contention is that common to both the 60-year successful reign of Queen Elizabeth II and the short but stellar career of Lady Gaga is the presence of a soundly formulated and effectively implemented strategy. While these strategies did not exist as explicit plans, for both Queen Elizabeth and Lady Gaga we can discern a consistency of direction based clear goals and a keen awareness of how to maneuver into a position of advantage. Elizabeth Windsor’s strategy as queen of the UK and the Commonwealth countries may be seen in the role she has created for herself in relation to her people. As queen she is figurehead for the nation, an embodiment of the stability and continuity of the nation, a symbol of British family and cultural life, and an exemplar of service and professional dedication. Lady Gaga’s remarkable success during 2008-15 reflects a career strategy that uses music as her gateway, upon which she has built a celebrity status by combining the generic tools of star creation—shock value, fashion leadership, and media presence— with a uniquely differentiated image that has captured the imagination and affection of teenagers and young adults throughout the world. What do these two examples tell us about the characteristics of a strat ...
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Running head: GENERAL ELECTRIC

1

General Electric
Student’s Name:
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GENERAL ELECTRIC

2

1. Why, during the 20th century, was GE such a successful company?
General Electric Company has expanded its business to foreign countries selling and
supplying engines, power generation, and oil and gas production equipment. It operates in sectors
such as aviation, digital industry, and the manufacturing industry. The company integrated
technology in its activities, and this resulted in increased productivity...

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