The paper " Key Economic Elements of General Motors' Perfomance" is a wonderful example of a case study on macro and microeconomics. For over one hundred years, General Motors has been one of the leading lights of American business. In the last few decades, the company has ventured more aggressively into overseas markets. This paper focuses on key economic elements that influence the performance of a company. While it is recognized that economic factors can be critical, the decisions that a company makes, in terms of pricing strategy, which markets to operate in, and what kind of products to make, are all important.
GE’ s success has been in part to the company’ s heavy investment in research and technology along with the close connection between research and market needs. Introduction General Electric Company (GE) became storied for its success under Jack Welch. The company, founded in 1879, is a diversified company dealing in products ranging from appliances. During Welch’ s “ tenure at GE, Welch produced more money for shareholders than anyone else except Bill Gates at Microsoft (Byrne, 1998). The market capitalization of GE shares went from 12 thousand million dollars in 1981 to 500 thousand million dollars by 2000 (Multinational Monitor, 2001; cited in Franke et al.
2007). Today, while specialization is prized by some companies, GE takes pride in the range of business areas in which it excelled for so long. As the company notes on its website, “ GE is a global infrastructure, finance, and media company taking on the world’ s toughest challenges. From everyday light bulbs to fuel cell technology, to cleaner, more efficient jet engines, GE has continually shaped our world with groundbreaking innovations for over 130 years” (GE www. ge. com).
Though the company’ s reputation has been based in large part on the innovation that has come to characterize its products whether, in the field of wind turbines or brain scanners, the company also made great inroads into the financial sector.
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