Opportunities are the external strategic factors which offer General Electric Company potential and ability to improve. These changes and initiatives are critical to ensuring sustainability in the growth of GE Company. The opportunities include the adoption of digital technology which is based on growth. This digital technology adoption and use present GE Company with an opportunity for further growth (Hill et al., 2014). The second opportunity is on the growth of renewable energy market. This presents the company with an opportunity to grow through the expansion of its renewable energy segment. Third, there is an opportunity for the growth of developing markets. These developing new markets go hand in hand with increased revenues for the company. There is also a growing demand for commercial airplanes as well as global acquisitions and buyouts which help to strengthen existing businesses.
Threats are the factors that limit or pose a challenge to a company's growth. General Electric Company's threats include stiff competition from its competitors in the market. Such competitors include 3M which is highly innovative and accessible. The second threat is disruption as a result of digital technologies. This threat is as a result of new technological tools that are more efficient to alert the dynamics of the market. Third, there is the variability in the oil and gas segment. This variability brings about instability which threatens the Company's revenues. There is also the threat of strict government policies and strategies on environmental regulation that can affect the operations of GE Company. The issue of fluctuations in currencies and increased security threats can cause issues in the global business (Hossain 2017).
When it comes to strengths, the company's diversified product portfolio consisting of motors, energy, healthcare, lighting, gas and oil, software, aviation and consumer electronics define GE Company. The company also has well-balanced revenue streams in its different sectors which help in spreading and reducing risks. GE Company is also hailed as one of the most innovative companies and the best to work in. More than 50% of GE's business operations are outside the United States. This has helped GE Company to have a balanced business revenue model.
On the side of weaknesses, the company's dependence on third parties for raw materials is of major concern. GE Company is a multinational company that is always targeted for litigation even for small matters that can easily be solved.
General Electric Company as a Differentiator
General Electric Company has applied differentiation in its generic strategy. Differentiation involves offering customers something unique and valuable that competitors don't have. GE Company has achieved differentiation in all its flagship products. This has made the company remain among the best-performing companies in the United States. Differentiation strategy has helped GE Company compete effectively and favorably in the global market (Bowen et al., 2015).
Blue ocean strategy refers to a situation where a company comes up with a new market segment that is uncontested. By so doing, the company makes its competitors irrelevant and creates new customer value and eventually decreases costs. General Electric Company has not adopted Blue Ocean strategy. GE Company believes in innovative strategies that formulate new products that give the company a competitive advantage over its competitors. That is why differentiation strategy is critical in GE Company.
How General Electric Company achieves competitive advantage
Competitive advantage refers to a circumstance or a condition that puts a company or a business organization in a better or superior position over its competitors in the market. Competitive advantage includes the attributes that allow an organization to outdo and outperform its competitors. A competitive advantage includes access to natural resources, high skilled labor, strategic geographic location, access to new technology and high entry barriers. General Electric Company is based on a generic strategy for competitive advantage that alongside its intensive growth strategies ensures the company's conglomerate growth in the larger global market. General Electric Company employs its competitive advantage in the oil and gas, energy, aviation, transportation, healthcare and in the electric lighting industries. GE's intensive growth strategies are used to support and maintain business growth. GE heavily relies on diversification as its major growth factor over the years. It is the combination of growth strategies adopted by GE that facilitates its continued growth despite the ever-changing economic conditions and the challenges brought about by competitors like 3M and Siemens (Banks et al., 2016).
General Electric Company has adopted Porter's Model in its Generic strategy. In this case, therefore, differentiation is the driving factor. In this strategy, GE's goal is to attract the target customers to products that are unique and special. General Electric Company achieves this uniqueness and specialty through research and development. In fact, GE Company is credited for its innovative research and development strategies. GE Company has advanced research and development approaches in aviation and healthcare industries. The company's investment in research has made it have the highest number of company-owned patents in the United States of America.
This generic competitive strategy has also made General Electric Company to offer its products to many market segments. By so doing, the company can maximize sales based on a larger customer base. This is a strategy that has played a critical role in GE's success for many years. Access to a wider market segment with many customers helps the company to have a notch over and above its competitors. This strategy of serving a wider market with access to many customers influences GE's other strategies in the business.
Another strategy used by GE Company to have a leading edge against its competitors is product development. This is the company's primary intensive growth strategy. This is achieved through development of new products that help in increasing the company's sales revenues. This strategy has helped the company stand out among its rivals in the aerospace, energy, oil and gas among other industries. The differentiation generic competitive strategy requires that development of products to follow and focus on product uniqueness. This therefore means that GE Company integrates cutting-edge technologies in every product that the company develops. This makes GE Company have a competitive advantage over and above its competitors.
General Electric Company has adopted a market penetration strategy that helps the company grow by increasing its customer base in the current market. This is achieved through marketing campaigns that are aimed at adding new customers and corresponding accounts. By so doing, General Electric Company is able to grow its revenue base despite competing forces. It is the generic strategy of differentiation that enables GE Company to succeed in implementing market penetration strategy. The competitive advantages of product uniqueness and use of advanced features that enable GE Company to penetrate the electric lighting, healthcare, and aerospace industries.
Are General Electric Company's operations impacted or guided by Technology?
The General Electric Company's operations are highly impacted and guided by technology. In the tear 2012, GE Company introduced the industrial internet. This technology transformed manufacturing by combining hardware, software, and analytics into systems that monitor, collect, exchange, examine and deliver insights. The company spent $1 billion for software centers in California, San Ramon, as well as hiring over 400 software engineers, tasked to develop and open a global network for the company's customers and business partners. The company recruited great leaders from across the high-tech world for this digital transformation. Currently, The Company has GE Digital Foundries in Paris, San Ramon, and Shanghai. These digital foundries help in bringing together talents in engineering, decision making, development, data science as well as for the business partners and customers to create new industrial internet applications.
GE operations run on an operating system called Predix. This system connects and powers industrial machines digitally, it also analyses data, and provides insights. The system also helps in improving the performance of GE operations, customers, and the ecosystem partners. There is an application that provides real-time forecasting to wind farms and another application that runs predictive analytics for oil and gas pipelines. When it comes to marketing, GE Company recruits talent that can speak, analyze and sell digitally. GE Company can also sell industrial parts and inventory in its digital industrial commerce capability through a variety of web channels. The company has also hired chief digital officers for each of its major businesses. This shows that the company is guided by technology in its day to day operations.
Has General Electric Company used mergers and Acquisitions?
There have been many mergers and acquisitions since the incorporation of GE Company. These include among others the acquisition of ShipExpress and GE Digital acquiring ServiceMax in 2016. In 2017, GE acquired Baker Hughes and merged it with GE Oil and Gas to form Baker Hughes a GE Company. In 2012, GE acquired Avio for $4.3billion. Another acquisition which was cleared by the European Commission was that involving the Danish rotor blade maker LM Wind Power.
General Electric Company uses diversification as its main strategy. Diversification is related when a company produces many different products that are related in some way to each other. GE Company employs its core competencies of innovation, globalization, technology and customer focus when producing its products. Even though GE products fall in different diverse markets, they all find a way in these core values. When a new product is created, the developers make sure that the product can apply to the GE technology and management expertise to grow the company. GE Company holds to the fact that related diversification strategies outperform unrelated diversification strategies. GE has for years continued to buy and sell businesses as well as operating sets of complex businesses (Halkos et al., 2016).
Integration is a strategy that is well employed by GE Company. The horizontal integration that involves gaining a broader reach by assimilating other businesses has been applied to GE Company. Horizontal integration involves the acquisition of additional business activities that are at the same level of the value chain. GE Company has achieved this through mergers and acquisitions. Acquiring a competitor helps to reduce the threat of competition. This helps the company to gain economies of scale by selling more and increasing its market power.
Does General Electric Company pay attention to Ethical and Environmental issues?
General Electric Company plays a major role in environmental management and conservation. The concerns and interests of stakeholders are included in the GE's approach to its corporate social responsibilities. These interests are very critical in the sense that they greatly impact on the company's brand and corporate image. The stakeholder's concerns on sustainability and resource management are well captured in GE's CSR strategy. GE's Ecomagination strategy is used to enhance resource productivity and minimize the environmental impact the company poses. GE Company has programs that offer sustainable operations in the oil...
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