STRATEGIC IMPLEMENTATION

Energy Sector

General Electric

Group 2, Division H

H011 Arpan Daswal H015 Delvin Devakumar H017 Oindrila Dhar

H019 Yajur Gulati H026 Himani Kakkad H058 Apoorva Somani

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Declaration

We, the members of the Group Project, certify that the submitted written report is
the original work of our team and all the analysis and reporting text is entirely our
own. Facts, figures and other relevant information drawn from sources, where
required is duly acknowledged.

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INDEX

TITLE PAGE NO

1. Introduction & History 3

2. Industry Overview 9

3. GE’s Strategy 13

4. Competitor Analysis 15

5. Pain Points of the Industry 18

6. Prospects 22

7. Conclusion 26

8. References / Bibliography 35

9. Appendix 36

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1. INTRODUCTION & HISTORY

The history of General Electric Company is a significant part of the history of technology in the
United States. General Electric (GE) has evolved from Thomas Edison's home laboratory into one
of the largest companies in the world, following the evolution of electrical technology from the
simplest early applications into the high-tech wizardry of the early 21st century.

By the turn of the century General Electric was manufacturing everything involved in the
electrification of the United States: generators to produce electricity, transmission equipment to
carry power, industrial electric motors, electric light bulbs, and electric locomotives. It is important
to any understanding of the evolution of GE to realize that though it was diverse from the
beginning, all of its enterprises centered on the electrification program. It is also worth noting that
it operated in the virtual absence of competition.

The company has also evolved into a conglomerate, with an increasing shift from technology to
services, and with 11 main operating units: GE Advanced Materials, a specialist in high-
performance engineered thermoplastics, silicon-based products, and fused quartz and ceramics
used in a wide variety of industries; GE Consumer & Industrial, which is one of the world's leading
appliance manufacturers, stands as a preeminent global maker of lighting products for consumer,
commercial, and industrial customers, and also provides integrated industrial equipment, systems,
and services; GE Energy, one of the largest technology suppliers to the energy industry; GE
Equipment Services, which offers leases, loans, and other services to medium and large businesses
around the world to help them manage their business equipment; GE Healthcare, a world leader in
medical diagnostic and interventional imaging technology and services; GE Infrastructure, which
is involved in high-technology protective and productivity solutions in such areas as water
purification, facility safety, plant automation, and automatic environmental controls; GE
Transportation, the largest producer of small and large jet engines for commercial and military
aircraft in the world, as well as the number one maker of diesel freight locomotives in North

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America; NBC Universal (80 percent owned by GE), a global media and entertainment giant with
a wide range of assets, including the NBC and Telemundo television networks, several cable
channels, and the Universal Pictures film studio; GE Commercial Finance, which provides
businesses, particularly in the mid-market segment, with an array of financial services and
products, including loans, operating leases, and financing programs; GE Consumer Finance, a
leading financial services provider, serving consumers, retailers, and auto dealer in about three
dozen countries; and GE Insurance, which is involved in such areas as life insurance, asset
management, mortgage insurance, and reinsurance.

The staggering size of General Electric, which ranked fifth in the Fortune 500 in 2003, becomes
even more evident through the revelation that each of the company's 11 operating units, if listed
separately, would qualify as a Fortune 500 company. GE operates in more than 100 countries
worldwide and generates approximately 45 percent of its revenues outside the United States. Over
the course of its 110-plus years of innovation, General Electric has amassed more than 67,500
patents, and the firm's scientists have been awarded two Nobel Prizes and numerous other honours.

GE's economic problems were mirrored by its managerial reshuffling. When John F. (Jack) Welch,
Jr., became chairman and CEO in 1981, General Electric entered a period of radical change. Over
the next several years, GE bought 338 businesses and product lines for $11.1 billion and sold 232
for $5.9 billion. But Welch's first order of business was to return much of the control of the
company to the periphery. Although he decentralized management, he retained predecessor
Reginald Jones's system of classifying divisions according to their performance. His goal was to
make GE number one or two in every field of operation.

In late 1999 Welch announced that he planned to retire in April 2001, but he did not name a
successor. At the time, General Electric was one of the world's fastest growing and most profitable
companies, and boasted a market capitalization of $505 billion, second only to Microsoft
Corporation. By the time Mr. Welch stepped down, he had turned a $25 billion manufacturing
company into a $100 billion “boundary-less” conglomerate.
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In November 2000 Jeffrey R. Immelt won the succession battle and was named president and
chairman elect. Immelt, who joined GE in 1982, had most recently served as president and CEO
of GE Medical Systems, a unit with revenues of $12 billion. Immelt began to place his imprint in
earnest on GE in 2002 through major restructurings and several significant acquisitions.

GE Renewable Energy

GE announced that it intends to intensify its focus on the growing renewable energy market by
consolidating all of the company’s renewable and grid assets into a single, simplified Renewable
Energy business. Global demand for renewable power generation and the associated grid
integration continues to increase globally. In fact, the latest report from the International Energy
Agency showed that renewable capacity additions of 178 GW accounted for more than two-thirds
of global net electricity capacity growth in 2017. “This strategic realignment positions GE to lead
in the fast-growing renewable energy market,” said GE Chairman and CEO H. Lawrence Culp, Jr.
“This move will help our Renewable Energy teams to better support their customers in leading the
energy transition by simplifying the way they can access innovative products, integrated solutions,
and services that reflect the evolution of the clean energy marketplace.”

The proposed moves announced today are part of a broader effort on the part of GE to position the
company to meet the evolving needs of the power market, including the growth of renewable
energy.

These moves include -

Moving GE’s grid solutions and hybrid renewables (including solar and storage systems)
technologies into the GE Renewable Energy Business, complementing its existing onshore wind,
offshore wind, LM Windpower, and hydro offerings. Complementing all offerings with digitally
enabled services, streamlining its Onshore Wind structure, eliminating its headquarters layer and

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elevating its current regional teams Americas, Europe/Africa, MENAT and APAC — to improve
competitiveness, speed, customer focus, and local execution in the Onshore Wind business.

These moves will enable GE Renewable Energy to drive more local and integrated solutions,
simplify its structure, and improve performance, according to the company. The business will be
capable of supporting customers from project development, to equipment and services, to full
turnkey solutions. It will have the most diverse and broadest renewable portfolios in the industry,
enabling customers to bring green electrons to the grid or to power their operations.

“With the unique diversity and scale of this portfolio and the combination of expertise, technology,
and local reach, we will create enhanced value for all our customers seeking to power the world
with affordable, reliable green electrons,” said GE Renewable Energy CEO Jerome Pecresse. “Our
team is excited by the possibilities this new structure creates to help us lead the energy transition
for GE.”

The expanded Renewable Energy is part of GE’s energy related portfolio, which also includes the
newly created Gas Power business and GE’s Power portfolio which operates Steam, Nuclear, and
Power Conversion.

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2. INDUSTRY OVERVIEW

According to the report from Frost & Sullivan, Global renewable power generation capacity in
2018 was expected to grow by 13.3% in 2018 led by Solar PV and Wind Power (Actual figures of
2017 and forecasted for 2018).

Renewable Source 2017 (Capacity in Expected Growth 2018 Forecast (Capacity

MW) in MW)
Wind 539,123 9.8% 591,900
Solar 408,819 21.9% 498,337
Biomass 120,146 6.5% 127,918
Small Hydro 81,735 4.5% 85,406
Geothermal 14,350 5.8% 15,182
Ocean 550 5.8% 581

By the end of 2018, Asia is forecast to be the leading region for all renewable power generation
technologies.

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In short run, the renewable energy market will be driven mostly by new installations of solar and
wind energy, which together will represent 87.6% of all capacity installed by 2025.

2017 Capacity 2025 Capacity

0%
7%1% 10%
5% %
7%
10%
47% 40%

35% 47%

Wind Solar PV Biomass Wind Solar PV Biomass

SHP Geothermal Ocean SHP Geothermal Ocean

Major trends in Renewable energy market across the world –

1. Rise in Solar Market - In 2017, new capacity additions in solar PV were higher than additions
in new fossil fuels and nuclear power plants combined, and almost double of wind’s. In 2018, solar
PV is forecast to maintain its leadership.

Region Annual Capacity Addition Annual Capacity Addition

(GW) 2017 (GW) 2018
Asia 73.9 57.76
North America 12.05 10.81
Latin America 4.06 5.64
Europe 8.14 10.77
Africa and Middle East 3.62 4.55

By the end of 2018, Asia is forecast to be the leading region for all renewable power generation
technologies.

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Note - China was the major driver of global growth in 2017, and although the country will slow
down in 2018, greater support in the form of FiTs, renewable auctions, and DG programs will
guarantee continued growth

2. The China Effect - In the last few years, China has established itself as the global leader in
renewable power generation with ever-increasing capacity additions that reached 650 GW in 2017
at an annual growth rate of 14%. The Chinese market is particularly important to the global solar
industry. In 2017, China represented more than double of global demand, with 52 GW of new
solar PV capacity.

With multiple changes being announced from the Chinese government on the modifications of
solar policy, this will considerably dampen the growth of total solar market. In 2018, the market’s
annual revenues will fall by almost 7% over 2017

3. New Players in the Market - A growing number of players from other industries, such as oil
& gas, mobility, and ICT, keep flocking to the renewable power generation market to make the
most of the industry transformation

Wind Power

According to the reports, wind services market is likely to increase at a CAGR of 12% until 2025.
This is primarily due to the aging installed base of wind power and the end of warranty terms. This
will lead to OEM collaborations for additional services to improve the efficiency of wind turbines.
M&A activity is expected to continue in 2018

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3. GE’s STRATEGY

The company has succeeded towards creation of major degree of core competence both in terms
of external measures such as market consolidation, ability to penetrate newer markets rapidly
through usage of knowledge gained in course of operating in other markets. It has been stated that
underpinnings pertaining to prevailing market conditions tends to facilitate intense rivalry between
firms, and those firms that succeeds towards creating synergies among its different sets of
operations tends to benefit majorly. The presence of GE in various high growth industries
enhanced the company’s ability at transferring the degree of risk from one industry domain onto
another. Moreover, the fact that higher degree of market presence results towards enhancement of
market exposure by the firms thereby assisting towards collection of material information on lesser
time frame than its competitors. Operations in over 170 countries worldwide has facilitated
towards gaining higher quantum of market exposure enabling the company in policymaking and
strategizing taking into changing market dynamics. The fact that in order to improve revenue
generation capability and streamlining introduction of newer sets of products, upkeep of relevant
advancement in technology and strategy is prerequisite. Moreover, reliance on emerging global
trends in order to undertake future expansionary measures facilitates towards creation of entry
barriers by the company once it is able to capital upon such trends.

In terms of internal competencies the company employs the best talents around the globe for its
operations and has succeed in bringing in high level of diversity in workplace through recruitment
of accountants, auditors, engineers, physicists amongst others.

The company, after a tumultuous financial period leading to downgrading of its securities and
large financial losses with regards to GE Capital, the primary source of revenue generation by GE,
has focused upon gaining market share through offering innovative products. Moreover, the
company has increased expenditure pertaining to research and development and aims towards

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introducing newer sets of services and products that stretches its product line and results in catering
to larger segment of the markets.

Balance scorecard enables organizations, both profitable and non-profitable ones, in evaluating
the degree of deviations of the company’s financial and operating performance from its strategic
objectives.

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Today, GE is investing in the power of the industrial internet, utilizing big data & analytics at both
the farm and fleet level to optimize existing assets better than ever before. More energy production
and greater reliability means more revenue from the windfarms.

GE expanded GE Renewable Energy in the last week of January by consolidating its renewable
energy business and grid assets. The aim of this reorganization was to streamline the company’s
operations and spinning off from other businesses. They aim to provide an end to end solution to
its renewable energy customers which would include project development, turnkey solutions and
equipment and services.

GE is targeting to deliver solutions that increase revenue, reduce cost and lower risk by combining
physical product expertise with an end-to-end renewable energy analytics-based platform, which
runs on GE’s in-house developed Predix Platform.

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4. COMPETITOR ANALYSIS

The industry

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5. PAIN POINTS OF THE INDUSTRY

Technological shift

1- Digitalization of agrochemical industry: Due to an increase of demand of raw materials

 The agrochemical

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6. PROSPECTS

The renewable energy market for wind power was $148.0 billion in 2017 and is expected to reach
$251.8 billion by 2025, registering a CAGR of 6.7% from 2018 to 2025. The U.S. renewable
energy market for wind power was $12.8 billion in 2017 and is estimated to reach $21.8 billion by
2025, at a CAGR of 6.8% during the forecast period. The India renewable energy market for wind
power is estimated to reach $7.3 billion by 2025 at a CAGR of 7.6%.

COMPARATIVE SHARE ANALYSIS OF RENEWABLE ENERGY MARKET FOR

WIND POWER, BY COUNTRY, 2017 & 2025 (%)

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India Scenario

Share of Wind power as percentage of total electricity generation as increased on year on year
basis. But with hydro energy projects in place, wind share as percentage of total non hydropower
renewable generation has decreased.

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ASIA-PACIFIC Scenario

Future of Wind Energy Sector

In 2018, the cumulative installed wind capacity reached 591 GW. However, new wind capacity
addition totaled to 51.3 GW in 2018, which was down by 4.11% from 2017. The primary benefit

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of wind over solar power is that wind turbines are not dependent on sunlight, thus, wind turbines
can generate power 24 hours a day, whereas solar panels only generate power during sunlight
hours. However, wind comes with a significant caveat. Thus, to be effective, wind turbines need
to be situated high above any obstacles that can block the wind.

For the residential purpose, a typical wind turbine is ~80 feet tall, and it should be located in a
strong wind condition to produce power efficiently, and the wind speed of at least 12 miles per
hour is in general considered to be efficient. Whereas, wind turbines also have moving parts, which
can result in more wear-and-tear and higher maintenance requirements However, wind energy is
a highly potential segment as shown in the figure below -

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7. CONCLUSION

Year 1 (2019):

 Create strategy

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8. REFERENCES / BIBLIOGRAPHY

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