Discuss this statement true or false? How does GE’s framework give it the opport

Question

Discuss this statement true or false?

How does GE’s framework give it the opportunity to be at the forefront of the markets in which it participates?

Examine your own firm or a firm you would like to work for in the light of GE’s framework and respond to the following:

Does this firm have the means to execute like GE?

Which type of resources would the firm require?

How could GE’s lessons be applied to this firm?

For years, GE has been able to be on the front front of markets through sheer size. In the past 4 years, the company had industrial revenues of over $100B, industrial operating profit of around $17B, and returned annually more than $20B cash back to investors, either in the form of dividends (around $8B) or shares buyback. (GE, 2016)
But now GE is facing a nightmare cash crunch, and for the second time since the Great Depression it had to announce that it will cut the dividend. The stock prices are at a six-year low, and even after slashing the dividend from 24 cents to 12 cents per share, dividend payments will still account for about 85% of GE's estimated free cash flow. (Egan, 2017b) These problems are self inflicted, stemming from years of questionable deal-making, needless complexity and murky accounting (Egan, 2017a).
The same factors that made GE great - diversity of investments and huge acquisitions of companies on the forefront of their respective markets, turned GE into a conglomerate too big to manage efficiently.
In the past, GE's innovations solved some of the world's toughest problems, leading in clean energy, transportation or providing affordable healthcare. But the company started late, only in the past decade, to invest in disruptive innovations, by establishing two new businesses - GE Digital and GE Additive Manufacturing. (GE, 2016)

GE is an well-established older company, well versed in providing value in stable markets. Newer companies like Amazon are more likely to succeed in an over-changing environment brought up by new technologies. Being less diversified, and separating each product line into different companies, Amazon strikes a better balance between size and efficiency.

I believe Amazon learned another important lesson from the GE's experience: Amazon hasn't been all that focused on generating profits or paying dividends, and instead chose to keep its margins razor-thin, and building long-term market share. ()

References:
GE (2016) 2016 Annual Report. Retreived from https://www.ge.com/ar2016/assets/pdf/GE_AR16.pdf
Egan, M. (2017a, Nov 20). How Decades of Bad Decisions Broke GE. Retrieved from http://money.cnn.com/2017/11/20/investing/general-electric-immelt-what-went-wrong/index.html
Egan, M. (2017b, Nov 13). GE Cuts Dividend for Second Time Since Great Depression. Retrieved from http://money.cnn.com/2017/11/13/investing/ge-dividend-cut/index.html?iid=EL
Caplinger, D. (2015, Mar 1). Why Don't These Winning Stocks Pay Dividends? Retrieved from https://www.fool.com/investing/general/2015/03/01/why-dont-these-winning-stocks-pay-dividends.aspx

Explanation / Answer

Hi,

Thanks for the question.

4 P's define the marketing strategy for any company or for a particular brand. This is the strategy to reach and market the product to the customers.

The 4 P's will be:

Product: As mentioned, the product for this particular scenario will be McChicken and Big Mac.
Price: Price generally should be according to the perception of the customers to see its worth. They should consider to price the product moderately not on a low price because that would give the feel as the quality compromised.
Place: That should be very evenly distributed across the outlets in the US. The product will be very popular so the company should be very efficient in the distribution.
Promotions: Mcdonald's is very aggressive in terms of the advertising mostly in the Tv advertisement or OOH branding.

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