Chapter 20, Growing Services Summary and Analysis

Growing services is all about people. Most of GE's businesses are considered after-market services. Medical systems is the first business to introduce long-term service contracts. Redefining markets more broadly in 1995 creates a turning point for services. The aircraft engine industry is the first to be reorganized. GE acquires a large shop in Wales from British Airways and a shop in Brazil, which reduces the cost of servicing GE engines. Greenwich is acquired soon after they acquire a large engine overhaul service. GE engineers are moved from designing to upgrading. Service revenues go from under 40 percent in 1994 to over 60 percent in 2000.

Acquisition plays an important role in service growth. Acquiring technology and information systems and incorporating them at every step of the operating system, triples initial investments. Investing in technology for service changes GE's service business fundamentals. Long-term...