General Electric (B): Sustainable Competitive Advantage?

By November 2016, Trian Partners had built up a sizable stake in General Electric Company shares and became the company’s eighth-largest shareholder. General Electric Company’s total shareholder return had outperformed the market by 9 per cent since June 2015, when Trian Partners initially invested in the company. However, it was important to consider whether the factors that had led to this performance could be sustained, and a comparison of General Electric Company’s performance over the last 10 years under the current chief executive officer with that under his predecessor could offer some useful perspective. General Electric Company’s share price had reached its all-time high under Jack Welch, solidifying his reputation as the “Manager of the Century.” However, there were several important questions to consider: What factors contributed to the success of General Electric Company historically? How might those same factors influence the company’s future prospects? And how might an analysis of these factors shape an agenda with the board?

• Strategy, Welch, Immelt, Conglomerate