Sunday, July 19, 2015

Attacking the Inevitable, Saving the World and Making a Profit

The term “unstoppable trends” in the GE case study suggested to me an underlying opportunity to “save the world” and make a very respectable profit while doing so.   The GE case study suggested several unstoppable trends related to growth platform opportunities, including renewable energy, healthcare information systems, water technology and biosciences.  Each of these has significant and unmistakably precarious driving forces such as fossil fuel supplies, fresh water shortages across the globe, dramatically increasing healthcare costs and aging populations. (Although some less noble endeavors did also make GE’s list including film, DVD, Hispanic broadcasting, and consumer finance.)   Unlike the “unpredictable” black swan events, we know without doubt that the world is going to be changed by climate, fuel shortages, landfill capacity, water shortages and growing older populations.   We may not know the final outcomes of these changes but we know that we can alter impacts, such as establishing renewable energies to reduce the impact of fossil fuel shortages.  Companies, society and governments all have the ability to impact how these changes will alter our lives.   Companies however have an opportunity to substantially benefit from these unstoppable trends by providing solutions to individual and societal problems and reaping any associated government incentives.  Individuals, companies and government will likely invest heavily to protect slowly flooding cities if Hurricane Katrina alone resulted in $135 billion in damages (http://www.datacenterresearch.org/data-resources/katrina/facts-for-impact/) and Hurricane Sandy resulted in $50 billion in damages (http://www.huffingtonpost.com/2013/02/12/hurricane-sandy-second-costliest_n_2669686.html)

GE’s size, expertise and discipline place it in a unique position to make changes in how these unstoppable trends impact the world while still making a healthy profit.   There may be several opportunities to identify uncontested “blue ocean” market spaces among these many perceived threats.  Changes can be made at grassroots micro-economy levels in emerging countries such as sun ovens to reduce the need for wood burning and affordable water filters to purify water. However there are few companies with GE’s strategic advantages to effectively assist in large scale endeavors.   GE’s financial strength, global reach and government relationships all give GE a notable advantage to deliver solutions, make a profit and alter the world we live in for the better.  As a major energy consumer and another large global firm Google has funded over $2 billion in renewable energy (http://www.google.com/green/energy/) but in such a wide open market Google would still not compete against GE.  GE’s experience with selling infrastructure projects, large-scale equipment such as power turbines, and establishing effective business practices among diversified manufacturers give GE advantages in very different markets. 


Additionally, GE’s disciplined and cost effective business practices provide a more trustworthy reputation than many other organizations or government endeavors.  I would certainly rather see GE behind efforts such as expanded recycling capacities to reduce landfill, sea water desalinization plants, hydrogen fuel stations, power grid replacements or dikes to reduce the impact of sea level rise than the organizations responsible to Boston’s notorious Big Dig project. (http://www.bigdighighwayrobbery.com/

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