Back in $2004,$ GE$$s top management team was going through its annual

strategic planning review when the management team came to sudden

realization: six of the company core business was deeply involved in

environmental and energy $$ related projects. What was particularly striking

was that GE$$s has initiated almost all of these projects in response to

requests from its customers. They initiated data gathering effort. They made

an effort to educate themselves on the science behind energy and

environmental issues, including greenhouse gas emissions. At the same

time, GE talked to government officials and regulators to try and get a sense

for where public policy might be going.

This external review led to the conclusion that energy prices would likely

increase going forward, driven by rising energy consumption in developing

nations and creating demand for energy$-$efficient products. The team also

saw tighter environmental controls, including caps on greenhouse gas

emissions as all but inevitable. What emerged from these efforts was a

realization that GE could build strong businesses by helping its customers

to improve their energy efficiency and environmental performance. Thus was

born GE$$s ecomagination strategy. First rolled out in $2005,$ the

ecomagination strategy cut across businesses. The corporate goals were

broken into sub goals and handed down to the relevant businesses.

Performance against goals was reviewed on a regular basis; the

compensation of executives was tied to their ability to meet the goals.

The effort soon started to bear fruit. These includes a new generation of

energy of energy efficient appliances, more$-$efficient fluorescent and LED

lights, a new jet engine that burned $10\%$ less fuel, a hybrid locomotive that

burned $3\%$ less fuel and put out $40\%$ lower emissions than its immediate

predecessor, lightweight plastics to replace the steels in cars and

technologies for turning coal into gas in order to drive electric turbines,

while stripping most of the carbon dioxide $($CO$2)$ from the turbine exhaust.

By the end of its first $5-$year plan, GE had met or exceeded most of its

original goals, despite the global financial crises that hit in $2008.$ Not only

did GE sell more than $$20$ billion worth of eco$-$products in $2010,$ according

to management, these products were also among the most profitable in GE$$s

portfolio.

Questions:

$(5\backslash$times $4=20)$

$1.$ Where did the original impetus for GE$$s ecomagination strategy come

from? What does this tell you about strategy making?

$2.$ To what extent did GE follow a classic SWOT model when formulating its

ecomagination strategy?

$3.$ GE$$s CEO Jeff Immelt often states that $$green is green$.$ What does he

mean by this? Is the ecomagination strategy in the best interests of GE$$s

stockholders?

$4.$ By most reports, GE$$s ecomagination strategy has been successfully

implemented. Why do you think this is the case? What did GE do correctly?

What are the key lessons here?

$5.$ If GE had no pursued an ecomagination strategy, where do you think it

would be today? Where might it be $10$ years from now?