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 (conveyers, 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 willchoose 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 your recommendation(s).

GoggleTran Opportunity Evaluation

Opportunity -> Third Party Government New Facility

Warehousing Systems Design

Attractiveness

Size ($millions) 10000 20000 15000

Growth Rate (%) 20 4 10

Competition Strong Moderate Weak

Legal/Political

Issues Complex Highly Complex Simple

Opportunity -> Third Party Government New Facility

Warehousing Systems Design

Business Strength

Technology Weak Strong Strong

Position

Human Resources Strong Moderate Moderate

Capability

Production Adequate Low Adequate

Capacity

Positioning Strong Weak Very Strong