General Electric launched its "Ecomagination" initiative in 2005 to position itself as a more environmentally friendly company and drive growth in clean technologies. As part of Ecomagination, GE committed to reducing its greenhouse gas emissions and water usage, doubling investments in clean technology research, and increasing revenue from green products. Ecomagination has been successful in meeting or exceeding these targets and generating over $70 billion in revenue from over 140 green products by 2011. While the campaign has helped GE's public image and business opportunities, some argue it moved too slowly in developing new green products.
General Electric launched its "Ecomagination" initiative in 2005 to position itself as a more environmentally friendly company and drive growth in clean technologies. As part of Ecomagination, GE committed to reducing its greenhouse gas emissions and water usage, doubling investments in clean technology research, and increasing revenue from green products. Ecomagination has been successful in meeting or exceeding these targets and generating over $70 billion in revenue from over 140 green products by 2011. While the campaign has helped GE's public image and business opportunities, some argue it moved too slowly in developing new green products.
General Electric launched its "Ecomagination" initiative in 2005 to position itself as a more environmentally friendly company and drive growth in clean technologies. As part of Ecomagination, GE committed to reducing its greenhouse gas emissions and water usage, doubling investments in clean technology research, and increasing revenue from green products. Ecomagination has been successful in meeting or exceeding these targets and generating over $70 billion in revenue from over 140 green products by 2011. While the campaign has helped GE's public image and business opportunities, some argue it moved too slowly in developing new green products.
General Electric launched its "Ecomagination" initiative in 2005 to position itself as a more environmentally friendly company and drive growth in clean technologies. As part of Ecomagination, GE committed to reducing its greenhouse gas emissions and water usage, doubling investments in clean technology research, and increasing revenue from green products. Ecomagination has been successful in meeting or exceeding these targets and generating over $70 billion in revenue from over 140 green products by 2011. While the campaign has helped GE's public image and business opportunities, some argue it moved too slowly in developing new green products.
challenges such as the need for cleaner, more efficient sources of energy, reduced emissions and abundant sources of clean water.”
- Jeffrey Immelt, Chairman and CEO of General
Electric Company
INTRODUCTION General Electric, or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States. The company operates through four segments: Energy, Technology Infrastructure, Capital Finance and Consumer & Industrial. In 2011, Fortune ranked GE the 6th largest firm in the U.S., as well as the 14th most profitable. Other rankings for 2011 include #7 company for leaders (Fortune), #5 best global brand (Interbrand), #82 green company (Newsweek), #13 most admired company (Fortune), and #19 most innovative company (Fast Company). Ecomagination is GE’s commitment to imagine and build innovative solutions to today’s environmental challenges while driving economic growth. In 2005 GE launched its “Ecomagination” initiative in an attempt to position itself as a “green” company. GE is currently one of the biggest players in the wind power industry, and it is also developing new environment friendly products such as hybrid locomotives, desalination and water reuse solutions, and photovoltaic cells. The company “plans to build the largest solar-panel- making factory in the U.S.,” and has set goals for its subsidiaries to lower their greenhouse gas emissions.
ABOUT THE CASE
General Electric a leading company in oil and gas, energy management, health care, transportation, lighting and appliances, aircraft engines, consumer electronics, solar panels, wind generators and locomotive engines announced a promotional campaign in 2005 which was known as Ecomagination Initiative by CEO Jeffrey Immelt. Ecomagination is an ambitious strategy designed to demonstrate that an ecologically conscious conglomerate can cultivate the bottom line while doing its duty towards the global environment.
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GE’s new initiative representing five basic commitments were:
1. To reduce greenhouse emission and improve the energy efficiency of operation 2. To double investment in the research and development of “clean” technologies 3. To increase revenue from those same technologies 4. To reduce its global water use by 20% 5. To keep the public informed
Before taking the initiative GE spent 18 months just working with industrial customers, inviting managers to a 2 day ‘dreaming session’ to imagine life in 2015. As a result with the help of Ecomagination Initiative and the five basic commitments they were able to meet the target or moreover outperform their targets. -They were able to reduce the GHG emission up to 32% -They geared up the double R&D investment in clean technologies including renewable energy, water purification processes, and fuel efficiency products from which it expects significant revenue growth. GE had already spent $10 billion on R&D investment in between 2010 and 2014 -They were able to reduce water usage by 25% in 2006 and 42% in 2014 - In 2005 they produce 17 products which are as per norms of the Ecomagination Initiative. In 2009 they produce 90 products In 2011 they produce 140 products and solutions generated 105 Billion worth in revenue. In 2014 revenue increased to 200 Billion. -They keep the public informed about its efforts to improve its own GHG emission using a website to communicate information social media as Twitter and Facebook -It not only helps the environment but also strengthens the company’s strategic position with major profit opportunity. -The overall campaign was successful, especially in the area of communication. Many businesses and government sectors talked about Ecomagination and adopted the idea. Since the government had a need for Ecomagination, it opened up a lot of doors for GE. However, it was noted that Ecomagination moved too slowing in its product development. There are not enough fulfillments of products to reflect its concept. GE is a company that focuses on quality and thus when products go through tests for reliability, the timeline is lengthened and does not walk a fast enough pace as the ideas develop. Ecomagination is developed from the corporate segment, and with this said, GE Corporate is looking for new ideas. They are inviting the world to take part and is investing a lot of venture capital to invest in these ideas.
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ANALYSIS Imagination is childlike and whimsical, even irrational at times. It finds its home in the minds of our children, creating wonderful worlds and quirky concoctions that quickly fade in favor of a new idea. Unfortunately, imagination’s lifespan is short-lived; a quick burst that fades at the onset of adulthood and is replaced by the mechanical realities of efficiency and productivity soon thereafter. But, there exists an anomaly. A large, seemingly faceless corporation that has taken a stance as a vanguard for environmental change. General Electric, a corporate behemoth offering a smorgasbord of services ranging from finance to healthcare, launched a campaign that is decidedly abnormal and desperately needed. General Electric’s campaign ecomagination is revolutionary insofar that it encompasses improvement along the profit margin as well as enhancing GE’s environmental responsibility to its customers and the world at large. In an internal presentation to GE officials Kate Brass, Energy ecomagination Leader, touted the campaign as “a commitment to our customers and to our environment.” Central to the campaign is developing new products every year that…
• Significantly Better than Installed Base • Lower Operating Costs
• Inheretly Green • Improve Value Proposition
• Meets Third Party Standard • Improve Competitive
It is important to examine the catalysts that drove ecomagination’s development before delving into the campaign itself. The United States provides telling examples about the incredible waste developed countries are producing. DoSomething.com reports some startling pollution statistics: • 1.2 trillion gallons of untreated sewage, storm water, and industrial waste are discharged into US waters annually. • 40% of America’s rivers and 46% of America’s lakes are too polluted for fishing, swimming or aquatic life • Each year there are about 250 million cases of water-based diseases, resulting in roughly 5 to 10 million deaths worldwide. Penn State Sociology Professor Vanitha Dayananda reports that the world’s population currently stands at 7.1 billion and demographers expect this figure to increase to nearly 9 billion by 2020. As space becomes increasingly scarce and competition for resources increases it is imperative that larger companies develop an increased sense of social responsibility.
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THE END RESULT
With an initial investment of $700 million in 2004, GE increased its investment in its Ecomagination program to $1.5 billion in 2010. In the years between, the initiative generated $70 billion in revenue for GE. In 2010 alone, the company garnered $18 billion from Ecomagination products while launching 22 new products, and has surpassed its $85 billion in sales since 2005. Recently, GE reported in 2011 that their Ecomagination program has introduced 34 new products with $21 billion in sales, and it continues to grow today. As Joel Makower wrote in 2005, “GE sees Ecomagination as an engine for creating new sources of business value for years to come. That’s likely to make it sustainable within the company, and not just the flavor of the month.” To continue its value as both a brand and a leader in clean technology, GE maintains constant content on their Ecomagination website. With articles, videos and images perpetually supporting GE’s commitment in sustainability, it continues to generate leads and sales for their Ecomagination portfolio.
RECOMMENDATION One of the biggest shortcomings of GE’s Ecomagination campaign is its inability to connect with the everyday consumer. We fully understand that GE’s primary concern lies in business-to- business transactions; however, we do believe that there is some merit in general consumer accessibility. From a purely anecdotal standpoint, we did not know a fair portion of the tactics that the campaign has implemented. Ecomagination would have benefitted from engaging the everyday consumer into its campaign operations. What we are recommending is not a large scale initiative, but rather some sort of mechanism in which the individual could connect and be a part of the Ecomagination initiative. One example is GE’s Ecomagination Make Your Campus Green tactic that failed to engender a large following. In retrospect, China’s operations team did a fantastic job in using a innovative solution to engage general consumers. By placing advertisements of Ecomagination in airport terminals, general consumers and business individuals are exposed to a small, yet effective campaign collateral. By simply looking at the Ecomagination challenge, it is apparent that everyday consumers are not capable of relating to such complex engineering designs. If there were some way to simply this challenge, where in community members could participate, GE may stand to gain a more significant following and portray itself more so as a community member, rather than a company. With this being said, Ecomagination was and continues to be a stalwart example of a large competition recognizing its long-term responsibilities to its industry, consumers and its community.
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BIBLIOGRAPHY
1. International Business –Sixteenth Edition By John Daniel, Lee Radebaugh, Daniel
