BUSINESS MARKETING ASSINGMENT ON GE.

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Submitted By:Anjanesh Choubey-JIML-11-017 Raju Kumar Sharma-JIML-11-FS-042 Vikas Singh-JIML-11-FS-060 Pankaj Kumar-JIML-11-108 Abhishek Rawat-JIML-11-RM-029

INTRODUCTION

Thomas Edison and GE

1876 was also the year that Thomas Alva Edison opened a laboratory in Menlo Park, New Jersey, where he could explore the possibilities of the dynamo and other electrical devices that he had seen in the Exposition. Out of that laboratory was to come perhaps the greatest invention of the age - a successful incandescent electric lamp. By 1890, Edison established the Edison General Electric Company by bringing his various businesses together. During that period, a competitor emerged. The Thomson-Houston Company became a dominant electrical innovation company through a series of mergers led by Charles A. Coffin, a former shoe manufacturer from Lynn, Massachusetts. As both businesses expanded, it had become increasingly difficult for either company to produce complete electrical installations relying solely on their own patents and technologies. In 1892, the two companies combined. They called the new organization the General Electric Company. Several of Edison's early business offerings are still part of GE today, including lighting, transportation, industrial products, power transmission, and medical equipment. The first GE Appliances electric fans were produced at the Ft. Wayne electric works as early as the 1890s, while a full line of heating and cooking devices were developed in 1907. GE Aircraft Engines, the division's name only since 1987, actually began its story in 1917 when the U.S. government began its search for a company to develop the first airplane engine "booster" for the fledgling U.S. aviation industry. Thomas Edison's experiments with plastic filaments for light bulbs in 1893 led to the first GE Plastics department, created in 1930. GE's leaders through the years have built a diverse portfolio of leading businesses; a stream of powerful company-wide initiatives that drives growth and reduces cost; financial strength and Controllership that allow it to capitalize on opportunities through numerous cycles; and a set of common values that allows it to face any environment with confidence. GEs presence in India dates back to 1902 when we installed Indias first hydropower plant. Today we bring the best of GE to India by creating technologies and innovations in India, for India. Our local research centres are developing new technologies for India and the world. Our local manufacturing facilities are bringing our products, services and technologies closer to our customers. A long-term player across transportation, energy, healthcare and financial services with 14,500 employees, GE is committed to partnering India in its growth and development. With a significant footprint in the country, we believe it is our people and our integrity that truly

defines us. Integrity and compliance are non-negotiable at GE. As we do business, we do it the right way. GE in India at a glance 1902 : Set up India's first hydro power plant in Karnataka 1969 : Set up nuclear reactors at Tarapore 1982 : GE engines power Indian Airlines and Air India 1986 : Partnership with BHEL for Gas Turbines 1989 : JV with Wipro: GE Healthcare established 1998 : JV with SBI established 1998 : Pioneered Business Process Outsourcing 1999 : Established JFWTC at Bangalore 2003 : The first engine for the LCA-Tejas is delivered 2010 : Wind facility at Pune 2010 : JV with Triveni for steam turbines 2010 : 10 years of GEs Technology Center at Bangalore 2011 : Tejas achieves Initial Operating Clearance with F404IN20 engines

Local partnerships Driven by focus on meeting needs of Indian customers and developing localized solutions, GE has partnered with a number of Indian companies across businesses including, energy, infrastructure and financial services.

John F. Welch Technology Center (JFWTC) The John F. Welch Technology Center (JFWTC) in Bangalore is GEs largest integrated multidisciplinary Research and Development Center, and the first to be located outside the US. Over 4000 scientists, researchers and engineers are helping redefine what is possible in the energy, transportation, aviation, healthcare, and consumer and industrial, financial and entertainment business. Over the last decade, the work done by inventors at the Center alone has resulted in over 1,500 patents being filed by the General Electric Company. The key technologies that the center has worked on during the tenure include a Powerhaul Locomotive that serves the transportation sector, the new baseline turbofan engine called LEAP-X for the aviation industry, Healthcare products like the Lullaby Infant Warmer and MAC 400 Ultra-portable ECG among many others. In addition to Bangalore in India, GE has Research Centers in New York (US), Shanghai

(China), Munich (Germany) and Rio De Janeiro (Brazil) that are helping create gamechanging technologies and innovations to ensure GE's growth and leadership. Hyderabad Technology Center Hyderabad Technology Centre (HTC), a part of Energy Engineering Division & India Engineering operations is a global engineering team located at Hyderabad. It began as a 185 member Energy Engineering team in 2006. In the five years since its inception, HTC has undergone tremendous growth and has become a hub of excellence for technology from Exploration to Utilization of Energy. The center is home to complete engineering teams for Controls & Power Electronics, Renewables SCADA software & controls, Jenbacher Controls, Industrial Solutions, Digital Energy & Software Solutions Group, MCS-Sensing, Oil & Gas Electrification and Electronics. The 750 plus strong team has been making rapid strides in creating Intellectual Property (IP) for GEs Energy business and has many IDLs and successful patents filed since 2008 and has many more in the pipeline. HTC is among the top five sites for Energy Engineering in terms of total number of engineers and is developing itself to be the center of excellence in the areas of Software, Electronics Design, Embedded Systems design and electromechanical design for Energy products and services. Ecomagination Ecomagination focuses on advanced technologies that enable GE to meet customer demands for cleaner and more energy efficient products. Ecomagination reflects GEs commitment to invest in a future that creates innovative solutions to environmental challenges and delivers valuable products and services to customers while generating profitable growth for the company.

Healthymagination GEs Healthymagination vision for the future invites the world to join us on our journey as we continuously develop innovations in the area of healthcare focused on reducing costs, increasing access and improving quality and efficiency around the world. GE Energy comprises GE Oil & Gas, GE Power & Water and GE Energy Management working together to provide integrated product and service solutions in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as wind, solar and biogas; and other alternative fuels. GE Capital offers a wide portfolio of product structures that suit their unique needs and grow their business including fund for business expansion, growth equity capital, local or cross-border financing, or buying/leasing assets such as corporate aircrafts, automobiles or equipment. We offer home mortgage and home equity products to retail customers in India.

 GE Transportation is a supplier to the railroad, marine, drilling, wind and mining industries. It provides cutting-edge freight and passenger locomotives, railway signaling and communications systems, information technology solutions, high-quality replacement parts and value added services. GE Aviation is the worlds leading producer of large and small engines for commercial, military, business and general aircraft, as well as avionics, electric power and mechanical systems. GE Healthcare presence in India spans across Healthcare Systems (Diagnostic Imaging, Patient Monitoring, Life Support Systems, Home Health, Maternal Infant Care), Surgery, Healthcare IT, Life Sciences and Medical Diagnostics. GE Lighting offers a wide range of best in class LED Products, Luminaries, Lamps and Control Gears (Ballasts). GE Appliances portfolio comprises refrigerators, room air conditioners, air purifiers, dehumidifiers, microwave ovens, speed cooking ovens and water filtration, softening and heating systems. GE Intelligent Platforms is a global provider of software, hardware, services, and expertise in Process Automation, Discrete manufacturing, business process management, and embedded computing. John F Welch Technology Center, Bangalore, and Hyderabad Technology Centre are GEs research and development centers in the country. BHEL SBI Wipro Triveni

Corporate Citizenship GE aspires to be a leader in corporate citizenship. At GE, corporate citizenship is not merely a program or a set of good intentions, but a set of behaviors and actions that are integrated with the business strategy of the company. Being a good corporate citizen is a full-time commitment with the same kind of goals, strategies and accountabilities that drive any other part of our business. GE is committed to investing in a corporate citizenship framework that

is based on strong economic performance of the Company, rigorous compliance with legal and fundamental ethical requirements and taking ethical actions beyond compliance to increase long-term value. GE Volunteers: GE Volunteers is a global community service organization of more than 52,500 GE employees and retirees in 143 chapters with a presence in 44 countries. GE Volunteers are committed to improving their communities, their company and their lives through volunteerism, leadership and camaraderie. The India Volunteers team has over 3,500 members and has grown to five chapters - New Delhi, Bangalore, Hyderabad, Chennai and Mumbai. In 2011, GE Volunteers spent over 23,500 volunteer-hours, partnering with 35 notfor-profit organizations to support projects across 12 Indian cities. GE Foundation: GE Foundation, the philanthropic foundation of the GE, invests in improving educational quality and access as well as strengthening community organizations around the world. The GE Foundation India Scholarships are awarded to students who have the potential to become future leaders and who are pursuing post graduate courses in engineering, science and management. The GE Foundation has awarded scholarships to over 260 students across 25 institutes amounting to US $1,371,000. Selection criteria include not just an excellent academic record, but also strong leadership and good citizenship qualities. These grants reiterate GE's high confidence in India's rich intellectual capital.

The GE Women's Network is a voluntary organization formed to support the professional development of women at GE. It was established to build a pipeline of high potential women in senior leadership roles. Development is focused on leadership, advancement and careerbroadening opportunities through a variety of tools, including information, education, leadership interaction and networking with other women to share and learn best practices. Launched in India in 2002, the GE Womens Network has a vibrant presence across key locations of GE in the country.

Marketing mix of General electric

Product

General Electrics capital finance segment includes commercial loans, operating leases, home loans, credit cards, and personal loans.

GEs technology division produces Intrusion and fire detection products, card access systems, aircraft replacement parts, jet engines, medical diagnostics, medical imaging as well as patient monitoring equipment. The company also provides products related to energy infrastructure such as wind turbines, gas turbines, water purification systems, and aircraft engine derivatives. General Electrics NBC Universal Division operates cable networks, and produces motion pictures. Products produced in GEs Consumer and Industrial Division includes refrigerators, washers, microwave ovens, residential air conditioners as well as electric and gas rangers.

Price

General Electric introduced a Power by the Hour program for its aircraft engines, in recognition that its customers were not merely purchasing its airplane engines, but also the ability to minimize downtime through its maintenance and service initiatives. In 2004 GE raised prices in for its Infrastructure Water and Process technology customers as a result of increasing cost pressures in a global economy, citing marketplace conditions for water treatment solutions which made it more expensive to do business. General Electrics healthtmagination initiative involves the reduction of prices in its medical imaging imaging and diagnostics business as a result of reduced customer spending in these areas.

Place

General Electric is headquartered in Fairfield Connecticut, at 3135 Easton Turnpike. GE has subsidiaries located in Singapore, Mexico, Munich, China and Ontario Canada General Electric has global business projects including Southeast Asia, Northern Asia, Austrialia/New Zealand, Africa, Latin America and Europe.

Promotion

In 2001, General Electric selected Responsys, Inc., as the preferred vendor to implement GE Services Network's email marketing programs. GEs slogan we bring good things to life is among the most recognizable in the world. General Electric has used co-branding to market its products, including Culligan, Calphalon and Lenox.

Process

The General Electric Company, with the assistance from the Boston Consulting Group and McKinsey and Company, pioneered the nine cell strategic business screen used to identify the most favorable position with attractive growth opportunities as well as competitor strength.

In the 1950s GE produced the famous "blue books" -- five volumes of detailed guidance for its managers. GE management has utilized techniques such as leadership development, Work Out, and Six Sigma. Current GE leadership is reemphasizing its scientific research labs and marketing function. General Electric undertakes a constant appraisal process that involves firing its bottom 10% employees each year. GE strives to accomplish its goals with four core values in mind: imagine, solve, build, and lead. General Electric (GE) had used the Lateral Diversification Strategy as its growth strategy marketing new products or services that have no technological or commercial synergies with current products, but which may appeal to new groups of customers.

Physical Evidence

Russia has been one European country in which GE has made significant investments including an equipment fleet with more than 1,500 large units. The Middle East is diversifying beyond its oil-based economy with explosive development. GE is enabling growth with crucial investments of infrastructure resources such as oil and gas as well as aviation. GE is helping to build the infrastructure of Indonesia. GE has subsidiaries located in Singapore, Mexico, Munich, China and Ontario Canada

People

Jeffery Immelt is the current chairman of the board and chief executive officer of GE. General Electric employs an integrity policy called The Spirit & The Letter which every employee supports with a signed pledge. GE employs an ombudsmen process which encourages employees to report unethical activities without fear of reprisal. General Electric implements flexible work arrangements in order that employees may achive a work and life balance. General Electric provides an employee and retired employee outlet store with discount products. GE utilizes skills-based customer service routing technology, GE directs your call to the service or support rep most qualified to answer your question.

Marketing Strategy of General Electric

The General Electric Company, or GE, is an American multinational conglomerate corporation incorporated in the State of New York. The Company operates through five segments: Energy Infrastructure, Technology Infrastructure, NBC Universal, Capital Finance and Consumer & Industrial. In 2010, Forbes ranked GE as the world's second largest company, based on a formula that compared the total sales, profits, assets, and market value of several multinational companies. The company has 304,000 employees around the world

So income Strategic Business Units (SBU's). A large corporation may have many SBU's, which essentially operate under the same strategic umbrella, but are distinctive and individual. A loose example would refer to Microsoft, with SBU's for operating systems, business software, consumer software and mobile and Internet technologies. Growth/share are replaced by competitive position and market attractiveness. The point is that successful SBU's will go and do well in attractive markets because they add value that customers will pay for. So weak companies do badly for the opposite reasons. To help break down decision-making further, you then consider a number of sub-criteria: For market attractiveness: * Size of market. * Market rate of growth. * The nature of competition and its diversity. * Profit margin. * Impact of technology, the law, and energy efficiency. * Environmental impact. ...and for competitive position: * Market share. * Management profile. * R & D. * Quality of products and services. * Branding and promotions success. * Place (or distribution). * Efficiency. * Cost reduction. At this stage the marketing manager adapts the list above to the needs of his strategy. The GE matrix has 5 steps: * One - Identify your products, brands, experiences, solutions, or SBU's. * Two - Answer the question, What makes this market so attractive? * Three - Decide on the factors that position the business on the GE matrix. * Four - Determine the best ways to measure attractiveness and business position. * Five - Finally rank each SBU as either low, medium or high for business strength, and low,

medium and high in relation to market attractiveness. Now follow the usual words of caution that go with all boxes, models and matrices. Yes the GE matrix is superior to the Boston Matrix since it uses several dimensions, as opposed to BCG's two. However, problems or limitations include: * There is no research to prove that there is a relationship between market attractiveness and business position. * The interrelationships between SBU's, products, brands, experiences or solutions is not taken into account. * This approach does require extensive data gathering. * Scoring is personal and subjective. * There is no hard and fast rule on how to weight elements. * The GE matrix offers a broad strategy and does not indicate how best to implement it. For many consumers, General Electric means one of three things: major appliances, lightbulbs and the company that David Letterman used to skewer every chance he got when he worked for its subsidiary NBC. Yet despite its renown, its ubiquitous "We bring good things to life" tag and its decades-old brand equity, GE Appliances (GEA) has been looking for a little help in making the sale to consumers through co-branding and co-marketing agreements with other known brands, including Culligan, Calphalon and Lenox. GEA shipped its first co-branded product late last summer when it introduced its Water by Culligan Profile Performance refrigerator. Part of GFA's new Profile Performance line, the fridge is targeted toward professional adults ages 30-45 with household incomes ranging from $50,000 to $150,000; it offers a built-in Culligan water filtration system. The product bears both the GE and Culligan logos and a TV spot, running now,, plays up the Water by Culligan connection. "We're pitching the quality of life and the convenience," said Bruce Albertson, GEA vp of marketing. "The partnership between GE Appliances and Culligan is a natural blending of each company's consumer strengths." The co-branded refrigerator may seem, at first, to be at odds with Ge's own fledgling SmartWater line of home filtration and softening products, but the strategy, Albertson said, is complementary. Consumers who aren't in the market for a refrigerator can buy SmartWater point-of-entry systems. The Water by Culligan product is viewed as simply another option, even offering filtered ice cubes. "We wanted to go with a value-added name and brand you can trust in water filtration," Albertson said. "The most broadly known name in water is Culligan." GEA began aggressively seeking out partners that were No. 1 or No. 2 brands in their respective categories more than a year ago as part of a strategy to develop products that would deliver higher margins to the company and greater benefits to consumers. GEA also wants to make inroads in the high-end appliance segment, which has experienced doubledigit growth in the past couple of years, aided by strong economic conditions; namely low interest rates, which have fueled new home sales and renewed interest in home remodeling. "When we began to explore the possibility of a partnership, we conducted research and learned that when the two names were combined, consumer awareness skyrocketed," said Ron Rosati, Culligan's group president for point-of-use and retail markets.

GEA has also entered into co-marketing and technology-sharing initiatives with high-profile brands that will help it aggressively boost market share (it's now No. 2 behind Whirlpool), and to offer unique, value-added products that also fetch higher margins. While appliance companies regularly do tie-ins, such as offering product samples of, say, Tide or Cascade with the purchase of a washing machine or dishwasher, few, if any, have embarked on full-fledged co-marketing initiatives like GEA has. GEA approached Calphalon, the well-known marketer of high-end cookware, in April 1997 about doing a value-added promotion with its Profile Performance electric range. The range features an oval-shaped bridge burner that enables more cooking flexibility and distributes heat more evenly. The first promo of the co-marketing relationship ran October/November 1997 and offered a free Calphalon oval roast pan and 11-inch square griddle with every range purchase via mail-in certificate. Calphalon's demographic, highly educated adults 40-55 with average annual incomes of more than $80,000, fit nicely with GEA's Profile Performance line. The alliance helped Calphalon in several ways. "We are kind of a niche out there at the very high-end and, because we have very limited distribution, there are a lot of consumers not familiar with the brand," said Ray Hykoski, marketing manager at Calphalon. The partnership helped Calphalon get into the hands of consumers who might not have considered it before, and helps serve as a springboard for people who may be afraid to invest in high-end cookware. Calphalon also gets the names of consumers who purchase the range and expects to enter them into its database for follow-up "thank you" cards with its 800-number and Web site. It also plans to approach these purchasers with future targeted mailings. The successful promo, which has helped GEA rev range sales, has begun again, and is running currently through March. Hykoski said he expects a similar promo using a different Calphalon piece to be extended into GEA's ultra high-end Monogram line in 1999. The co-marketing alliance may also lead the two partners to jointly develop new cookware and cooking technologies. A co-branded GE/Calphalon range? Not outside the realm of possibility, according to Hykoski. GEA's co-marketing arrangement with Lenox is a value-added promo with a technologysharing component. GEA and Lenox engineers worked together to develop a new feature for GE SureClean dishwashers that helps maintain the quality of stemware and chin

SWOT analysis of GE (General Electric Company)

Strengths GE is strongly recognized in the industry. The company is one of the leading firms in most of the major industries in which it participates. In the energy infrastructure business, the company is a leader in the field of development, implementation and improvement of products and technologies that harness resources such as wind, oil, gas and water. It is a leading provider of integrated gasification combined cycle (IGCC) technology design and development. The companys GE Capital is a strong, focused business model with leading positions in several mid-market, corporate and consumer financing segments. The company is also one of the worlds leading providers of aircraft engines and services. Further, the companys NBC Television Network is one of the four major commercial broadcast television networks in the US. The companys technology infrastructure is one of the worlds leading providers of essential technologies to developed, developing and emerging countries. The company also offers leading drive technology solutions to the mining, transit, marine and stationary, and drilling industries. In addition, the company has been receiving many awards and recognitions for its products and services. For instance, in 2011, Fortune Magazine ranked GE as the sixth largest firm in the US, as well as the 14th most profitable. The company was also ranked as the seventh largest global company by Fortune and fifth best global brand by Interbrand in 2011. Additionally, GE was also ranked as the 82nd green company by Newsweek, 13th most admired company by Fortune, and 19th most innovative company by Fast Company. A strong recognition across varied categories has ensured its status as one of the strongest players in the industry. It will further enhance the brand image of the company and gives it a competitive advantage. Diversified product portfolio and balanced revenue streams GE has one of the most diversified technology, media, and financial services corporations in the world. It operates through five segments including, GE Capital, technology infrastructure, energy infrastructure, NBC Universal, and home and business solutions. GE Capital segment offers a broad range of financial products and services including commercial loans, operating

leases, fleet management, financial programs, home loans, credit cards, personal loans and other financial services. The technology infrastructure segment provides various essential technologies worldwide. It helps in building healthcare, transportation and technology infrastructure. Similarly, energy infrastructure segment is engaged in the development, implementation and improvement of products and technologies that harness resources such as wind, oil, gas and water. It includes energy, oil and gas, and water and process technologies business. The NBC Universal segment is engaged in the broadcast of network television services to affiliated television stations within the US. It also operates cable/satellite networks around the world, theme parks, and investment and programming activities in multimedia and the internet. Further the home and business solutions segment provides home appliances including refrigerators, freezers, electric and gas ranges, dishwashers, clothes washers and dryers, microwave ovens, room air conditioners, and residential water systems for filtration, softening and heating. It also provides electrical equipment and systems including transformers, meters, relays, circuit breakers, panel boards and general purpose controls. In addition to the diversified product portfolio, the company has developed a well balanced revenue streams. For instance in FY2010, the companys largest business division, GE Capital accounted for 31.4% of the total revenues, followed by technology infrastructure segment which contributed 25.8%; energy infrastructure segment contributed 25.5%; NBC Universal segment contributed 11.5%; and home and business solutions segment which contributed for the remaining 5.8%. Broad product portfolio enables the company to provide end-to-end solutions and tap high value customers. In addition, it also helps the company to balance revenues in the face of a slowdown in a particular segment. Strong presence in growth markets The company has a strong presence in the growing markets worldwide. As of December 2010, the company had generated $30 billion of industrial revenue from growing markets, which include regions such as Middle East, Africa, Canada, Australia, Russia, Latin America, China and India. In addition, this revenue expanded by more than 10% annually over the last decade. These markets are investing trillions of dollars in infrastructure and favor a multibusiness company that can bring solutions. This allows the company to form a company-tocountry approach in countries where government and business work together to solve infrastructure needs. GE is accelerating localization of capability in order to lower costs and leverage talent. For instance, in November 2010, the company created its fifth Global Research Center, located in

Rio de Janeiro. In the same month, the company announced to increase its manufacturing investments in Brazil across energy, oil & gas, healthcare, transportation and aviation. This broad capability gave GE the ability to better serve its customers in Brazil, while allowing the company to grow its exports. The companys share in emerging markets is comparable to the US; its margins and service penetration are similar to the developed world; and the company is committed to a cost position that can compete globally, sometimes by positioning with local players. GEs strong position in the emerging markets propels its organic revenue growth in the near term. Extensive research and development (R&D) capabilities GE has robust R&D facilities. It operates its R&D facilities mainly through GE Global Research. It is the hub for technology development for all of GEs businesses, with 10 global laboratories organized by scientific disciplines all focused on leveraging the companys technology breakthroughs across multiple GE businesses. In addition, the center is focused on developing breakthrough innovations in areas such as molecular imaging and diagnostics, energy conversion, nanotechnology, advanced propulsion and security technologies. GE Global Research is headquartered in Niskayuna, New York; and has facilities in Bangalore, India; Shanghai, China; and Munich, Germany. In addition, the company has approximately 36,000 technologists working across its businesses and global research centers to solve some of the worlds toughest problems. Some of the companys research and developments include the development of next generation baggage screening systems for security, in medical imaging; application of aerodynamics and carbon composites technologies to find new solutions to scale up wind power; and drawing expertise in its biology labs to develop molecular medicine. Robust R&D capabilities enable the company to have an edge over its competitors. In addition, it also helps the company to develop more efficient products and technologies and serve its customers more efficiently. Weaknesses Legal proceedings likely to hamper corporate image The company is involved in various lawsuits, claims and legal proceedings. For instance in May 2010, Mitsubishi Heavy Industries (Mitsubishi) filed antitrust and patent-infringement lawsuits against GE. Mitsubishi accused GE due to its attempts to monopolize the US market for variable-speed wind turbines and violating a key patent of the company. The company is

seeking damages in excess of $1 billion. Similarly in 2008, shareholders filed complaint against the company and its Chief Executive Officer for making false and misleading statements that artificially inflated the stock price. In addition, Environmental Protection Agency (EPA) issued a notice of violation against GE alleging non-compliance with the Clean Air Act at a power cogeneration plant in Homer City, the US. The series of litigation against the company indicates lack of internal control and may hamper its image in the market. Dependence on third parties for raw materials The company is reliant on third-party suppliers, contract manufacturers and service providers and commodity markets to secure its raw materials, parts, components and sub-systems used in its products. This reliance exposes GE to volatility in the prices and availability of these materials, parts, components, systems and services. A disruption in deliveries from the companys third-party suppliers, contract manufacturers or service providers, capacity constraints, production disruptions, price increases, or decreased availability of raw materials or commodities, could have an adverse impact on GEs ability to meet its commitments to customers or increase its operating costs. Quality issues experienced by third-party providers can also adversely influence the quality and effectiveness of the companys products and services and result in liability and reputational harm. High debt burden GE has a high level of indebtedness, which could adversely impact its financial condition and future operations. The companys total debt (short and long term) amounted to $411,282 million in FY2010. At the same time, the share holder equity of the company stood at $118,936 million, representing a debt equity ratio of 3.5%, which is significantly high according to the industry standards. As a result of high debt, the interest burden of the company could increase in the period of rising interest rates. In FY2010, the interest coverage ratio of the company declined to reach 1.9, as compared to 2.5 in FY2007. The companys substantial debt limits its ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements which is a disadvantage to the company. Opportunities Positive outlook of the US healthcare market The US healthcare sector is providing positive growth opportunities for the company. According to the industry sources, the total US healthcare expenditures increased from $738

billion in 2005 to $1,097.9 billion in 2011. It is also estimated that the US healthcare spending is expected to be $1,099 billion in 2012 and $1,537.6 billion in 2016. Health related spending in the US accounted for 23.4% of GDP in 2011, and is expected to grow to 23.9% of GDP by 2016. GEs healthcare business provides healthcare related services to various segments of the industry including medical imaging and information technologies, medical diagnostics, patient monitoring systems, disease research, drug discovery and biopharmaceutical manufacturing technologies. Hence, an increase in healthcare spending would help the company in bolstering its business and in increasing its revenues. Growing demand for commercial airplanes The demand for commercial airplanes is expected to grow over the next few years. Emerging economies, evolving airline networks, expansion of low cost carriers and the increasing number of mega-cities as well as traffic growth and the replacement of older less efficient aircraft with more eco-efficient airliners are factors driving demand for new aircraft. According to Airbus forecast report, the worlds fleet, which includes both passenger (from 100 seats to very large aircraft) and freighter aircraft, will grow from 15,750 beginning of 2009 to nearly 25,850 by 2029. During the same period, increasing demand for passenger aircraft will originate from airlines in the US, China and the UK, with its mix of global, lowcost and charter airlines. The demand for commercial airplanes worldwide increases the demand for the aircraft engines and jet engines manufactured by GE. The companys aviation business provides jet engines, turboprop, turbo shaft engines, and related replacement parts for use in commercial aircraft. GE has invested more than $10 billion in R&D over the past decade to serve its military and commercial aviation customers. In addition, the company has been receiving large orders for its aircraft engines from major airplane manufacturers in the recent past. For instance, in August 2011, GE Capital Aviation Services, the commercial aircraft leasing and financing arm of GE, finalized a firm order from Boeing for two 747-8 Freighters and eight 777-300ERs airplanes valued at $2.9 billion. Therefore, the growing demand for commercial airplanes and the companys significant operations across the world would position the company in attracting more number of aviation contracts. Expansion into Russian healthcare and energy markets The company is expanding its business to various geographies to enhance its business reach. The company is establishing new joint ventures in fast growing markets such as Russia,

Brazil and China. For example in September 2011, the company has entered into joint ventures in energy and healthcare markets in Russia valuing at approximately $15 billion. In the energy sector, the company signed a joint venture with Inter Rao UES and United Engine Corporation (UEC). The new joint venture would manufacture, sell and service energy-efficient heavy-duty gas-fired power generation turbines. The facilitys production capacity helps to address the need in Russia for high-performance, mid-sized power blocks in combined heat and power applications. According to Russias Energy Ministry, the country needs to invest approximately $80 billion in the next 10 years to replace and expand aging generation assets. In addition, the Russian government forecasts estimate a requirement for 80 gigawatts of new thermal power generation capacity in the next 20 years. According to the Ministry, the average efficiency of gas-fired power stations in Russia is 38%, with a goal of 53% efficiency by 2030. Similarly, in the healthcare sector, the company signed a new joint venture with Russian Technologies in September 2011. This joint venture would manufacture, assemble, sell and service a wide range of medical diagnostic equipment including CT scanners, angiographs, MRI, ultrasound, digital X-ray, PET, and gamma cameras. In addition, the Russian government plans to spend more than $30 billion from 2011-2014 on healthcare equipment. With the help of both these joint ventures, the company is estimated to receive orders of energy-efficient heavy-duty gas-fired power generation turbines with total capacity of up to 5 gigawatts of power as well as thousands of medical diagnostic units in Russia. Such expansions enable the company to expand its geographical reach and help it to cater to a larger customer base. Additionally, they also help GE to increase its revenue base. Tapping into Indias growing natural gas supply GE serves the energy sector by developing and deploying technology that helps make efficient use of natural resources. The company is planning to develop the energy infrastructure needs of growing economies such as India, China and Russia. In this context, in January 2011, GE was selected by Sravanthi Energy in India, as the gas turbine technology supplier for its new power plant being constructed in Kashipur, India. Sravanthi Energy is constructing the new power plant to tap into Indias growing supply of natural gas. According to the agreement, GE would supply four Frame 6FA gas turbines and associated generators for the Sravanthi project, which is expected to generate approximately 450 megawatts of electricity in two combined-cycle blocks. GEs 6FA gas turbine is well positioned for such projects due to its output size, which meets the requirements of

combined-cycle blocks in the 100-300 megawatt range. This technology of GE helps Sravanthi Energy to meet the growing demand for cleaner, more efficient ways to address Indias rapidly expanding energy needs. In addition, in October 2010, Sravanthi Energy announced that GE won contracts totaling more than $750 million to supply technology for the 2,400-megawatt expansion of the Samalkot power plant, expected to be the largest gas turbine combined-cycle project in Indias history. These recent projects build on GEs well-established presence in India, where the company participates in a wide range of manufacturing, services and technology businesses and seeks to be a partner in Indias growth. Threats Environmental and other government regulations GE faces several environmental and other governmental regulations. It is subject to various federal, state, local and foreign environmental laws and regulations in all of the jurisdictions in which it operates. These laws and regulations cover the discharge, treatment, storage, disposal, investigation and remediation of some materials, substances and wastes. GE is involved in environmental investigations or remediation at some of its current and former facilities, and at third-party sites. The company incurred expenditure for site remediation actions of $0.2 billion in FY2010 and $0.3 billion in FY2009. Further, it expects that such remediation actions will require average annual expenditures in the range of about $0.4 billion over the next two years. In addition, the company is also involved in a dredging issue with the US Environmental Protection Agency, which is pending for peer review in 2010 and it may increase the costs of the company. Further, GEs businesses are subject to various US federal, state and foreign laws, regulations and policies. Government regulation may force the company to modify its business models and objectives or affect its returns on investment by making existing practices more restricted. The companys operations is also subject to regulatory risks from laws that reduce the allowable lending rate or limit consumer borrowing, local liquidity regulations that may increase the risk of not being able to retrieve assets, and changes to tax law that may impact the companys return on investments. Thus, compliance with such environmental and other government regulations could increase the operating cost of GE. Intense competition GE is a diversified industrial corporation. Its products and services include aircraft engines, power generation, water processing, security technology, medical imaging, business and

consumer financing, media content and industrial products. Hence, it is subject to intense competition from many peer companies in many industries. In healthcare business, GE competes with a variety of US and non-US manufacturers and services operations. Competition for these products and services is impacted by various factors which include technological competence and innovation, excellence in design, high product performance, quality of services, and competitive pricing. In media business, GEs broadcast networks, cable television networks and television stations operates in extremely competitive and dynamic markets. They are subject to advertising patterns and changes in viewers tastes and preferences. Moreover, GEs commercial lending and leasing business operates in a highly competitive environment. Its competitors include commercial banks, investment banks, leasing companies, financing companies associated with manufacturers, and independent finance companies. Competition related to the companys lending and leasing operations is based on interest rates and fees, as well as deal structure and terms. Further, consumer business of GE is subject to competition from various types of financial institutions including commercial banks, leasing companies, consumer loan companies, independent finance companies, manufacturers captive finance companies, and insurance companies. Similarly, GE Capital aviation services business operates in a highly competitive environment. Its competitors include aircraft manufacturers, banks, financial institutions, equity investors, and other finance and leasing companies. Competition is primarily based on lease rate financing terms, aircraft delivery dates, condition and availability, as well as available capital demand for financing. Some of GEs competitors include 3M, Hitachi, Honeywell, Mitsubishi Corporation, Siemens, Textron, United Technologies, among others. Hence intense competition may negatively impact the companys operations and its financial condition which may erode its market share. Economic and political risks GE conducts its operations globally in over 100 countries. In 2010, more than 53% of its revenues were generated from activities outside the US. The companys international operations are influenced by local economic environments, including inflation, recession and currency volatility. They are also impacted by political changes, some of which may be disruptive, can interfere with the companys supply chain, customers and all of GEs activities in a particular location. While some of these risks can be hedged using derivatives or other financial instruments and some are insurable, such attempts to mitigate these risks

are costly. GEs ability to engage in such mitigation has decreased or become even more costly as a result of current market conditions. Due to the increased operating costs, GEs results of operations, financial position and cash flows could be materially adversely impacted. Increased IT security threats The company is subject to various threats from increased global IT security and more sophisticated and targeted computer crime. These pose a risk to the security of GEs systems and networks and the confidentiality, availability and integrity of its data. The companys systems, networks, products, solutions and services remain potentially vulnerable to advanced persistent threats, although, the company is employing a number of measures, including employee training, comprehensive monitoring of networks and systems, and maintenance of backup and protective systems. Depending on their nature and scope, such threats could potentially lead to the compromising of confidential information, improper use of GEs systems and networks, manipulation and destruction of data, defective products, production downtimes and operational disruptions, which in turn could adversely impact the companys reputation, competitiveness and results of operations.