Strategic Analysis Of General Electric Company

Discussion on GE’s central competencies and capabilities

The General Electric is one of the popular infrastructure company. Besides, they consist of a substantial midmarket lending company under GE capital. With this two main business, they aim to expand the footprint of the infrastructure. Globally, their value is 100 billion dollars and has been continuing to create a costly specialty business of finance.

In the following report, the core capabilities and competencies of General Electric are identified. Next, the two strategic options for GE are outlined and discussed. Lastly, the management of Jeff Immelt and Jack Welch are compared and contrasted.

This has included various advanced technological abilities and expert human resources. This brand is well equipped with developed technological powers in multiple sectors. This includes renewable energy, oil and gas, healthcare, transportation and electricity. Apart from this, the organization has been skilled and focusing on human resources, which are found to be a vital force beyond their global success (Idelchik 2017).

To understand the core competencies of GE, the VRIO analysis of GE is performed here. It is illustrated below through understand various capabilities and resources of GE.

Global presence Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	GE is found to be operating throughout the world around 130 countries. Here, its worldwide presence is an extraordinary ability and sign of the success also.
Equity and brand image	The brand equity and brand image that is created also comprises of vital abilities. From that abilities, the brand has created a high level of trust. This has facilitated the success of the business (Einspruch and Brown 2014).
Technological capabilities	GE’s technical abilities are present at the central part of the business. Here, they are the primary source of various competitive advantages and differentiate the organization from a various crowd of its brands.
HRM and culture	It is seen that GE has maintained high focus over Jack Welch and HRM. They are popular to have managed smart organizational culture and business.
Customer loyalty	Because of its effective services and products GE has managed a huge level of customer loyalty (Sarwar 2017).

A strategic Analysis of General Electric Company is illustrated below:

Resources/capabilities	Valuable	Rare	Inimitable	Exploited	Implications
Brand Image/equity	Yes	Yes	Yes	Yes	Competitive advantage
Global Presence	Yes	No	No	Yes	Temporary advantage
Technology	Yes	Yes	Yes	Yes	Competitive advantage
HRM & Culture	Yes	No	No	Yes	Temporary advantage
Customer loyalty	Yes	No	No	Yes	Temporary advantage

The industrial revenues of GE have been kept flat till 2017. This is because of the rise in the revenues of the industrial segment. This is of 3.3 billion dollars offset through a decrease in industrial eliminations and corporate revenues. This indicates a 3% of the rising in rising in renewable energy, oil and gas. Along with this the healthcare and aviation are the partial offset through decline around power, lightning and transportations. Here, the rise has been primarily because of net effects of acquisitions of 6 billion dollars (Schmidt et al. 2018). This is mainly attributable to Baker Hughes. Further, a weaker U.S. dollar has also resulted in the impact of 6 billion dollars. This is partially offset from the net effects of different dispositions of 3.4 billion dollars.

This is mainly attributable to appliances. Besides, the impacts of translational, placements and acquisition currency exchanges, their organic revenues at industrials segment has risen to 0.1 billion dollars. The industrial eliminations and corporate revenues have decreased to 3.3. Billion dollars. This is primarily driven through lesser gains over a various disposed business and greater non-cash. This is held for sale charges. Their revenue in the year 2016, has included different profits of 3.1 billion dollars from the sale of GE appliance business and 0.4 billion dollars from the sale of GE asset management (Attix and Tochilin 2016). Further, their income in 2017, has included a profit of 1.9 billion dollars from the sale of Water business. It has also included various charges related to business. This is classified as held for sale that involves a lightning segment of GE’s substantial majority of their lightning segment. It also consists of two non-strategic business of aviation for 0.6 billion dollars. Lastly, it is seen that their revenues of financial services have fallen by 1.8 billion and about 17% primarily for greater impairments and declined to organic revenues (Skillshub.northampton.ac.uk 2018).

Efficiency in supporting the success of the corporation to date

Besides, for every of Immelt’s success to change GE’s business model and guide GE across the challenges of the current century, the economic performance is found to be lagged. During 2002-2003 Immelt has been seen to be established ambitious performance targets for General Electric. Here, the sales growth at two to three times that of worldwide GDP. Further, it has included 10 % and above earnings growth and 20% and return on the overall capital. The performance of GE has been found to be short of the targets. The GE share price has shown that as an appointment of Immelt has announced late in 2000 (Hausman 2018). The stock of GE has been trading at 53 dollars. Here, for most of 2001-08, the shares of GE has been fluctuating between 20 dollars and 40 dollars. However, this has been in the midst of the economic crisis where the stock of General Electric has fallen below six dollars by March 2009. Yet, within April 2012 it is found to be rising to 19.81 dollars.

The possibilities are selected according to an annual report of GE. Here, a website of GE is chosen from various researched for GE news. First of all superior technology and development for different initiative solutions are considered. Here one of the vital strategies that have been leading GE for the future is an excellent development and technology. This is for initiative solutions. GE has been providing more interest in the event of technology by investing from 5% to 6%. This is from the overall revenue per year for creating new products (Meliopoulis 2017). Due to this investment, GE has transferred from a business that has been generating one engine in the past decade. This is to produce one single engine every year. In a real scenario, this is not only the latest product that GE has been searching for.

However, the products have been economical and providing initiative solutions for the current issues that society has been found to be suffering. Here, hiring of initiative people who are capable of gaining the targets and providing enough training for enhancing the skills that the direction has been providing with advantages. This has been more than any other firms. This has been not only concentrating on the quality of products. However, they have out the fingerprint over the products. For example, in the business care, GE had sold various products in the 90s in 2013. Thus they have succeeded to seek, more and differentiated customer advantages. This is due to the reason that they have known to deliver the technology got the customers. Apart from this, they have known how to achieve that at all the price point with huge margins (Lof 2015). Thus GE has been spreading the ideas across six global research centres. Thus they have been provided with that to new ideas. However, the concepts have been helpful for the local market for which they have been working on. Here, the investment in technology has been providing considerable advantages to GE. This has resulted in the increment in stability and revenues that have been witnessing market requirements.

Evaluation of two strategic options for GE

For using the technology, there has been published news in Financial Times. This has stated that GE technology has been saving 130 million litres of water every year. This is done by using chemical, advanced solutions for treatments. This is for water at Heathrow airport. Starting from the department of health care, t5he ideas of innovations that are used in the Olympic Games held in Rio De Janeiro in 2016. With the innovative software of GE, they have supplied to an international Olympic committee (Robertson and McCarthy 2019). This is done with innovative health data management. This generates the electric medical records for every patients and athlete who have been found to be visiting Olympic Clinic’s Polyclinic. The medical solution has been supporting the doctors to understand the medical history. Due to this, they can plan and retrieve the best results.

Two strategic options for GE are demonstrated hereafter. The first one is product development. It is the main intensive growth strategy in the business of GE. The growth is gained through new products that have been rising the revenues of a company’s sales. Within the intensive approach, GE has found to maintain research of high-productivity and process of development (Hill 2017). Here, the process has assured a leading edge. This has been done against various competitors in the different gas, oil, energy and aerospace. This differentiation of generic competitive strategy has needed the development of a product to focus on the uniqueness of products. Thus the strategic objective from product development has been integrating the technologies of cutting-edge in various products that are developed by GE (Skillshub.northampton.ac.uk 2018).

The next strategy is market penetration. Here, the general electric company has implemented penetration of market as the secondary strategic of intensive growth. Under market penetration, the company has been rising by the customer base in the present demands. Here, for instance, GE has applied the intensive strategy across marketing campaigns. This has aimed to incorporate latest customers and different corresponding accounts. Thus GE has raised its revenue base, though it has faced many competitive forces. This generic strategy of differentiation has enabled GE top get success to implement market penetration (Hanson 2014). Here, for example, with the competitive benefits from advanced features and product uniqueness has penetrated to electric lighting, aviation or aerospace and healthcare industries. This strategic objective is based on the penetration of the market. This generates aggressiveness of GE in marketing their products. This is done against various competitors like Siemens and 3M. 

Through considering the considerable significance of competitive rivalry in the industry environment of General Electric, the primary recommendation is to develop the competitive advantages of the business. For instance, developing a brand image of GE can incorporate to the competitiveness of GE. Thus, advancing research of GE and development abilities. Thus they can correlate with greater competitive benefits. Secondly, through considering the various external factors, another recommendation has been to deploy strategies for rising loyalty of customers.

Thirdly, approaches of public relations in strategy are the corporate social responsibility of GE is essential in this aspect. In this way, the strategy can address the customer’s bargaining power. For sending the ability of suppliers, GE can deploy the program of supplier diversity. This has been minimizing the overdependence on some suppliers in the worldwide market. Thus the program has been accounting for various probable changes under supply chain management and approached GE ‘s operation management. However, despite the lesser intensities that is determined from external analysis, the threat has been substituting and a threat to new entrants are also issued. This is for managerial considerations in the formulation of GE strategy.

Lastly, each of the strategies is aligned with generic competitive strategy and strategies of intensive growth. This is done through remaining pertinent to various characteristics and dynamic of gas, healthcare, transportation, aviation, aerospace, electric lighting, energy and oil industries.

Considering the threats, opportunities, weaknesses and strengths in the case of GE has been emphasizing the needed strategic approach. This expands and grows the business under the scenario of fast-changing environments of an industry.  The managers have required to be a focus on stability and growth. Thus they have been capitalizing the business scopes and strengths. Thus they have been developing solutions for protecting GE from the impacts of threats and weaknesses. From this, various recommendations of GE are demonstrated below.

• Rise in a degree of penetration in various developing markets, particularly in Asian markets.
• Expansion of operations of GE’s renewable energy segments for taking benefits of the rise in a renewable energy market
• Diversify the industries included where digitalization is significant.

The above strategies can be understood by applying the academic model like Kaplan’s Balanced Scorecard. This is helpful to know how the procedure can be evaluated and monitored. 

The above-balanced scorecard has been coined in the 90s. The approaches of the root are deep. This involves the pioneering tasks of Generic Electric on performance measurement that is reported in the 1950s. Identifying some of vagueness and weakness of prior management approaches, the approach of balanced scorecard has provided a precise prescription. This what the companies have measured the balance the economic perspective. Kaplan and Norton have demonstrated the innovation of the balanced scorecard (Friedman 2017). According to them, the balanced scorecard retains conventional financial measurements. However, the economic measures have revealed the takes of prior events. This is the sufficient story for industrial age companies. This is for the investments in various long-term abilities and relationships of customers that are not complex for success. The economic measures are insufficient (Hagenmuller and Van Gool 2015). However, this to guide and evaluate the overall journey in the information age. Here, GE should utilize this develop future values. This must be done through investing on innovation. Technology, processes, employees, suppliers and customers. 

	STRATEGIC OBJECTIVES	KEY PERFORMANCE INDICATORS	TARGETS
2019	2021	2023
FINANCIAL	Develop an efficient commercial effective counsel. This is to bring together the marketing leaders and best sales to provide best practices.	NPS of Net promoter score and Six Sigma to track the loyalty and customer’s attitude.	5%	10%	12%
To increase the overall revenue by 10% annually.	Avoiding the focus only on quantitative measures. The qualitative assessments are also there to provide valuable information	10%	30%	50%
CUSTOMER	Strengthening customer relationship	General Electric is a huge base for more than 100,000 jet engines, medical devices, locomotives that are long lived.  They are effective potential service for their income stream.	5%	20%	30%
Increasing customer retention.	Measuring Customer Retention Rate annually.	15%	20%	30%
Developing and using customer database.	Implementing Customer Satisfaction Score (CSAT)	10%	15%	20%
INTERNAL PROCESSES	Focusing on operations management to Increase community outreach.	Implementing community-level indicators. These are measures that indicate population groups instead of   individuals.	5%	8%	12%
Focusing on Technology Management. This is to Increase efficiencies with the use of wireless or any efficient virtual technology.	SeQuence BPM suite can be deployed. This is to provide management with various KPI dashboards. This must be done with intelligent. This is helpful to assure that every operational processes are within  control	10%	12%	15%
LEARNING	For the learning of people professionals are to be involved who can create success for customers.	Analyzing Critical Success Factors or CSF from overall Goals and Objectives.	8%	10%	12%
Providing training to develop the leadership abilities and potential.	Various KPIs for the present situation are knowledge retention and application,  measures of operational effectiveness and employee performance measures,	15%	20%	25%

To understand the case, sources of Gary Hamel is drawn here. Jeff Immelt’s strategy of management is compared with the predecessor Jack Welch. As far as temperament and style are considered, Mr. Welch and Mr. Immelt have remarkable contrasts. Mr. Immelt is an informal person. His outward style is easygoing. On the other hand, Mr. Welch has a coiled spring mind with a rapid-fire speech (Metcalfe 2016).

 Mr. Welch has done tough action to pursuit improved corporate performance. This is to fend off challenges Asian rivals. This has been primarily from Japan in the 1980s. The diversification has been moving to economy and broadcasting with the NBC. This has been partially to provide G.E. ballast and adding business that has been facing little and foreign competitions (Heald 2018). On the other hand, according to Mr. Immelt, the timing has been suitable to perform that. He called this a seller’s market. Further, the potential buyers have presumably thought otherwise and believed that the assets had been purchased from the capital of GE. This has been proved highly beneficial. However, GE has been found to be motivated through a strategy, instead of trying to fine-tune different timing of distinct assets of sales (Nastuk 2017). As observed by Mr. Immelt there has been a ridden capital present in up and down directions in due years. However, despite the present move, there have been investments in the financial resources and management in their popular high-tech industrial business. As per Mr. Immelt, the goal of a management team of GE has been to have investors. They have seen G.E. as an industrial company. This has been one with more growth, with fewer risks and more focused (Bruzgul et al. 2018).

In the present VUCA world, Mr. Immelt’s approach is more suitable. The leadership of Immelt has reoriented the concentration from shareholder to stakeholder. They have comprised of long-term vision and sustainability. This focus on innovation with the capability to understand the world-wide trends has been bringing scopes (Williams 2018). Moreover, he is found to trying to simplify the overall framework and increase the internal coordination and collaboration. The leadership has reflected on the “New Model of Leadership” of Grant. This is due to the capability of creating from networks, cooperation, enthusiasm, confidence and using information. These are the causes for Immelt to be seen as a smart manager under the VUCA world (Schwartz 2017).

As the former CEO, Mr, Immelt was questioned about the way in which GE has been to what has been on August 2017, he pointed out to various steps of the current leadership. These are deployed since the previous 16 years as the primary driver of the culture of the company. Here, the measures have involved emphasizing various disciplines and concentrate on multiple volatile times. This includes cultivation of belief over the way of transformation. This is seen as a present necessity (Su 2014). Thus they have maintained an unwavering commitment for making changes as there is any uncertainty. This has demonstrated resilience under the face of change in landscaped and diversifying workplaces with the deal with complicated challenges. Dr. Immelt has analyzed the action of leadership has been disruptive and unpredictable. This has been complicated to deploy in the chaotic scenario and clouded through vagueness. This is due to the constantly changing situations. Thus through “V” acronym is never put into place. Immelt has outlined the 6-point leadership traits that contained the semblance of VUCA. This has appeared to be operating in VUCA environments. This has been an integral part of GE culture (Taibi, del Valle and Howells 2018). Further, as the news of the departure of Immelt hit the scenario, a stock of GE spiked by more than five percent. This was found to be down about ten percent YTD over 50% in the previous years.

Conclusion:

The above study has discussed various characteristics of change and innovations considering General Electric Company as the case study. The corporations have been mostly challenging business scenario by the customer satisfaction and competitors. These advanced force under the aspect of globalization and technology have allowed various corporations. This also includes individuals to use their skills of leadership and abilities of creativity. This is to innovate latest services and products. Further, there are new ways to present and perceive things. Here, the change and needs in socio-environmental expectations have led to GE Company. This is to work through imagining through various challenges. These are changed to different weaknesses and opportunities into high strengths. The study has shown how innovation had been the game to play in remaining sustainable and prosperous under the present marketplace for every industry. 

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