Driving forward a business start-up
A Marconi case study

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Page 2: Refocusing the company

Marconi 6 Image 1Marconi had a highly successful history in the consumer electronics market and eventually became part of GEC as a result of a take-over. GEC was one of the UK’s major success stories of the 20th century. By the 1990s it had become a major household name providing a diverse range of product lines varying from power stations, to heavy engineering and train building. The company was a profitable ‘star’ of UK business up until the 1990s.

However, from the 1990s onwards it became increasingly clear to business people with close links to developments in the United States that radical changes needed to be made in most UK businesses. These were brought on by the development of the Internet and other rapid changes in international telecommunications. The time was ripe for the ‘new economy’ to replace the ‘old economy’.

From the mid-1990s the revolution in communications technology led GEC to restructure its business. Half of this process was integration and branding. This involved a process of disposing of businesses which were no longer seen as the way forward, and the acquisition of major new businesses where new opportunities lay. For example, the company demerged its defence related businesses to British Aerospace and a range of other businesses involved in producing traditional industrial product lines. At the same time, the company focused on acquisitions in the "new economy" involving Information Technology and Communications and the Internet.

The broad thrust of the strategy was to enter high growth market/industry sectors by creating a more focused (slimmed down) set of businesses producing a range of integrated products concentrating on communications technology.

The purpose of the integration process was to be able to offer customers complete communications solutions. While following this strategy it was also essential to communicate to the world at large that the company had re-invented itself.  This could best be achieved through a rebranding process. In seeking a new brand name there was a choice of inventing a completely new one, or using a well known one that was already part of the company.

Marconi | Driving forward a business start-up
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