GE has been leading a significant standing in the industry for various years because of two broad reasons: (1) the company succeeded in pursuing the strategies of related diversification rather than unrelated diversification, and (2) the increasing trend of outsourcing, shareholder value maximization, and focus made organizations, which are conglomerates, inapplicable in this era.
However, numerous firms that were diversified formerly, have become narrower and more focused with their corporate strategies. GE conducted a complex set of businesses because of continuous buying and selling of businesses.
The case composed of the fundamental reasons behind this complex diversification of GE and its corporate strategy. Pros and cons of unrelated diversification can be linked to the strategies pursued by GE.
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