General Electric Analysis of General Electric external environment Evaluation of value chain GE has continuedto be profitable through innovative solutions such as ecomaginition and healthymaginiton (Whitfield, 2006). Also, the company has continued to invest in GE facilities overseas to facilitate growth, for instance, it has invested more than 1.4 billion per year in green technology. GE also uses its size to buy out its competitors and diversify in products.
Evaluation of SWOT analysis
The strengths of GE have increased the company’s profitability index which is evident in the amount of dividends offered to the shareholders and the net growth in earning per share (Weil, 2007). However, the company has been faced by law suits and product recalls that affect customer confidence (About Sustainability at the BSR Conference, 2008).
GE aims at selecting suppliers with more competitive prices, services, and quality and provides relevant training (Immelt, Govindarajan &. Trimble, 2009). In order to remain competitive, GE requires the suppliers to have quality service, and to keep up with the latest technologies. On the other hand, supplier may use take advantage of these requirements their products. The buyers can also influence the profitability of existing enterprises through their ability to lower or increase prices on the products or service. Since GE is the leader in most industries, the bargaining power of the buyers is restricted due to the company great control (Zimmerman, 2010). Even though GE has diversified in various businesses, however, GE has a competitive advantage over other firms due to innovation. The entry barrier in the high-tech industries for new entrants is very high. Thus, it decreases the threats of a new firm, for this reason, risk of replacement is also lower Immelt Talks.
GE’s current level of diversification
Jeff Immelt oriented leadership has changed the internal environment of GE with a lot of positive feedback from the staff (Kenny, 2009). His approach is based on long-term profit growth. This strategy utilizes three stakeholders’ strategic elements such as managing strong trading patterns, increasing growth efforts, and increasing business portfolio (Kaye &.Yuwono, 2003). This strategy is based on several factors including customer focus, globalization, growth platforms, technical leadership, and services.
GE has currently diversified in various segments including aviation, energy infrastructure, transportation, home and business appliances, healthcare, and GE capital. Diversification has allowed the company to have stock for the long-term. Each of GEs segment provides valuable solutions as well as products to the global economy (General Electric, 2012a and General Electric, 2012b) The Energy sector produces oil and gas, electric equipment, generators, nuclear reactors, and so on. The Aviation section consists of jet engines and aerospace products. Healthcare division provides medical research, medical equipment, and pharmaceutical technologies. The Transportation segment offers transport technologies in railroad, marine industries, and mining. The Home and Business sector provides lighting appliances, hardware, and software (Holmes, 2007). Lastly, the GE Capital segment offers loans, credit cards, leases, and other products.
Diversification strategy has proved to be not only a source of the company’s competitive advantage but also a barrier to entry Aron (2011), Bartlett (2006), Franke et al (2003) and Grant (2008). Currently, GE is the only company that has the capabilities to build a nuclear power plant by using installed proprietary technology. In health care, GE has also forged leadership position through its research and development in health sciences including nuclear medicine, molecular imaging, and 3D visualization. The company also uses the most comprehensive smart grid solution for energy distribution to supporting utilities.
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