The significance of strategic analysis for the organisation is trending in the country due to the high increase in the competitive environment of business. Therefore, strategic analysis of the company is necessary for understanding the ambition and target potential of the industry. In this context, strategic analysis is considered the objective evaluation and understanding of the present market situation of the organisation along with the incurred cost and competencies that develops base for the establishment of the company. Based on this the study highlights the critical evaluation of the strategic supply chain management, product portfolio mix and major future direction for the strategic development of the General electric company. Based on the challenges faced by the company the study also presents appropriate recommendations for the company for improving its outstanding position within the global market.
General Electric is a leading organisation that operates on providing high technological services and brands in collaboration with various business operations over eight different business segments consisting of power, aviation, healthcare, transportation, capital, energy relationship and lightening related activities. However, general electric has managed to push their activities in all the areas of operation for creating strong competitive benefit and in generating high profits (Ge.com. 2018). In the year 2017, the company showed a high rise in the revenue amount in their oil and gas sectors. Other areas as well accomplished strong economical results including branch of aviation, renewable energy and healthcare sectors.
On the contrary, there was a slowdown in the performance across few of the business segments of the company. The overall revenue and productivity of the company saw a minor decline in the year 2017, in comparison to the prior year. However, the company still managed to sustain its monetary performance very well over the period. In this context, United States remains the most potential market for general electric. In the year 2017, the company employed almost 313,000 employees in their combined affiliated branches amongst which 106,000 were employed in US (MarketWatch 2018).
The objectives of the operational management within the supply chain areas is to streamline the operational processes for bringing cost efficiency and to sustain a stable business collaboration with their suppliers. However, the functional strategies that are applied in these areas are contributed to the competitive strength of the General Electric that are essential for addressing the competitive rivalry influencing the global business. In order to address this issue General electric offers digital technological services for enhancing the decision-making activities of the suppliers and increase the reliability of the GE’s supply chain (Gereffi 2014). Moreover, the organisation’s program of supplier diversity helps them to reduce the risk of overdependence on just one of the suppliers. Along with it the streamlining of operation are accomplished through the digital technologies that are similar, to which the general electric offers the customers in the renewable energy segment. By applying these strategies, the supply chain managers focus on the external trend that affects the partnership affiliation of the company (Timmer et al. 2014). For instance, the company utilise the advanced technologies for increasing its productivity and for retaining its customers.
Inbound logistics: General Electric has a big supply chain that contains suppliers received from various countries. The company also have suppliers that stored at different warehouse across various regions.
Operations: General Electric has different operations functioned across 130 and over countries. However, the company has different websites for all its separated markets and has regional offices located across the world (Gereffi and Lee 2016).
Outbound logistic: In this year 2016, the company planned to provide outsource of their warehousing activities. Therefore, presently the company focuses on the management of supply chain in a rigorous way for utilising the standard technology and reduce the pressures of the inventory.
Marketing and sales: The company has retained high focus on the marketing and operations of sales that well renounced for spending high on the advertising in their past.
The strategic decision making areas of functions deals with the planning of inventory in the supply chain process. The objective of this is to manage the sufficient inventory for the sake of business. However, general Electric operation management utilises online digital equipment’s for handling the inventory system. For instance, they uses the centralised system in their conglomerate for maintaining the inventory throughout its electric lighting segments operations. As stated by Fahimnia et al. (2015), this system helps to automate several components of the inventory management and allow the company to enhance the productivity through the operational effectiveness. Therefore, the technological equipment’s characterises the General electric’s approach in this area of decision.
In case of logistic operation, General Electric utilises the method of job shop in majority of their production centres where they use turbines, locomotives and other large tools. However, the company mostly uses automation at their centres where small tools such as solar panels are manufactures (Gereffi 2018). General electric is in its third year of general electric benefits through its process improvement program. In this context, the duty if the team members within the department of logistic is to enhance the 40 large process within the company. Results in this includes almost 80% of the reuse system, a six-month reduction in the product life cycle and 35% of the reduction in the sole source suppliers (Govindan et al. 2015).
However, since General electric is based of industrial operation, the company is dependent on the third party suppliers for their raw materials, parts and components used in their products. Their dependence exposes the fluctuations of General electric in relation to their prices and accessibility of their materials, components. However, issues associated with the quality encounter by the third party can influence the standards and effectiveness of the general electric products and service (Yeung and Coe 2014).
General Electric has an supplier accountability principles where it maintain one on one relationship with the suppliers and works with them to mitigate the issues, in addition to this general electrics, supplier relationship policy asserts that the company is the only source from the suppliers that complies with the regional law and applicable standards of the company. In this context, the company has numerous collaboration for preventing the ability to deliver products and increase the revenue of sales (Serra and Kunc 2015). However, the company is now seeking to obtain more control over their supply chain after the disruptions owing to nature disasters such as volcanic disruptions, flooding, and unbalanced negotiation.
Portfolio analysis has a major contribution in communicating the issues of the company’s strategic planning. These techniques are those that can be found in many different variations, which are established to satisfy the growing needs of the centralised decision about the crucial strategic factors present within the Industrial Company. As stated by Onat et al. (2015), The major benefits of the techniques are seen to provide the way of comparing several business practices in comparison to each other by developing the priorities and in deciding in between the winners and the losers. Large companies such as General Electric may have complicated condition in various activities and many of their strategic business units. For evaluating this strategic business portfolio analysis is necessary for optimising the strategic decisions of the managers.
General electric company has six major units of business where it operates its business in segments such as Power, renewable energy, oil and gas, and management of energy along with healthcare, transportation and finance industry. Therefore, its oil and gas, energy management, power and renewable energy business can be considered as the stars in the product portfolio mix whereas the SBU, segment of General electric can be considered as the question mark. The technological segment can be considered to be the sources of income as they generate a huge amount of money and healthcare segment as the dogs. Therefore, it can be said that the company has turned its business high in the aggressive economy where their division manager’s acts like small owners of business who are highly well concerned about the needs of the customers (Chang and Taylor 2016). This type of product diversification help the company to share its core competencies that consisted of shared knowledge, patents, resources and skilled labours that common ins various business.
It has been seen from various study that one of the major reason for the success of the company, is General Electric’s commitment towards the innovation of product. Aslani and Wong (2014) suggest that the strategic development with the ROA framework motivates the managers of the company to show concerns about the impact of the uncertainty on the performance of the organisation and offers them with method to deal with the situation of uncertainty. In this context, the major future directions for strategic development is their decision of incomparable diversification that is considered to be the series of concerted RO. In this, the opportunities of investment rate in these accomplished investment decision.
In this regards, the following Strategic development options are:
Development of the market: In this, the most notable fact that is associated with the product and services is to deliver the products in the emerging markets. According to the estimation of key future direction, Indian Natural resources is the new emerging market, with different products and services consisting of gas turbines and related generators along with the existing products (Leydesdorff et al. 2016). Therefore, general electric can serve in the Indian sectors of energy that would help them to develop and deploy the technology for effectively using the natural resources. Applying this method of strategic development General electric company can enter within the new market using their existing product thereby opening up additional geographic markets through local, national as well as global expansion.
The major criteria against the strategic direction of general electric can be noted in the existence of gad and requirement of increased power generating capacity for large load centres that is growing in the market. According to Barrick et al. (2015), this helps to improve the opportunity for the company to invest in the highly effective gas turbines in the Indian average sized power generators owing to its size of the output. Therefore, by developing its market, the company can create competitive benefits by delivering innovative and emerging performance in the combined power plants and on the concentrated applications. However, as the first time mover in to the niche market, GE obtain and high benefits over their competitors for its presence of innovative gas turbines. In this context, if the competition is released, the products that compensates for the shortcomings of the company could influence the international brand.
The general Electric Company can hence build a partnership with the Samantha organisation located in India, as it would provide the company to share the knowledge, provided with an increase share in the market and increased investment in the reproach and development. Moreover, this could result in the delivering a better quality of products and services for the consumers but could grow the chances of cultural conflict. As the power generator in India has been estimated to increase in the near future. The development of power project that totals up to over 3000 megawatts of thermal gas and wind energy sources that could result in the minimisation of risk and increase of potential high returns (Ge.com 2018). Therefore, there are higher chances of the shareholders to prefer long-term investment.
Development of product: This option consist of development of new products for the expansion of the present market that can meet the proximity of the consumer’s requirements and outperform the products from the growing competitors. According to the assumption for the new street direction, flash pad, a new wireless detector that functions with ultra-wideband connection can be used as new product for the existing market (Ahl and Nelson 2015). This is because the launch of the product in the year 2012 has reported a higher income rate in the environment of healthcare thereby aiming to streamline the x-ray department while managing the satisfaction of the customers (Chang 2016). Therefore, if this product is utilized in an effective way, it may be used as a substitute for the regular used X-ray tool and has the capability to retain more customers and profitability of the company.
According to Greenbaum (2017), analysis of the competitors shows that the company has several rivals such as Siemen’s healthcare, Hitachi Medical, Philips, Toshiba process that could deliver similar products. Therefore, by selecting such strategy for developing digital radiography technique could competitive advantage for the General Electric Company. The sector of US healthcare according to report of the survey has managed to increase its entire expenditure of healthcare from $738 million to $1,097.9 billion in the year 2012 that is likely to increase in the year 2018 (Bloomberg.com. 2018). Therefore, this could create a differentiating and positive outlook for x-ray market in the demographic regions of USA where the company has a high presence.
Since flash pad is first driver in the existing market, it provides a competitive benefit to work with increased equipment, that helps the patients imaging faster than the computed radiography and shows dependable data with ultra-wideband connectivity. According to Lindsay et al. (2014), The value activities of general electric company shows that the company has robust capabilities of R&D that has helped the company in establishing, more effective innovative and differentiated products in the market. Therefore, the healthcare segments of the company needs to invest more on the development of product. These would help in the increase in sales of the company provided with innovative products of healthcare that could increase the costumer’s choice in the healthcare goods (Doherty et al. 2014). Hence, the acceptability of the company is that the primary investment for this kind of option could be high and profitable for a sustainable period that could help to reduce the related financial risk of the company.
Conclusion
Therefore, it evident from the study that the company has increased its business by highly investing in the emerging business and technologies. Therefore, the standard and string technological competencies have allowed them to accomplish faster growth despite of its focus on innovation. It is evident from the portfolio product analysis that the company has a huge and strong business and product portfolio that supported the company to deal with new challenges and to achieve superior growth in business. Its international footprint and financial strength have also helps the company to ensure the sustainability of the business in relations to its upcoming challenges.
The most important thing about the strategic supply chain operations of the company is that the company has strong backlog processes. Moreover, the company is highly working for empowering its existence across various major markets and different business fields. It is evident that over 60% of the productivity revenue comes from outside United States. From the product portfolio it has been seen that all the four segments of General electric is classified in to different marketing segments that provides that highly competitor advantage and has helped the company in internationally increasing its smart strategy and extraordinary competencies. However, it has also been seen that, in the year 2017, the company market share declines than the expected results and therefore, the company is required to focus on the particular areas for reducing the fluctuations across various segments of business. The portfolio of the company has exposed potential changes within a period of year’s reporting a level of changes that company had to face. They are also required to address the issues of global expansion in India and Asian market for increased product popularity and for increasing the share in the global and regional market.
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