BCG matrix is developed on the basis of product life cycles and gives an idea of what areas should the business of prioritizing between the product portfolio (Hambrikc et al., 1982, p. 452). For companies have a long-term growth must have strategies to target the business units that have a high need for growth because of the cash inflow (Anoldo and Nicholas 1983, p. 50). In other words, the BCG matrix ensures that the company gives priority to areas that are likely to generate more. To map the GE business in a BCG matrix, it is first important to understand the different business areas in detail and their percentage of the revenue collection for the company.
General Electric is best described as a large conglomerate which consists of five different divisions or business units specialized in different business areas. A business unit can be described as a division, product line, or a profit center that operates within the parent company. Different business units within a parent company are given authority to operate independently but with a degree of control of the parent company. Its viability depends on the cost of the tax revenue of the company. The following are the major business units of GE and its contribution to company revenue.
GE Technology Infrastructure
This business unit contributes about 6% of total company revenues. Is mainly engaged in developing technologies specifically for the transportation infrastructure. It consists of GE Aviation to produce jet engines, military and commercial aircraft, transport of produce GE locomotives, and water from GE, which manufactures pumps, filters and other water equipment.
ii. GE Energy Infrastructure
This unit contributes to 2% of total company revenues. Dedicated to the manufacture of equipment for energy companies. It consists of GE Energy, which markets energy technologies such as gas turbines, generators, among others. GE Oil & Gas in the supply of drilling equipment on the other systems, compressors, and others.
iiii. NBC Universal
This business unit contributes 5% of total revenues. It is one of the four major U.S. broadcast networks. With 80% of the shares, GE has an influence on the management of the company that has obtained exclusive rights to broadcast major events like the Olympics, the NFL and others.
iv. GE Capital Financial
Capital Finance is the most important unit in the company in terms of funding. Brings more than 26% of total revenue, although it has been badly hit by the current financial crisis.
c. GE Consumer & Industrial
This business segment contributes about 21% of total business income. It mainly produces household appliances, industrial equipment and others.
According to the 2009 financial report, the following were the contribution of income for the different segments of society.
GE marketing of a BCG matrix generated four main categories. These include:
The units that fall under the stars are those with high growth rate and a dominant market share (Arnold and Nicholas 1983, p. 47). These units require additional resources for growth.
At GE, a unit of this category is the equity financing. GE Capital Finance contributed 26% of the profits of the company in accordance with the financial report 2009. This unit has a dominant market share in the financial market and requires additional resources to function effectively.
Technology infrastructure unit also falls into this category. Quarterly report shows that the energy infrastructure has been a 13% growth in earnings is considerably low compared with previous results, but the segment has a commanding market share of 21% after Phillips and Siemens
ii. Cash Cows
Business units in this category have low growth, but a dominant market share (Arnold and Nicholas 1983, p. 48). Generated surplus resources are allocated to other business units. In GE Technology Infrastructure unit has low growth, but generate more revenue. This business unit has a 50% market share and generates over 26% of revenues (NYU Stern 2002, p. 6).
The business units included in this category have a low / declining market and a market share of subject (Arnold and Nicholas 1983, p. 49). GE business units within this sector are the consumer and industrial units. Consumer and industrial unit has been one of the key pillars of the company, but recently there has been poor performance with a declining market share.
iv. Question Marks
Business units in this category operate in a high growth market but have a low market share (Arnold and Nicholas 1983, p. 57). The unit may be the place for this category is NBC Universal, which despite operating in a high growth market, has a low market share. NBC Universal has been a drag on GE’s financial portfolio is not with the quarterly financial report shows a 41% decline in profits.