Sustainability and Business PGP 16-18

My Case Analysis Notes

1. My name: Abhijit Das (2016PGP063)

2. The case: GEs Ecomagination Challenge: An Experiment in Open Innovation

3. Who is your client? General Electric

4. What is the critical challenge the client faced?

GE started the Ecomagination Challenge which saw the best of ideas in the
sustainable energy sector. The company had already spent around $100 million for
the challenge where they received the best of the ideas on how to improve our
energy future. But most of the ideas were extremely small compared to GEs
business size, quite early for its time and it would atleast take around 18 months in
order to engage with GEs businesses.

Also some of the GEs staff was worried that the internal information of GEs
businesses could be leaked to the external VCs. Also some VCs wanted to invest in
ideas that will directly compete with GE.

Some managers of GE felt that the $100 million to be spent on the

ecomagination Challenge can be spent for internal research.

5. Who are the main stakeholders involved here and what are their concerns and
interests?

The biggest stakeholder is GE which has invested not only money of around
$100 million but has also invested time and resources and managers from different
verticals to identify and select the promising ideas. They went out of their
conventional method and went on to open up to the world in search of new and
innovative ideas. This exposed them to the risk of losing precious internal
information of the company.

The VCs who were part of the challenge were worried that GE may lock in
companies that receive its investment in ways that hardwire their exit options to
GE. Also they needed to have absolute discretion in investing for a company and
they shouldnt be forced neither be pulled away from investing in a company of
their choice.

The participants who have submitted their ideas to the ecomagination

challenge had to be aligned with the business model of GE such that GE could help
them via fund, network and experience and also scale up the business to a global
level.
6. What is the root issue the client must resolve in order to deal with this critical
challenge?

Internally, all the managers and people from GE should be on the same page
of investing in the ideas received from the challenge.

The ideas that were received and identified for mentorships and investments
by GE for its implementation should be aligned with the business model of GE and
its operational areas. The ideas have to be within the natural markets of the firm.
These ideas should be implemented swiftly and scaled up to the global level as
scaling is essential in the energy business and GE is very good scaling business to a
multi-billion dollar business.

7. What plausible, mutually exclusive, strategic options should the client consider
for resolving this root issue?

If the below mentioned two strategies are implemented properly and

becomes quite successful than the first issue that is pointed out in the previous
question will be solved.

1. As the company has already invested $100 million and got a lot of innovative
ideas, the company should move forward with the ideas in those areas that will
diversify the scope of GEs business and venture into other sectors and domains
where the company has the potential to grow and sustain.

2. The company should look at the new ideas received via the world wide challenge
as it will give the company a new direction and perspective. Investments should be
in those ideas that has the potential to scale up to a million dollar business.

8. Which of these options do you recommend, and why?

Both the options are well to follow as it will solve the internal problems that
has generated with the allocation of resources to ecomagination challenge. All the
managers and employees of GE should be on a common page and understand that
it will be beneficial for the company to look at new and fresh ideas. As the revenues
of the company has been falling in last few years, it is necessary for the company to
look at new ideas that can be implemented and come out with product and services
that could increase the revenue of the company. Though the company has to help in
developing the ideas right from scratch but it will be fruitful for the company if they
invest in ideas looking into the future scope of the ideas. It should invest in those
ideas that has the potential to revolutionise the energy sector.
9. What implementation issues should your client anticipate and how should they
address them?

Internally the company may face certain issues and the ways to face them are
below:

1. GE should make its managers and employees understand the benefits of

engaging in fresh ideas such that they have multiple perspective.
2. Should allocate appropriate resources for the implementation of ideas.
Mentors should be provided who have quality experience in the domain of
interest. Team should be made up to mentor and consult the development
and implementation of those ideas
3. The shareholders and the market might react differently and not as expected.
The company should quickly identify those agents and take steps accordingly
such that the stakeholders are kept in confidence and the market also react
smoothly.

Externally

1. The company should also understand that the market may change. They
should be able to anticipate the changes and make their plans accordingly

2. Provide funding to those ideas that are too early to implement at the present
time but have a good scope in the future.

10. Any other comments