Is GE Following IBM's Playbook?


The Motley Fool's industrial analyst, Isaac Pino recently, attended The Atlantic magazine's Manufacturing Summit for insight into the industry and visited General Electric's 30 Rockefeller offices for a closer look at the $250 billion conglomerate. Isaac and Motley Fool Money host Chris Hill weigh in on the company's transformation over the past few years, its game-changing investments in 3-D printing and the industrial Internet, and the opportunity ahead for GE shareholders.

In the following segment, Isaac takes a closer look at how GE aims to diversify its businesses and grow margins while remaining focused on infrastructure, energy, and transportation. What's the secret? Taking a page from IBM's book, GE recently invested heavily in building a software hub in San Ramon, Calif. Where IBM saw an opportunity in working clients to use computers, data, and servers more effectively, GE sees a similar opportunity in the industrial market. GE hired more than 400 engineers and invested $1 billion in this Silicon Valley tech center, with an aim to develop digital tools to analyze millions of gigabytes of data generated by machines. Few companies can compete with GE when it comes to large-scale industrial operations, and now the company can differentiate itself by making these businesses smarter. The move paid off for IBM, whose profit margins have tripled since 2002. Will GE's bet pay off like Big Blue's?

For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE, and you'll receive continuing updates as major events unfold during the year. To get started, click here now.

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Chris Hill has no position in any stocks mentioned. Isaac Pino, CPA owns shares of General Electric. The Motley Fool owns shares of General Electric and IBM. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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