Business Unusual
idea-symbol-illustrationjpg

How the symbol for a good idea has outlived the product that inspired it

General Electric was co-foundered when Thomas Edison launched a single company incorporating his various companies at the time. The portfolio covered power generation and transport, but was publicly known for the first commercially successful electric light bulb.

To last over a century and remain at the forefront of innovation is almost unique to GE and the current plans to continue a decade long restructure that may see the company sell its consumer lighting division not in desperation but on purpose is part of what has allowed it to survive when other have faltered.

It may seem surprising, but it fits with a long cycle of how GE has identified and responded to changes in the markets and it suggests that they have not only learnt from their history but could be cleverly looking to repeat it.

Create demand then service it

When electric power stations were first created, there was a huge potential market, but people who have lived without electricity had no real need for it. It would be similar to your view of a mobile phone before they were released.

The power industry realised that residential power demand would increase if they could demonstrate a better lighting option than gas and candles which saw the race to create a bright, clean and cheap light bulb, it was Edison’s company that both found a useful version but also managed to publicise the bright invention which was to create the link between innovation, light bulbs and bright ideas.

Businesses and residential customers were eager to get the new technology with the growing supply further increasing demand.

It was the silent cartoon Felix the Cat in the 1920’s that would use the light bulb as a symbol to show he had just had a great idea which thanks to press photos of Edison and the glowing bulb near his head making the connection between great ideas and lightbulbs.

After the light bulb got electricity into homes, GE could look to supply new appliances that would work with the wonder energy source.

They had also invested in the transport industry building locomotives and engines including what was at the time the largest locomotive built and thanks to a more recent one, still is.

The Great Depression might has signalled the end of a consumer business relying on the sale of what was still a luxury appliance, but they opted to offer their products on finance.

In the following decades these industries and their business to finance them grew to be its biggest revenue source, after 2008 they have scaled that back. Currently it is their transport business that delivers the lion share of their revenue building diesel-electric trains and using the same electric motors in the mining and marine sectors.

The potential decision to sell the consumer lighting division comes after it had recently sold off it consumer appliance business.

The strategy is to target business focused products as the revenue for the supply and service of those contracts are more substantial and longer lasting than the rapidly changing and highly competitive consumer sector.

GE developed LED lighting in the 60’s, and as it remains the strongest potential source of lighting in the future, they will retain their LED lighting division even if they do sell the other lighting operations.

After building engines for transport they also invested and have built a aircraft engines. It was a good move as global aviation has not only seen strong business over the years, but much of the technology has also helped it secure contracts with the US military.

Other investments in the energy sector included oil and gas and even nuclear although it was GE that designed the Japanese nuclear reactors that failed following the devastating tsunami in 2011.

They have a long and significant connection to media with RCA being created by GE to create the first radio broadcasters and were also instrumental in the first TV broadcasts, supplying the industry equipment and the consumer sets used to consume it. In the 80’s they bought the broadcaster NBC and retained them until 2013.

The Dow Jones listing of the biggest 30 listed companies included General Electric when it was created in 1896 and except for a few years in the early 1900’s it has been a part of the index for the entire time, the only one of the original 12 that were included in 1896.

It has interests it the medical field too where it innovated the MRI scanner and the company boasts two Nobel prize winners.

That is not to say it has not had its fair share of errors and scandal. The company manages to pay very little if any tax despite making most of its profits in the US and while not alone it actively would seek to get consumers to replace their GE products sooner than necessary.

These activities while not the markings of a good corporate citizen are not unique and may even have been acceptable at the time.

This piece though can’t cover the full extent of the business, but looking at what is unusual about it has been their focus on the future, the strategy to favour the business sector ahead of the consumer sector while understanding the potential synergy between the two. And perhaps most importantly not using its historic connection to an industry to prevent it expanding into or focusing on a new one.

Read More
Great ideas, wrong time

Great ideas, wrong time

The iPhone, Ebay and Facebook, we all know these killer applications but what about their very similar predecessors that flopped.

The world of business is changing, here is what you need to know.

The world of business is changing, here is what you need to know.

Companies, institutions and principles, nothing is safe from the impact of the 4th industrial revolution.

What 30 years of data tells us about the past and future of the super wealthy

What 30 years of data tells us about the past and future of the super wealthy

Changes to the Forbes Rich List is like a financial history of the world, reflecting economic booms and busts.

Everything you need to know about the dark web, but were too afraid to ask

Everything you need to know about the dark web, but were too afraid to ask

The recent closure of two illegal online marketplaces selling contraband has put the dark web back in the spotlight.

The Alibaba Group does not see itself as a company but an economy

The Alibaba Group does not see itself as a company but an economy

Alibaba founder Jack Ma says the future is his biggest competitor and he wants young entrepreneurs to help him succeed.

If a minimum wage is a good idea, what about a maximum?

If a minimum wage is a good idea, what about a maximum?

Salary caps are not new, but wage gaps have never been this big, perhaps this is how could we address it.

Popular articles
Struggles interracial couples still face

Struggles interracial couples still face

The Open Line took an unexpected turn when a caller in an interracial relationship shared how her father rejected her partner.

10 sexting tips on how to keep things spicy (and safe)

10 sexting tips on how to keep things spicy (and safe)

Interested in sexting but worried about the risks? Dr Eve has created a guideline to help you 'sext' in a fun and responsible way.

It's not the end of the road... Top tips to improve your matric

It's not the end of the road... Top tips to improve your matric

"Recognise that it’s not the end, it’s the beginning." Expert advise for school-leavers who want to improve their results.

Gospel singer Sipho Makhabane explains how Sfiso Ncwane died

Gospel singer Sipho Makhabane explains how Sfiso Ncwane died

Makhabane says Ncwane was feeling weak yesterday and his wife phoned paramedics to check on him.

Who is Advocate Tembeka Ngcukaitobi?

Who is Advocate Tembeka Ngcukaitobi?

The EFF lawyer stole the show during the state capture report court battle.

Meet the founder of Capitec Bank, named ‘Best Bank on Earth and Cheapest in SA’

Meet the founder of Capitec Bank, named ‘Best Bank on Earth and Cheapest in SA’

Michiel le Roux speaks about the fascinating story behind the little bank that has the Big 4 shaking in their boots.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...

Blesserfinder: Matching you with a sugar daddy near you

Blesserfinder: Matching you with a sugar daddy near you

Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?