# data[].attributes.body
After reading the case study, I realized how difficult it can be to manage a company that becomes too diversified. At first, GE’s strategy looked very successful, but over time the company became too dependent on financial services and started losing focus. I also found the leadership and succession part very interesting because it showed how important long-term decision making is for a company’s future. This case really helped me better understand the connection between strategy, leadership, and sustainable growth.

# data[].attributes.body
GE was pursuing unrelated diversification because it operated in many different industries, including aviation, healthcare, power, oil and gas, appliances, media, and financial services through GE Capital. The value of this strategy is supposed to come from spreading risk, using money from one business to support another, and applying strong management across different divisions.

GE lost so much market value because the company became too complex and risky. GE Capital made GE heavily exposed to financial markets, which hurt the company badly during the 2008 financial crisis. GE also made poor acquisition decisions, including Alstom and Baker Hughes, while carrying too much debt and struggling with cash flow. Instead of protecting GE, diversification made the problems harder to manage.

When Immelt said combining financial services and industrial companies was a “uniquely bad idea,” he meant that GE Capital made the company too dependent on financial markets. I agree because GE’s industrial businesses should not have been so tied to financial services. It helped during good times, but it made the whole company vulnerable when the economy weakened.

I agree with Jim Collins’ idea that a leader’s greatness is best judged after they leave. Jack Welch created strong results while he was CEO, but some risks he left behind hurt GE later. His comment about giving himself an “A” for operations but an “F” for choosing his successor shows that his leadership legacy is mixed. He was successful, but GE was not as strong long-term as it seemed.

# data[].attributes.body
After reading the case study, I think GE became too diversified and depended too much on GE Capital. At first, the strategy seemed successful because the financial side helped support the company’s other businesses. But during the 2008 financial crisis, that became one of GE’s biggest weaknesses and caused major financial problems.

I also think GE made some poor strategic decisions over time, especially with expensive acquisitions and growing too fast in too many industries. The company ended up with a lot of debt and lost a huge amount of market value.

For Immelt’s statement, I think he meant that mixing industrial businesses with financial services created too much risk for one company to manage. I agree with that because when the financial side struggled, it affected the entire company.

Finally, I partly agree with Jim Collins’ idea that leaders are judged after they leave. Jack Welch was seen as a great CEO for many years, but some of the long-term problems in GE only became clear later on.

# data[].attributes.body
GE perusing financial service and finance for GE Capital and Power plant financing.

The sources of value creation are financial services, home appliances and energy.

The GE lost $507 billions due to bad corporate strategy that was caused by 9/11 terrorist attack and 2008-2009 worldwide global financial crisis.

Diversification in the same type of industry is practical, however diversifying in the different industry is completely different business model and the fact that financial market completely crashed.

Yes, I agree with Collins’ hypothesis that greatness of the leader is known only after leader has departed. With Welch being a CEO, GE was most valuable company globally.  However, after two major market crisis the company was unable to recover with several different CEO’s, it was only going down and down.  By Collins it is not only matter when a CEO is running the company, but also after the CEO leave, that is why Welch said on interview he gave himself A for the operation of GE, but an F for the choice of successor.

# data[].attributes.body
GE was pursuing unrelated diversification, operating across industries that didn’t really connect like finance, aviation, and energy. The goal was to create value through strong management and access to capital, especially with GE Capital supporting growth. That worked for a while, but over time it created more risk than value. GE lost over $500 billion in market value due to overexpansion, heavy reliance on financial services, poor acquisitions, and too much debt. GE Capital became a major weakness during the financial crisis, exposing the company to risks that didn’t align with its industrial business. Immelt’s comment about combining financial services with industrial companies reflects this mismatch. Financial services are more volatile, while industrial operations are more stable. When combined, problems in one area can impact the entire company. I agree with his point, especially based on how things played out at GE. Looking at Jim Collins’ idea, there’s some truth to it. Welch delivered strong results during his time, but the long-term risks tied to his strategy didn’t fully show up until after he left. At the same time, later leadership decisions made things worse, so the outcome wasn’t driven by one person alone.

# data[].attributes.attachment_caption
Sorry Im still recovering from a cold 🤧 I added my notes below :)

# data[].attributes.body
General Electric tried to grow by entering different industries, including industrial manufacturing and financial services, through GE Capital. This strategy aimed to reduce risks and support other parts of the company. However, it didn't work out as planned.

GE Capital became a big problem during the 2008 financial crisis, and the company became too complex to manage well. Poor performance led to a loss of investor confidence and a sharp decline in market value. This mix made GE harder to manage and less stable.

I also agree with Jim Collins' idea that you only really see how good a leader is after they leave. Jack Welch was seen as a great CEO, but some of GE's long-term problems didn’t surface until later.

# data[].attributes.body
I think the idea that you only know how good a leader is after they leave is mostly true. Jack Welch was seen as a great CEO, but some of his decisions caused long-term problems for GE. Even he later said he gave himself an “A” for running the company but an “F” for choosing his successor.

GE is a good example of how a strategy can look good at first but cause problems later.

# data[].attributes.body
Katie Morton- Corporate Strategy Gone Wrong (with GE)

# data[].attributes.body
1. What kind of diversification is GE pursuing? What are the sources of value creation with this type of diversification?

1. On page 3 it is stated that the kind of diversification that General Electric is pushing is a diversified conglomerate. The sources of value of this type of diversification include discounted capital, high ratings, and high profitability with the GE capital that helped subsidize other units.

2. How did GE lose $507 billion (more than 85 percent) of its market valuation since its peak? What went wrong?

1.  9/11, 2008–2009 global financial crisis, the loss of AAA credit rating, when they overpaid for multiple big operations, and more.

3. After leaving GE, Jeffrey Immelt stated in 2018: "The notion of plugging financial services and industrial companies together, maybe it was a good idea at a point in time, but it is a uniquely bad idea now."To what is Immelt referring? Why does he think this is a bad idea? Do you agree? Why, or why not?

1. He is referring to the incorporation of GE capital and their industrial manufacturing units. Industrial companies typically have a long term cycle, while financial services tend to change rapidly in the ever changing market. Which became a weakness in this scenario. I agree that it is a bad idea because the rapidly changing market makes it very unpredictable and is a big financial risk.

4. In the bestseller Good to Great, Jim Collins advances the hypothesis that the greatness of a leader is known only after the leader has departed. The business press has celebrated Jack Welch as the greatest CEO of the last century. After reading this MiniCase, do you agree with Collins' strategic leadership hypothesis? Why, or why not? Note: When interviewed in 2018 about the GE situation, Jack Welch had this to say: "I give myself an A for the operation of GE, but an F for my choice of successor."

1. I disagree with Collins hypothesis. There are a lot of great leaders that are alive and well recognized for their leadership and successes while in their leadership roles.

# data[].attributes.body
Meagan Lewis

# data[].attributes.body
GE tried to do too much with unrelated businesses and relied heavily on its finance side to fuel growth. That worked for a while, but it backfired especially during the financial crisis. Bad acquisitions, too much debt, and lack of focus led to a huge loss in value. Overall, it shows that risky strategy and leadership decisions can catch up with a company later.

# data[].attributes.body
Omer Yasar-Corporate Strategy Gone Wrong

# data[].attributes.attachment_link.title
Corporate Strategy Gone Wrong Discussion

# data[].attributes.headline
Erica Dudley | Corporate Strategy Gone Wrong

# data[].attributes.subject
Erica Dudley | Corporate Strategy Gone Wrong

# data[].attributes.body
oops! not half a billion, half a trillion!!

# data[].attributes.headline
Week 14 - Corporate Strategy Gone Wrong - Adam Nowotny

# data[].attributes.subject
Week 14 - Corporate Strategy Gone Wrong - Adam Nowotny