Case study. GE's Olympic Sponsorship

Imagination at Work and Play: A Case Study Analysis of

General Electric’s Olympic Sponsorship

Timothy J. Crader, D.B.A.

Visiting Assistant Professor, Department of Management

John F. Welch College of Business

Sacred Heart University

Fairfield, CT 06825 USA

Email: [email protected]

James Santomier (corresponding author)

Professor, Department of Marketing and Sport Management



Fairfield, CT 06825 USA

[email protected]

First Author

Timothy J. Crader, D.B.A.

Visiting Assistant Professor of Management



Timothy Crader, D.B.A., is an experienced Sales and Marketing Executive having had a wide

range of responsibilities over many years. He currently serves as a Business Development

Leader for GE Energy and has held Sales leadership roles with firms such as HP, Northeast

Utilities and Con Edison Solutions.

In addition to his role at GE, Tim serves as a Visiting Assistant Professor of Management for

the MBA Program of the John F. Welch College of Business at Sacred Heart University in

Fairfield Ct. and teaches courses in Marketing Research, Product Management, Statistics and

Marketing Management.

Dr. Crader holds an MBA from Sacred Heart University and a BGS from the University of

Connecticut. He received his Doctorate in Business Administration from the School of

Advanced Studies of the University of Phoenix, AZ., where he conducted research in the area

of Transformational Core Selling Teams and their impact on Customer Satisfaction.

Second Author

James Santomier

Professor, Department of Marketing and Sport Management



Fairfield, CT USA

James Santomier is currently a Professor in the Department of Marketing and Sport Management

in the John F. Welch College of Business at Sacred Heart University, Fairfield, Connecticut, USA.

He is also a Visiting Professor at the University of Bayreuth, Germany. He received a B.A. and

M.A. in Physical Education from Montclair State University, and a Ph.D. in Physical Education

from the University of Utah.

Areas of study included sport management and the psychosocial aspects of sport. Dr. Santomier

has published extensively in the areas of sport management, sociology of sport, and the

psychosocial aspects of sport. He has presented at numerous international and national

conferences.

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Abstract

Title - Imagination at Work and Play: A Case Study Analysis of General Electric’s Olympic

Sponsorship

Authors -

Purpose –This paper examines the management of General Electric’s Olympic sponsorship and

provides insights related to the organizational and transformational leadership dynamics involved

in the development, implementation and activation of the sponsorship, as well as the results of

pull-through marketing efforts and the sponsorship’s impact on GE’s global business practices,

brand equity, and revenue.

Design/methodology/approach – The case study method was used due to the complexity and

specificity of the topic, and the fact that only a discrete element of the sport sponsorship sector

and a limited number of events and their relationships were addressed.

Findings - The primary objective of GE’s TOP sponsorship was to enter the Chinese market and

build brand equity across Asia. Using GE’s proprietary WorkOut and Change Acceleration

models, transformational leaders facilitated the development and implementation of a new

integrated organizational structure that enabled GE to maximize branding opportunities in Asia,

product/service pull-through marketing opportunities, and ROO.

Practical Implications - This paper demonstrates how GE effectively modified the structure of

its global sales unit, generated revenue, and increased brand recognition in emerging markets

across Asia. GE’s management of its TOP sponsorship represents an innovative model for CFOs,

CMOs, brand managers, and sport marketers considering a long-term sponsorship investment.

Article type - Practitioner Paper

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Keywords - sponsorship, The Olympic Partners (TOP), General Electric/NBC Universal,

transformational leadership, branding, WorkOut

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Case Summary

General Electric (GE) is a diversified U.S.-based global infrastructure, energy, transportation,

finance and media company, the parent of NBC Universal/NBC Sports, and a member of The

Olympic Partner (TOP) programme. In 2003, NBC Universal/ NBC Sports paid a 33 percent

premium (over what it paid for the broadcast rights for the 2006 and 2008 Games) for the

broadcast rights for the 2010 and 2012 Olympic Games. In addition, General Electric paid

approximately U.S.$180 million to join The Olympic Partner (TOP) programme beginning with

the 2006 Torino Winter Games and ending with the 2012 London Summer Games. The cost of

the combined broadcast rights/ sponsorship agreement was estimated to be an unparalleled

U.S.$2.2 billion (Mickle, 2008).

Developed by the International Olympic Committee (IOC) in 1985, The Olympic Partner

(TOP) programme provides sponsors with exclusive global marketing rights to the Winter and

Summer Olympic Games within a designated product or service category. General Electric’s

TOP sponsorship initiative focuses primarily on branding the company worldwide, and

marketing equipment and services from its infrastructure, energy, transportation and medical

equipment units. In order to maximize the potential of GE to develop and implement its

sponsorship effectively and reach its goal of branding General Electric in Asia, Peter Foss was

named President of GE Olympic Sponsorship. Selected personally by CEO Jeffery Immelt, Foss,

a transformational leader, immediately organized a GE WorkOut (Tichy & Sherman, 1993)

with the intent of developing the appropriate organizational structure and internal mechanisms to

most effectively facilitate the development and implementation of the sponsorship. As a result of

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the WorkOut, a new integrated organizational structure was developed that enabled GE to

market and sell across multiple business units and to generate significant “pull-through” revenue.

The success of General Electric’s TOP sponsorship results from several factors, including: 1) the

close relationship between NBC Universal/NBC Sports and the IOC; 2) the transformational

leadership and due diligence of key GE executives in preparing the organization for the

implementation of the sponsorship; 3) the development of highly effective marketing and

promotional initiatives across multiple business units; and 4) the success of its sponsorship

activation strategy, especially with respective to integrated marketing communications

throughout Asia, North America, and Europe.

Case Elements

The Global Sport Sponsorship Market

According to the PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2005-

2009, growth in merchandising and sponsorships, new broadcast rights agreements, the 2006

FIFA World Cup, and the 2008 Beijing Olympics, were expected to increase the value of the

global sport market to U.S.$111 billion by 2009, representing a 6.1 percent compound annual

growth rate (CAGR) over the four year period. Revenues sources identified in the report

included live sport events, broadcast rights fees, licensed merchandise sales, sponsorships

(including naming rights), and other packages providing rights to sport properties (Zimmerman,

2005).

The World Sponsorship Monitor (TWSM) 2008 Annual Review cited U.S.-based IEG’s

reference to a June, 2008, PricewaterhouseCoopers (PWC) report of the global entertainment and

media market from 2008 through 2012, which estimated that worldwide sponsorship spend

would increase from U.S.$42.7 billion in 2007 to approximately U.S.$60 billion in 2012. It was

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suggested that the reason for such a significant increase was the integration of mobile and

Internet channels into the activation of many sponsorships. Of the 1,446 sponsorships reported

in 2008, sport sponsorships accounted for 79 percent, which represented a slight decrease from

the 84 percent recorded in 2006 and 2007. Also of interest in 2008 was the increase in the

number of sponsorships that were valued over U.S.$10 million. This increase was due, at least in

part, to the Olympics, the U.S.-based National Football League (NFL) and Formula One (The

World Sponsorship Monitor, 2008).

SponsorMap (2009) reported that despite the economic turmoil and the reduction of

marketing budgets worldwide, spending on sponsorship for 2009 was positive. However, the

report did indicate that growth had slowed from 15 percent in 2008 to 3.9 percent in 2009.

Continued growth in sponsorship was attributed to media and consumer fragmentation and

globalization. The “sponsorship of key events is something that does bring this fragmented

audience together especially as new media integrates with sponsorship itself. For marketing,

major events can cross the media clutter and enable marketers to communicate through

sponsorship” (SponsorMap, 2009, p. 1) According to a report by SportsProMedia (2009), in the

first quarter of 2009 the value of all deals across the global sport industry was approximately

U.S.$29 billion. Of that amount, approximately U.S.$2.5 billion was spent on sponsorship, which

included five sponsorship agreements worth over U.S.$100 million each.

The Redmandarin (2009, p.1) agency places B2B sponsorship in “a sub-category of

sponsorship with one or two objectives, either to generate primary or secondary revenue”. B2B

sponsorship, therefore, is focused on targeting the sponsor’s customers, particularly business

decision makers. Redmandarin contends that although hospitality is an important part of the

B2B sponsorship, it is necessary for the sponsor to integrate its products or services into the

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property itself and demonstrate how the company positively impacts the operations or the

success of a sport property.

For numerous global brands sport sponsorship has emerged as an important dimension of

their worldwide marketing campaigns. Thus, the acceleration in the growth of sport sponsorship

is due not only to global business complexity and media channel fragmentation, but to a more

sophisticated approach to sponsorship on the part of brands and sport properties. This has

included improved measurement of the return on investment (ROI) generated from sport

sponsorship across a wider range of objectives, better demographic research and increased

flexibility, joint revenues, and performance related contracts. “The remarkable increase in the

number of sport properties available and the number of sponsors investing in sport properties

suggest that sponsorship is able to assist a company to achieve its corporate and marketing

objectives” (Seguin and O’Reilly, 2007, p.2).

Show (2009) reported that companies interested in brand building continue to focus on

data such as media exposure and surveys that measure awareness and perception. Companies

interested in direct financial returns continue to track sales leads and market share. In addition,

there is a focus on the measurement of the return on objectives (ROO), which includes

qualitative metrics. Reid (2006) indicated that a greater level of understanding of the

effectiveness of sponsorship exists and that it has become the purview of procurement specialists

and chief financial officers. Sponsorship is undertaken for a wide range of objectives and its

success is judged against those objectives.

The Olympic Partners (TOP)

The financial success of the 1984 Olympic Games in Los Angeles demonstrated to the IOC that

corporate sponsors would be required to provide the profit necessary to sustain the Olympic

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Movement. “The Los Angeles Olympic Games in 1984 changed the way in which Olympic

sponsorship was conducted and the way in which Olympic sponsorship programmes have

evolved since then” (Kenyon and Palmer, 2008, p. 29).

Due to considerable ambush marketing at the 1984 Games, in 1985 the IOC established

The Olympic Programme (TOP), which allowed a limited number of sponsors to receive special

benefits on a worldwide basis while achieving product category exclusivity and protection. That

programme was re-named The Olympic Partners (TOP) in 1995 because of the partner nature of

the relationship the IOC had with a limited number of multinational companies. The TOP

programme created a stable revenue base for the IOC and facilitated relationships with major

corporate sponsors worldwide (Giannoulakis, Stotlar, & Chatziefstathiou, 2008).

General Electric

The General Electric Company is a diversified multinational technology and services

conglomerate incorporated in the State of New York with its world headquarters in Fairfield,

Connecticut, U.S.A. In 2009, Forbes Magazine ranked GE as the world's largest company, with

323,000 employees worldwide and annual revenues exceeding U.S.$180 billion (Forbes.com,

2009).

As a Worldwide Partner of the Olympic Games, GE is the exclusive provider of a wide

range of innovative products and services that are integral to a successful Games. From

providing power, lighting, security and modular space solutions at Olympic venues to

supplying ultrasound and MRI equipment to help doctors treat athletes, GE works closely

with the Organising Committees, local municipalities and other Olympic Partners to

understand their needs and then deliver solutions that only GE can. NBC Universal, a

division of GE, is the exclusive US media partner of the Games. The GE and NBC

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Universal partnerships extend through 2012. GE is a diversified group of 11 businesses

dedicated to creating products and services that make life better. From aircraft engines

and power generation to medical imaging, television programming, and plastics, GE

operates in more than 100 countries and employs more than 320,000 people worldwide.

(International Olympic Committee, 2010, p. 1)

Andy Bateman, CEO of Interbrand Corp, which ranked GE No. 4 on its list of best global

brands in 2008, stated that:

GE has been a leader in the whole arena of sustainability and has a strong environmental

policy. It is not just a market cause but [also] a real business issue. More than half of GE's

revenue now comes from outside the U.S., a figure that is sure to increase as GE invests

more brand-building resources in emerging markets such as China, India and EMEA

(Europe, the Middle East and Africa). (BtoB Magazine, 2008, p. 1)

Transformational Leadership

According to GE CEO Immelt (2010, p.1), “we [GE] have always believed that building strong

leaders is a strategic imperative. When times are easy, leadership can be taken for granted. When

the world is turbulent, you appreciate great people”. Transformational leadership has been an

important dimension of GE culture since Jack Welch became CEO in 1981. One of the key

factors in transformational leadership is the leader’s ability to motivate all members to achieve a

common goal consistently. Transformational leaders are able to motivate followers in three

unique ways. First, by increasing social identification within a group since when one feels pride

in belonging to a group, one is likely to increase productivity performance outputs in order to not

let the group down. Second, by providing a clear vision the transformational leader instills

confidence in each member of the group that goals can be achieved. Third, by building

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congruency among the individual group members the transformational leader helps each person

believe strongly that his or her part is meaningful in achieving team goals (Bono & Judge, 2003).

Overall, transformational leaders, regardless of the task, display various traits that are

outward focused and more concerned with the group or team outcome. Dubinsky, Yammarino,

Jolson, and Spangler (1995) suggested that supervisors who exhibit transformational leadership

increase awareness of the importance and value of designated group outcomes and enable

employees to transcend their own self-interests for the sake of the group or organization.

Research has shown that transformational leadership represents the most active form of

managing others to perform beyond transactional expectations. Rubin, Munz, and Bommer

(2005, p. 845) cited the following:

Podsakoff and colleagues extensively reviewed seven conceptualizations of

transformational leadership behavior and found that it included articulating a vision of the

future, fostering group-oriented work, setting high expectations, challenging followers’

thinking, supporting followers’ individual needs and acting as a role model.

Bass (1985) identified four key characteristics of a transformational leader. First, a

transformational leader must display charismatic leadership traits. These include the ability to

have a vision of important issues and the ability to motivate others to move towards that vision

through trust and confidence. Second, a transformational leader must manifest inspirational

leadership using simple, clear communication. This trait gives a person the sense that he or she

can achieve more than what was originally thought possible. The inspirational leader motivates

others by creating a sense that he or she has experienced similar issues in the past and can

therefore provide a clear road map to reach the newly stated goals. In effect, these leaders offer

new solutions to old problems. Third, a transformational leader must display individualized

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consideration, where each employee or customer is treated as an individual. This type of

leadership instills a feeling of mentoring and builds trust with the employee or customer. Last,

the transformational leader must provide intellectual stimulation. Under this scenario, the leader

encourages employees to use new and innovative ideas to solve existing or old problems. Any

program that requires massive change in either organizational dynamics or process will require

transformational leadership.

The GE WorkOut

The GE WorkOut was developed in 1988, after CEO Jack Welch emerged from a

meeting with mid-level managers in which many of them expressed concern that their leaders did

not share GE values and process was slowing down most decisions (Tichy and Sherman, 1993).

In order to address this issue, Welch took action to develop a program where process could be

streamlined and overall ownership could be narrowed to one or a few individuals. The key

principles of the new WorkOutprogram were that it: 1) improved process but did not solve

technical problems; and 2) considered that knowledge of issues and process was in the heads of

the participants, therefore bureaucracy must be eliminated, and quick decision making by

business leaders is critical.

The GE WorkOut has been used successfully by hundreds of organizations worldwide.

“The focus is on fast implementation of measureable improvements with clear lines of

accountability - obtained with speed, simplicity, and self-confidence” (C.A. Schifman &

Company, 2009, p. 1). The goal is for the organization to become lean, efficient, and responsive

to changing market conditions. WorkOut involves bringing a cross-functional group of people

together to develop actionable recommendations to a business challenge that has been identified

by leadership as a priority for improvement.

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Recommendations are tied to action plans that, if approved by leadership, will be

implemented within 90 days. The GE WorkOut process builds cooperation between

functional silos and organizational levels, and increases morale by instilling values of

excellence, involvement and growth. (C.A. Schifman & Company, 2009, p. 1)

A general template for the WorkOut process can be summarized as: 1) a group of

employees (and other key stakeholders as necessary) and their leader meet; 2) the leader charges

the group (s) with solving a problem or set of problems shared by the people but which

ultimately are the leader’s responsibility; 3) after the leader leaves, the group(s) spends two or

three days working on developing solutions to the problems under the guidance of skilled

facilitators; 4) at the end of the meeting, the responsible leader rejoins the group(s) and hears its

recommendations -- many other key leaders in the organization are also invited to be present

during this final session; 5) the leader has two response choices on each recommendation: “yes”

or “no;” and 6) the entire activity has strong management support, and middle level resistance to

the process or outcome is not tolerated. In fact, it is acknowledged within GE that obstructing the

efforts of the WorkOut process is a “career-limiting move” (Stewart, 1991, p. 4).

The WorkOut process has twelve steps that start with an initial session in which ground

rules, introductions and roles are defined. In the next step the team identifies the problem that

needs to be addressed and brainstorms the problems and current barriers to enact change. Once

the problem and barriers have been identified, they are categorized and prioritized. At this point

the focus shifts to brainstorming solutions that are then assessed from a pay-off perspective. As

noted by Welch (2001, p. 182) “WorkOut meant just what the words implied: taking

unnecessary work out of the system.”

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An important aspect of WorkOut is that its foundation is built on teamwork and trust.

Most people, when newly placed into a team environment, tend to think that others don’t share

the same values. In fact, people tend to stereotype and when this is coupled with incongruence,

an environment of distrust is generated (Bowditch & Buono, 2005). As stated by Bowditch &

Buono (2005, p. 170) “conditional trust is a willingness to interact with others as long as each

behaves appropriately, uses a similar interpretive scheme to define the situation, and can take the

role (empathy) of the other.” In contrast, the optimal state of teamwork is unconditional trust,

where teammates have confidence in each other values and a sense of mutual identification.

General Electric also engages its Change Acceleration Process (CAP) (Von Der Linn,

2009), which is linked directly to the outcome of the WorkOut. The CAP is initiated to attain

specific goals, define roles and responsibilities, develop processes and procedures, and manage

interpersonal relationships that are used to define the most appropriate model of teamwork

(Tichy and Cardwell, 2002). The CAP is based on four critical dimensions, referred to as GRPI.

The first dimension (G) is focused on goals and the mission required to achieve them. For

example, it is important that the team accept the goals developed during the WorkOut and that

they are congruent with the team’s environment.

The second dimension (R) is related to roles and responsibilities and how the team’s

competency level supports achievement of the goals. The third dimension is focused on having

the right process and procedures in place (P) to ensure effective problem solving,

communication, decision-making, and resource allocation, which should be in line with the

goals. The last dimension of the GRPI model is interpersonal relationships (I), where trust,

openness and acceptance are key attributes that must be met for the project to be successful. The

GRPI model is the engine that allows GE teams to move from conditional trust to unconditional

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trust in a timely fashion (Tichy and Cardwell, 2002). In summary, the GE WorkOut provides

the framework of a new initiative while the CAP actually serves to develop the tactical plan for

execution.

Case Diagnosis

NBC Universal/ NBC Sports, the media business unit of General Electric, has provided

broadcast services for successive Olympic Games since 2000. In May, 2003, when NBC Sports

was bidding for the rights to the 2010 Winter Games in Vancouver and the 2012 Summer Games

in London, General Electric’s top management made a strategic decision to seek “preferred

vendor status” with the International Olympic Committee (IOC). NBC’s winning bid represented

a 33 percent premium compared to what NBC Sports paid for the 2006 and 2008 Games. In

addition, General Electric paid approximately U.S.$180 million to join The Olympic Partners

(TOP) sponsorship program. The combined cost of the Olympic broadcast rights and the TOP

sponsorship agreement totaled an unparalleled U.S.$2.2 billion (Mickle, 2008).

According to Peter Foss, GE’s President of Olympic Sponsorship, the TOP Sponsorship

was “really for identification. GE, from a standpoint of brand awareness and company awareness

had an opportunity to highlight our technologies” (Personal communication, March 6, 2009).

Although GE’s sponsorship of the Olympic Games extends from 2006 through 2012, and covers

various countries, GE chose to focus on China because it was determined that the spend for

infrastructure projects and upgrades for the 2008 Beijing Olympics would be in the U.S.$250

billion range (Weiner, 2008). Foss confirmed that the sponsorship “was a China play. It was

also a natural extension of the relationship that NBC has had with the IOC. Clearly, it fit into a

strategy we have for growth, big growth, here in Asia” (Weiner, 2008, p.1). Foss (personal

communication, March 6, 2009) also confirmed the importance of NBC Universal, stating that

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“when you’re trying to develop business in China, there’s substantial value to having the

footprint and branding that NBC Universal has here.” And he also confirmed that GE’s primary

objective of the TOP sponsorship was to build brand equity across Asia and to enter the Chinese

market.

Beth Comstock, GE’s current Chief Marketing Officer (CMO), indicated that General

Electric’s management made the decision to seek preferred vendor status based on: 1) their

vision, rather than on specific market research, and 2) the objective to use the TOP sponsorship

as a vehicle to develop its international business specifically in Asia and Europe (personal

communication, November 17, 2009). Asked whether there was significant marketing research to

support the sponsorship, Comstock stated that “no, there really wasn’t. One [factor] was that

NBC already had a great partnership with the IOC, so we had to count on the trust and

relationship that Dick [Ebersol] … had. So, … it made sense for us as a company to take a bigger

role. We didn’t really know what to expect, honestly, until the deal was done and we started to

see what the opportunities were.” Relative to GE’s marketing and selling objectives, Comstock

(Personal communication, November 17, 2009) added:

The other thing that I have to underscore is at the time we took the Olympics

[sponsorship] we really were trying to push from a commercial – a sales and marketing

perspective – cross-selling. Selling is the enterprise of GE. And it’s very hard to do. The

Olympics allowed us to focus on this …in a very powerful way, that made it real. So the

teams that came together for the Olympics- they’ve now gone on and they’re doing other

things. So, [now] we [GE] have FIFA soccer stadiums. We have stadiums – projects with

the NFL. We have construction projects looking at casinos in Macau- so it (the Olympic

TOP Sponsorship) had a multiplier effect that I’d love to tell you was all part of our plan.

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I think the other thing about Beijing specifically is, of course, the same government

officials who are making the Olympic decisions …after the Olympics are over, all those

relationships are still there.

Former GE CMO Dan Henson, who was named B2B Magazine’s Marketer of the Year in

2007 (Maddox, 2007), indicated that GE sold over 335 products and infrastructure services as

part of the Beijing initiative, which included anything from rainwater recycling to power

turbines. Henson stated that GE has “always been good at selling in the context of the P&L

structure, but the Olympics forced us to be adept at responding to opportunities that span three,

or four or five business units. Through Beijing, we have learned how to work across our business

units and present one GE face to the customer” (Maddox, 2007, p. 2).

Henson was credited with being instrumental in the development of the GE’s

“Ecomagination” initiative, which represented a complete transformation in terms of the manner

in which GE is developing products, selling to customers, and entering emerging markets.

According to Maddox (2007, p.1), GE will “double its investment in R&D for environmentally

sound products – to U.S.$1.5 billion by 2010. The company also said that it would double

revenue from products and services that provide measureable environmental performance

advantages to customers, reaching U.S.$20 billion by 2010.”

In fact, even before the Beijing Olympic Games began, GE already had credited its TOP

sponsorship with generating over U.S.$700 million in China-related sales.

The games allow GE to tout its eco-friendly products, like water filtration systems at the

National Stadium and solar-powered lighting at Fengtai Softball Field. GE views the

Olympics as practice for other “mega-events” –such as the Asian Games, in Guangzhou

and the Shanghai World Expo, both in 2010. (Coster, 2008, p. 2)

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Coster (2008) reported that NBC’s influence in Olympic host cities provided for larger, more

lucrative opportunities for GE, particularly in global markets and particularly for GE’s U.S.$58

billion infrastructure division, which will continue building power plants and water treatment

facilities in China and throughout Asia well after the 2008 Beijing Games.

In order to maximize the opportunities provided by The Olympic Partner programme, GE

was required to transform its marketing and sales units into a new integrated organizational

structure that allowed the company to maximize its exposure and to insure that product/service

pull-through marketing opportunities were realized. In order to meet the transformational criteria

required, GE opted to use the GE WorkOut.

When Peter Foss was charged by GE CEO Jeffery Immelt to manage GE’s Olympic

sponsorship efforts in 2003, his response to Immelt was that he wanted to create an Olympic-

centric organization. After Immelt’s agreement, Foss’s first step was to conduct a WorkOut

session at GE’s Crotonville, N.Y., campus with all key stakeholders (Foss, personal

communication, March 6, 2009). His vision was a new, very flat, and non-bureaucratic

organization. In fact, he insisted on having a single point of contact from each of GE’s business

units. That individual would be responsible for driving revenue for his or her respective business,

but would also have a matrixed relationship with other profit/loss and cost centers internal to GE.

One of the major outputs of the sponsorship-focused WorkOutsession was that four

teams were developed, each with its own focus on revenue generation, public relations,

marketing, or hospitality. These teams reported directly to Foss and were matrixed to the

business unit leaders. Another critical output of the WorkOut session was the measurement of

progress towards preset goals for each team and business unit. The team opted to create simple

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visual dashboards that were based on real time data and would indicate red and green markers,

where red indicated that a gap existed in reaching goals and green indicated that no gap existed.

Data allowed the leadership teams to make quick, fact based decisions and, according to

Foss, the data showed where GE had weaknesses or gaps in product or service offerings and

where they were required to partner with other firms to meet the needs of the customer (Personal

communication, March 6, 2009). Additionally, GE created “heat maps” that provided flash data

on which specific GE products and services were being utilized at each venue (Katsuleres,

personal communication, November 19, 2009).

The impact of the Crotonville WorkOut on GE’s Olympic marketing endeavors was

profound. The most compelling data point was that the growth in non-advertising revenue

increased from U.S.$80 million generated during the 2006 Torino Winter Games to U.S.$700

million generated prior to and during the 2008 Beijing Summer Games. Other key metrics of

success included the fact that GE had over 300 Olympic related projects underway in China by

2005. This included the construction of the national stadium and major power projects that

involved the installation of over 700 gas, hydro, and wind generator systems. According to some

estimates China could be a U.S.$1 trillion green technology market for environmentally

sustainable "green technologies" going forward. GE involvement emanates from 300 potential

green technology options for China, spanning energy, water, buildings, transportation and

industry. Due to the migration of approximately 18 million people from rural areas to urban areas

each year, it is estimated that by 2050 China will have more than 200 cities with populations of

more than one million people (Wanxian, 2008).

Additionally in Beijing, GE sold MRI and ultrasound equipment through its healthcare

unit and aided in the design and construction of oil and gas pipelines within China. Most

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importantly, GE created a multi-billion dollar “pipeline” of future opportunities such as the

Asian Games in Guangzhou and plans for China to build over forty airports by 2010 (Coster,

2008). Thus, GE was able to create a “One GE” approach, replicable across venues anywhere in

the world, to solving large-scale infrastructure problems, such as building the infrastructure

necessary to support entire cities or large complex facilities.

According to Chris Katsuleres (personal communication, November 19, 2009), Director

of Olympic Marketing and International Advertising, when GE began its sponsorship activation

in Torino, the GE leadership team decided that it was important to educate and engage its

330,000 person workforce to ensure that its marketing approach was understood. This was

considered to be a critical element of the internal activation phase of the TOP sponsorship. First,

GE created an Olympic portal on the company’s intranet to keep all employees informed about

GE’s Olympic related activities. For example, GE created a selection of global sales programs

called the “Decathlon Challenge,” which was an employee incentive program that enrolled

approximately 40,000 GE salespeople worldwide. Using a simple digital framework, sales teams

were able to develop customized Olympic Games-themed sales incentive programs for

employees and distributors. After a pilot program was initiated for the 2006 Torino Winter

Games, 150 Olympic Games-themed sales incentive programs across GE businesses worldwide

were established for the 2008 Beijing Summer Games. These programs resulted in more than

U.S.$190 million in revenue growth in 2007 and 2008 (Katsuleres, personal communication,

November 19, 2009).

Additionally, GE researched its employee database and discovered that 17 current

employees had participated in past Olympic games. In fact, of those 17 past Olympians, three

were awarded medals (one gold, one silver and one bronze medal). Once this information was

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secured and validated, various stories about GE’s past Olympians were created and posted on the

GE intranet portal in order to effectively communicate these exciting stories to the entire GE

community.

Another way in which GE engaged its global workforce was at the 2006 Torino Winter

Games; employees sent welcome messages to the Olympic community. These were displayed at

the lighted monument that GE constructed in the likeness of a famous local mountain called “Il

Dente Del Gigante.” It was estimated that over tens of thousands of messages were posted

(Katsuleres, personal communication, November 19, 2009).

The GE Imagination Center, located on the Olympic Green in Beijing, was the primary

location for most of GE’s hospitality related events in 2008. The two-story, 16,500 sq. ft./1500

sq. meter pavilion showcased the multitude of innovative technologies that GE used to build

much of the Olympic infrastructure. The Imagination Center hosted more than 6,000 visitors per

day and featured self-guided interactive tours that profiled GE technologies that were related to

the five core Chinese elements of wood, fire, earth, metal, and water (GE.com, 2008). The GE

Imagination Center connected GE’s energy, water, health care, transportation and lighting

businesses with Chinese culture in an educational and entertaining way. GE made significant

contributions to more than 400 infrastructure projects in and around Beijing, including all 37

official Olympic Games venues and 168 commercial buildings.

GE launched an extensive advertising campaign in China prior to and during the 2008

Beijing Olympics. The objective of the advertising, according to the executive creative director

of advertising agency BBDO New York, was to humanize GE and at the same time demonstrate

to worldwide investors that GE was a major player. BBDO was instrumental in incorporating its

sister agencies in Shanghai and Europe to help integrate foreign sensibilities into GE’s ads

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(Deutsch, 2008). According to James Gregory, chief executive of CoreBrand, a brand strategy

company, GE didn’t have universal brand awareness outside of the U.S., and the Olympics

provided an international forum to increase it (Deutsch, 2008).

As the company did in Torino and Beijing, GE developed several marketing initiatives

for the 2010 Vancouver Winter Games and the 2012 Summer Games. According to GE’s Global

Executive Director for Advertising and Branding, Judy Hu (personal communication, November

17, 2009), GE constructed an outdoor ice rink at the 2006 Winter Games in Torino that was an

unmitigated success- it became the focus of much of the socializing that occurred during the

event. Building on that success, in 2007 GE entered into a U.S.$1.6 million sponsorship

agreement with the Province of British Columbia to assist with the refurbishment and reopening

of an ice rink at Robson Square, which was renamed the GE Ice Plaza (Ministry of Economic

Development, 2007). The Minister of Economic Development and Minister for the Asia Pacific

Initiative and the Olympics, Colin Hansen, stated that “the presence of GE next to the Commerce

Centre will give businesses in British Columbia an unprecedented opportunity to access a world

leading corporation that operates in many different business lines” (Ministry of Economic

Development, 2007, p. 1). Also in Vancouver, GE Healthcare provided a U.S.$4.5 million

mobile medical unit, which was funded through GE’s sponsorship value-in-kind agreement with

the Vancouver Organizing Committee (VANOC). At the conclusion of the 2010 Winter Games,

the Province of British Columbia purchased the unit from VANOC (Vancouver Organizing

Committee, 2009).

The GE Healthcare unit will also have a significant presence at the 2012 London Summer

Games, with much of the value-in-kind-medical equipment remaining in the hospitals of East

London after the Games are completed. Interestingly, in May, 2009, GE announced that it would

22

spend approximately U.S.$3 billion to create at least 100 health-care innovations that would

lower costs, increase access and improve the quality of medical care worldwide (Immelt,

Govindarajan, & Trimble, 2009).

Also, for the 2012 London Games:

GE launched a ground-breaking moving image campaign on the side of London taxi cabs

featuring a technique known as ‘motion lenticular technology’, never before used on the

exterior of a taxi cab. The campaign …. features 300 London cabs displaying the new

Olympic Games designs as side panels. Two creative executions have been developed –

one that depicts an Olympic hurdler, the other a cyclist. As a result of the printing

technology used, as the cab moves along the streets, the images appear to be animated.

(General Electric, 2008, p.1)

Another initiative for 2012 featured an Olympic-themed business event aimed at

educating audiences about complex infrastructure issues and solutions for host cities. The event

focused on topics related to smart and sustainable building for the future, and highlighted

technologies that GE businesses expect to implement for London 2012 and other UK

infrastructure projects (General Electric, 2008).

Key “Lessons Learned”

• The TOP sponsorship represented a brand-building tool for GE, however, the early

decision in 2003 to sponsor the 2008 Beijing Olympics allowed for activation of the

sponsorship to begin as early as 2005. This allowed GE to avoid marketing clutter since

local sponsors were not ready to activate in 2005. Since GE was ahead of the clutter

curve, as sponsorship activity increased among other sponsors, GE modified some of its

activation initiatives but also held steady on others. Early activation in China was

23

communicated totally in the Chinese language and only in the last few months prior to

the start of the Olympics were activation initiatives conducted in both English and

Chinese. The GE Imagination Center allowed GE to communicate directly with Chinese

consumers and was the only element of the TOP sponsorship with a B2C focus.

• Everything GE did to activate the sponsorship on the ground in Beijing was focused on

making significant in-kind, real, tangible contributions. Stories about GE’s contributions

to infrastructure, energy, health care, etc., were communicated to Chinese businesses and

consumers alike.

• GE conducted annual Brand Tracker studies in China from 2005-2010, which confirmed

the overall impact of association with the Olympics- including brand awareness. In

response to the question “are you aware of GE sponsorship of the Olympics?” (aware vs.

unaware), host country data were 1/3 higher in awareness in 2010 than in 2005 and

indicated overall favorability of GE. Post Vancouver Brand Tracker measurement was

comparable to Beijing.

• It was comforting and reinforcing for GE to know that their sponsorship investment was

paying off in enhanced brand awareness, which was one of the most important objectives

of the sponsorship. There also was a strong relationship perceived by Chinese consumers

that GE was involved in “green energy” with a focus on sustainable technology, medical

devices, aviation, and water purification.

• GE focused its sponsorship messages around real contributions, not just the fact the GE

was an Olympic sponsor. The GE story was told at the tangible level. For China it was

infrastructure, wind turbines, pure water, etc. “What we are doing on the ground is key.

Sponsorship messages have to be rooted in what we contribute. In Vancouver the most

24

tangible contribution was providing health care for athletes, which included the mobile

medical unit, etc., and for London it is infrastructure and health care”. (Katsuleres,

personal communication, November 19, 2009).

• The real legacy for GE was in the relationships coming out of the Beijing Olympic

Games with key government officials – the sponsorship was the “door opener.” In all

markets, because of the nature of GE’s business, it has a long-term play. Although the

primary relationship is with the IOC, what can’t be underestimated is the importance of

developing a positive working relationship with the local organizing committee (LOC). It

is of major importance to understand how the LOC is structured and how it functions.

• GE realized early on that it couldn’t possibly manage the Beijing Olympic sponsorship

from the U.S. There was significant commercial activity on a daily basis in Beijing and it

was necessary to have a team there to look at and report the “big” opportunities.

Customers want to deal with “one face” – a single point of contact and the GE approach

was: How can we help you find a solution?

Conclusion

It is clear that to date, the General Electric Company’s B2B-focused TOP sponsorship has been a

success from branding, return on investment (ROI), and return on objectives (ROO)

perspectives. It is also clear that without the transformational leadership and the keen insight of

Peter Foss and other key GE directors, the degree of success would not be nearly as significant.

GE opportunistically leveraged the long-term relationship between NBC Universal/ NBC Sports

and the International Olympic Committee to position itself for the sponsorship and for entering

the diverse and rapidly developing markets of Asia. Focused on infrastructure, water treatment,

25

energy and health care, GE developed, implemented, and activated its TOP sponsorship to brand

the company, especially in Asia, and generate revenue in Asia, Europe and North America.

Perhaps one of the most interesting aspects of GE’s sponsorship initiative was the

internal transformation of the company through its use of the GE WorkOutand CAP. This was

a critical requirement that was needed in order for GE to reach its key goal of developing the

ability to provide an "end to end" solution with regard to major infrastructure, energy, and water

treatment - regardless of the venue. GE's leadership team was convinced that this would be a key

differentiator going forward and was able to demonstrate that the new streamlined model for

marketing and sales worked in Torino, Beijing, Vancouver, and London.

The GE sponsorship demonstrated that it is essential for a corporation’s sponsorship

goals to fit the broader objectives of its overall marketing communication strategy. The GE

sponsorship was synergistic with the rest of its promotional mix, especially with the

“Ecomagination” initiative, and provided an opportunity to complement all of its marketing and

brand building efforts and leverage its sales objectives by creating an integrated marketing

program. The GE TOP sponsorship provides a successful model for sport marketers, brand

managers, CMOs and CFOs.

26

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Documents

Case study. GE's Olympic Sponsorship