GE Stoplight Model Exercise Scenario.

You have been assigned to a team tasked to interpret the results (shown below) of a senior-level management analysis of three potential growth opportunities (i.e. markets). The managers' raw output is worded in terms that will require a bit of translation to enable you to place values on them for entry into a model. Your company, GoggleTran, manufacturer of a wide variety of transport systems (conveyors, rail, automated warehousing) has narrowed a large array of growth opportunities to these three: 1) Third Party Warehousing would involve being the sole source for companies' inventory needs, both internally and via storing and shipping finished goods to their customers. From improving the warehousing systems to installing and servicing them, GoggleTran will also do training and any other necessary after-sale services. 2) Government Systems would involve GoggleTran in designing and implementing storage and rail systems for federal and state government needs. From warehouse re-design and management to high-speed rail systems, GoggleTran would partner with government and quasi-government entities to build and maintain storage and transportation solutions. 3) New Facility Design would entail the ground-up design of all transport needs for companies building new manufacturing facilities. GoggleTran would be in on the design phase from the beginning of such projects, rather than retrofitting and/or replacing previous designs as in the first two options.

The senior managers have debated the pros and cons of each of these options and now are expecting you and your team to produce a clear summary of the options that will allow them to make their final decision. Given limited resources, they will choose one, perhaps two, of the opportunities, so your input is critical.

Your task: Create a model that will succinctly display the options and write one paragraph discussing your recommendation for the best one(s) to choose. Turn in 1) the model (2 Fishbein models, one per dimension of the GE Model, 2) a graphic depiction of its results, and 3) your recommendation(s).

Opportunity -> Third Party Warehousing Government Systems New Facility Design SAMPLE OF MODEL Attractiveness Size ($millions) Growth Rate (%) Competition Legal/Political Issues 10000 20 Strong 20000 4 Moderate 15000 10 Weak Ten Coach Strategy Formulation GE Multifactor Business Portfolio Matrix Complex Highly Complex Simple Invest HIGH Selective Investment Grow Invest Grow Opportunity -> Third Party Warehousing Government Systems New Facility Design Business Position MEDIUM Harvest Divest Selective Investment Inwest/ Grow Weak Strong Strong LOW Harvest Divest Harvest Divest Selective Investment Moderate Strong Business Strength Technology Position Human Resources Capability Production Capacity Positioning Moderate Adequate Low Adequate LOW MEDIUM HIGH Industry Attractiveness Source: GE & McKinsey & Co. 1000ventures.com Strong Weak Very Strong