Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

General Electric (GE) is a multinational American technology and services conglomerate incorporated in the State of New York. Its products and services include aircraft engines, power generation, water processing, security technology, medical imaging, business and consumer financing, media content and industrial products.

General Electric, one of the biggest names in industry, suffered heavily following the financial crisis and despite positive recent financial results it is yet to regain the sort of revenues it enjoyed before the recent financial crisis. The company has evaluated its strategy and has tried to become less reliant on its damaged financial services segment, GE Capital, whilst focussing more on its industrial roots. It has made some key investments in its infrastructure business having acquired oil extraction equipment producers Dresser, the John Wood Group and Wellstream Holdings. In addition, the company has moved its giant x-ray business to China where it hopes to capture some of the ever increasing demand in the emerging market.

Whilst these events represent a shift in the focus of the company towards its manufacturing businesses, GE Capital’s streamlining and debt shedding has led to such a growth in its profitability that it has more than doubled its profits in recent quarters and been the most impressive of GEs segments. Nonetheless, General Electric is by no means functioning in an easy environment and it is this segment which is most affected by the uncertain global markets. Therefore, whilst solid financial results represent an improvement for GE, it, like many large, diversified companies, is under pressure due to the current economic downturn.

Over the years the company has been known for its innovation with regards to its products and organisation. The company has won many awards for innovation, ethical practices and is consistently ranked as one of the world’s most admired companies. These accolades have gradually attached themselves to the GE brand with famous CEO’s such as Jack Welch Reginald H. Jones being highly renowned in the business world for pioneering new forms of corporate management and organisation. Current CEO Jeff Immelt sought to refresh the GE brand changing the colour scheme and creating a new slogan “imagination at work”. Furthermore, the new CEO has completely reshaped GE’s philosophy from that of a global conglomerate growing primarily through acquisition. His new image for the company is one which invests heavily in R&D, creating its own products and being a global leader in environmental responsibility.

The combination of a fast-recovering financial services segment and a successful, reinvigorated manufacturing business could well be a potent one. However, the long term benefits of its strategy are yet to be seen and given that forecasts will be dampened by recent economic events and the prospect of another recession, GE’s brand value may worsen before it gets better.

Financial results in recent periods

Results for the 2011 second quarter illustrated a fifth consecutive quarter of double digit operating income growth (18% increase to $3.7 Billion) including very strong growth in its volatile financial services division GE Capital which has managed to more than double its half year profits following a very turbulent period after the financial crisis.                          

Success of restructuring of the company

Following an unstable period during the recent financial crisis GE decided to reorganise itself in order to reduce its dependence on GE capital and invest in its industrial foundations for long term success. So far the company has seen industrial orders increase by almost a quarter, GE Capital performing extremely well and international revenues rise despite focussing on streamlining and aggressively investing in its infrastructure business. Furthermore, the company had transferred the headquarters of its major X-ray unit to China in order to capture demand in the fast growing emerging market, the first time a major product company has ever done so.

Lingering problems in some segments

General Electric has yet to entirely banish the memory of the recession and has suffered a loss in the real estate segment of its GE Capital, furthermore there were falls in profit from its energy infrastructure business primarily due to low demand in its alternative energy business. In addition, like most financial service groups, the company is still having to make provisions for losses in is capital business.

 

 

Last changed September 2, 2011

League tables

GE appears in the following brand league tables:

Rank 7 in the Global 500 2011.
Rank 6 in the Global 500 2010.
Rank 6 in the Global 500 2009.
Rank 6 in the Global 500 2008.
Rank 7 in the Global 250 2007.