GE was established in 1892 when Edison General Electric merged with Thomson-Houston. The company produced lightbulbs, elevators, motors, and appliances. Early success came as a result of JPMorgan's financial backing and a focus on research and development. Over the next century GE evolved into one of the world's biggest companies, with a diverse portfolio of products and businesses. It is among the largest U.S. companies in terms of revenues, and offers an incredible variety of products, from consumer electronics and industrial power to financial services and television broadcasting. Other operating segments include plastics, aircraft engines, and technical products and services for medicine and science. Under the leadership of Jack Welch, who became GE's CEO in 1981, the company enjoyed two decades of unprecedented growth and prosperity. Welch is widely praised as a visionary business leader due to his performance at GE. He restructured the industrial giant by decentralizing the company's operations. He also sought to expand GE's business with highly profitable ventures, and worked to shed low performing businesses, such as air-conditioning and housewares. This massive restructuring came at a significant cost to GE's workforce: between 1981 and 1985, the company cut 100,000 jobs. Once the restructuring was completed Welch pursued an aggressive acquisition strategy. Some of the major acquisitions included GE's Purchases of NBC Television in 1986, and Kidder, Peabody investment bank in 1990 (which it later sold to Paine Webber). In the 1990s, Welch greatly expanded the historically small GE Capital Services with brand and insurance company acquisitions. GE Capital now operates a diverse range of 27 business, including real estate, insurance, finance, and heavy equipment leasing, and provides over 40 percent of the company's revenues. The pace increased between 1997 and 2000, during which time GE averaged more than 100 acquisitions per year. In1999, GE acquired 134 companies worth $17 billion. In 2000, Welch oversaw the company's biggest acquisition during his tenure, the $45 billion purchase of manufacturing titan Honeywell International. Today, GE has 49 strategic business units operating under the larger master brand. Despite its size, the company is able to react to the fast pace of the New Economy. In 2000, the company reorganized GE Information Systems into an e-commerce unit called GE Global Exchange Services and a support unit named GE Systems Services. These two units manage the world's largest electronic trading community, comprised of more than 100,000 trading partners. Additionally, at Welch's urging, GE employees saved billions of dollars for the company by finding ways to involve the Web in their jobs. The company developed an online network to monitor its manufacturing practices, put its human resources reviews online, and established a 24/7 service center for its plants. Welch sees GE as well-positioned to take advantage of the internet, because he thinks content is the easy part of e-commerce while "infrastructure is the hard part, and we have the infrastructure to capitalize on." (fn McGinn, Daniel, "Jace Welch Goes Surfing," Newsweek, Dec 25, 2000.) In the 20 years Jack Welch was at GE's helm, the company prospered tremendously. GE stock rose 3,098 percent between April 1981 and February 2001, compared with 896 percent growth for the S&P 500 during that same period. Once Welch named his successor--- Jeffrey Immelt, head of GE's medical imaging business - in November 2000, analysts wondered what effect the change would have on the company. Immelt, like Welch, has professed a dedication to the Internet. He describes it as "a transformational technology that is right in our sweet spot." (fn Useem, Jerry, "Meet 'Da man,'" Fortune, Jan 8, 2001.) What remains to be seen, though, is whether Immelt will conduct GE through a period of prosperity the way Welch has.

(1)Summarize the case.

(2)What problems have Jack met and how did he solve the problem? (3)Marketing would appear to be an important part of what Welch did with GE. Where and how did Welch apply some of the marketing concepts discussed in the test?

(4)If Welch returned to the company following the events of late 2001 and 2002 (September 11, 2001 and the Enron debacle), what changes do you think he might make in the GE marketing strategy?