Competitive Strategy Analysis & Case Studies

This assignment delves into the concept of competitive strategy, examining its application across diverse business scenarios. It requires an in-depth analysis of various competitive strategy frameworks, exemplified by McKinsey's 7S model. Students are tasked with applying these models to real-world case studies, drawing insights from companies like GE and assessing their effectiveness in navigating market complexities.

GE Case Study

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Manner in which Jeff Immelt redirected the strategy of GE..................................................1
TASK 2............................................................................................................................................2
a. The requirement of 21st century business environment.....................................................2
b. GE's resources and capabilities..........................................................................................4
TASK 3............................................................................................................................................5
What organizational changes has the new strategy necessitated? Will GE be able to
successfully execute the new strategy?..................................................................................5
TASK 4............................................................................................................................................8
What alternative strategies should GE consider?...................................................................8
CONCLUSION:...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategies are usually formulated by the top management of organisation so that
the organisation can sustain in competitive environment. These strategies are formulated with the
motive to enhance the performance of business and reduce the impact of external forces that
drags business down (Finnegan, 2017). In accordance with this context, the present report will
demonstrate the understanding about impact of strategy formulated by CEO of GE (General
Electric) Jeff Immelt on the organisation. Whether the strategies aligned with other elements of
the organisation or not is going to be assess in this report. Current resources and capabilities of
the organisation will be identify in the assignment. (Clauser and Ewert 2017).
TASK 1
Manner in which Jeff Immelt redirected the strategy of GE
After becoming Chief Executive Office of GE in 2001, Jeff Immelt has faced numerous
challenges which includes attacks of 9/11, subsequent increase in high profile corporate scandals,
increase in competition and global financial crisis of 2007 – 2008. After analysing those
challenges and issues, he realised that there is need to bring transformation in the organisation so
that they can sustain in the market (Gao, Schlosser and Morgan 2018). He diverted
organisational focus from cost cutting and introducing new products, services and market to
organic growth, customer centred and innovation. Immelt concentrated on redirecting the
strategy of General Electric so that impact of external challenges can be reduced and
organisation can provide products and services according to the global trends. GE divested
electrical engineering business. In 2002, Jeff got committed towards increasing the organic
growth rate of 8% per year. He identified numerous global trends which includes ageing
population, increase in demand of sustainable energy and products, needs to improve
infrastructural facilities and opportunities in the emerging market. For example, Jeff proposed
that attitudes on globalisation have been transforming rapidly and GE remain agile to move on
their own.
By taking advantage of core competencies of General Electric, Jeff Immelt aim to
establish values of customers (Singh, 2015). The core competencies of General Electric
identified by Jeff was use of advance technologies, delivering excellent and first class services to
the customers, providing products that increases sustainability, customised products and potential
for high growth market. Jeff implemented growth strategy in the organisation in order to assess
1

the needs and expectations of the customers and to maximise the growth of organisation. His
idea of growth strategy focuses on two areas which were either improve or enhance the existing
business facility or establishing new business for commercial area. Through identifying a new
growth platform, it would then be executed through a series of divestment and strategic
acquisitions in sectors with high growth potential. Jeff Identified that technology was considered
as key element which can drive GE towards sustainable growth and development (Boldea and
Nasar, 2016). In order to enhance the growth, management needs to implement and make use of
new and innovative technologies, that can reduce the efforts of management and enhance the
performance of the employees. Thus, GE immediately expanded its research and development
department and provided it with adequate financial banking. Customer Focus Initiative has been
considered as vital implementation of Immelt's growth strategy. This lead to the revitalisation of
GE's marketing functions most notably through establishment of GE's commercial Council and
number of programmes which were customer oriented (Haran and Rajashekara, 2017).
Customer centred approach became Immelt's value creation strategies. Through this, the
management were able to provide customised and sustainable products and services to the
customers that eventually benefits the organisation and they were able to sustain in the
competitive environment (Madsen and Walker, 2015). The strategy was focusing on providing
different types of innovative products and services which were merely focuses on the needs and
expectations of the customers. (Qolipour, Mostafaeipour and Tousi, 2017) With the help of good
decision the company is able to develop the innovation and core competencies framework so that
profitability of the firm can be enhanced in the effective manner.
TASK 2
GE strategy aligned with:
a. The requirement of 21st century business environment
In order to assess the requirement of 21st century business environment, PESTLE-C
model will be implemented. The model is used to analyse external environment along with the
competitor positions. In this context, the conclusion will be made that demonstrates whether
Immelt's growth strategy has addressed the requirements or not. The description of PESTLE – C
model is described below: Political Factor: Political factors influences the organisational growth and development.
These are the governmental activities that affects the operations of organisation greatly.
2

In this point, the governmental decision, policies or regulations that affects the business
process of GE will be identified (Muñoz-Villamizar, Montoya-Torres and Faulin, 2017)
Government has laid more emphasis and support for digitisation of industries. This
opportunity acquired by Jeff Immelt where he focuses on using digital and innovative
technologies in order to enhance the productivity and profitability of the organisation.
Government of United States was focusing on using renewable source of energy to
enhance the protection of environment. (Gamble and Thompson, 2014). Economic Factor: With the shock wave of global financial crisis in 2007 – 2008, many
business giants got dissolved impacting on the growth environment of the country. This
kind of the change affect the growth of the company in the large manner. In this manner
the firm is need to undertake its business activities in the efficient manner (Finnegan,
2017). The growth strategy is very helpful in order to have economic development of the
country. With the help of this the business is able to expand its business activities and
there can be larger amount of the contribution with the help of this the various kind of the
initiative can be taken which will help to build the image of the firm. Social Factor: Social factors involves the taste and preferences of society and
communities residing in the country. Customers are key components of the organisation
and they are the only one who can either lead the organisation towards growth and
development or can drag them down towards dissolution (Clauser and Ewert, 2017).
There was drastic change in the taste and preferences of customers when Jeff Immelt's
become the CEO of GE. Customers prefer more green lifestyle and popularity of using
renewable source of energy among customers were at peak. After analysing the situation,
Jeff Immelt implemented Customer Focus Initiative where he has given emphasis to
needs and expectations of customers. Immelt move to innovate medical equipment in
order to reduce issues of ageing population. Technological Factor: In order to expand the growth of the business it is very essential
to use the equipment of the updated technology. By using good technical they can able to
take the innovation procedure and this kind of the activity will be helpful in relation to
develop the firm position in the market (Gao, Schlosser and Morgan 2018). This factor
will be helpful in order to enhance the profitability and productivity of the firm in the
market. In this manner the firm is need to make more amount of investment in buying
3

technological products' so that there can be increment in the using of the modern
equipment. (Sagwa, K’Obonyo and Martin, 2015). Legal Factor: Management of GE needs to consider on laws concerning CO2 emission
and other harmful substances they emitted in the environment (Girardi, Gargiulo and
Brambilla, 2015). In order to prevent legal consequence it is essential for GE to focus on
core laws such as Data protection, consumer health and safety, environmental protection
and employment rights. The legal change in the firm is very useful in order to attract the
large number of the customer in the market. Environmental Factor: Ecological macro-environmental factors affect General Electric
Company and its industry environment in terms of natural resources used in business.
Increase in level of pollution, scarcity of natural resources, inadequate use of renewable
source of energy were some of environmental factors that affects the company's policies
and practices (Singh, 2015) In order to protect the environment, Immelt's laid emphasis
on using renewable source of energy and recyclable materials in his growth strategy.
 Competitors: The major competitor of General Electric was Siemens, 3M (MMM),
Hitachi (HIT) and United Technologies. Increase in competition impact on the
profitability of the organisation. Immelt's taking advantages of core competencies
formulated strategy where he focuses on customers needs and expectations and uses
advanced technologies in order to gain competitive advantage (Morgan and Strong
2015.).
b. GE's resources and capabilities
GE is effectively able to manage its resources and systems in recent times. This has
enabled them to grow and develop successfully. They have adopted business environment and
portfolio to make implement innovation. Management have developed strategies to implement
changes so that emphasis can be lead on innovating technology. They have invested a huge
amount in research and development. This has increased their potential to drive sales. It has
created over $ 100 million in sales in past three years. This has changed their products quality
and they are able to develop new products ( Boldea and Nasar, 2016).
Immelt's said that GE is able to change its global strategic decisions. This is because with
innovation they have identified their opportunities and threats. GE has understood internal
factors that are affecting their growth. They have imposed strict barriers by applying technical
4

leadership. In this leaders take decisions on the basis of innovation (Acquaah, Amoako-Gyampah
and Jayaram, 2016). Their leadership style followed have motivated employees to adopt change.
Employees have created a creative environment and achieved goals in effective manner. This can
be observed by analysing the following example- GE is only company in US that has capabilities
to build nuclear plant. This is the proof of GE ability to implement innovation effectively. It has
transformed GE business to grow and develop (Haran and Rajashekara, 2017).
Thus, it is concluded that GE have effective human resource, finance and infrastructure
so that strategy can be implemented. This has made them to take effective decisions. So
company is able to manage its resources and employees. (Parnell, Long and Lester, 2015).
TASK 3
What organizational changes has the new strategy necessitated? Will GE be able to successfully
execute the new strategy?
There was a huge change in GE structure and systems. Immelt,s new strategy focused on
new growth areas and improving efficiency of organisation. The company units were divided
into smaller sector so that each sector focused on specific area. After that 5 sectors were
developed according to factors f market leadership, scale, etc. Their markets were technology,
healthcare, infrastructure, etc. These all were interrelated to each other. GE focused on customer
satisfaction by improving its marketing strategy. Research was conducted to analyse customer
attitude and satisfaction level (Qolipour, Mostafaeipour and Tousi, 2017).Managers focused on
customers demands rather than business operations. Immelt' s redesigned the portfolio via
growth platforms. This lead to further opportunities to grow in multiple sectors. GE complexity
was increased as individual performance was difficult to measure. Moreover, GE goals and
objectives was changed as it they were now focusing on enterprise selling rather than cross
selling.
As emphasis was on customer satisfaction, this caused marketing department to identify
opportunities rather than on business operations. It can be observed by taking example of GE
medical. New business were acquired that made structure more complex.
Yes GE will successfully execute this strategy effectively that focus on customer and
technology. In 21st century it is important to identify needs of customers so that products can be
produced to satisfy those needs (Muñoz-Villamizar, Montoya-Torres, and Faulin, 2017). GE
must reduce its organisational structure in order to execute that strategy. For this, they can
5

develop incentive policy so that employee can be motivated. This will help in integrating efforts
of enterprise and employees. As GE strategy is focused on innovation they can meet customer
demands by developing new products. They can implement conglomerate business model to
maintain their efficiency.
Besides this, there are certain disadvantages that must be considered by GE while
implementing strategy. First of all that it will break company core competencies from the global
market. It will highly affect them as they will not be able to compete in the market. Also, it will
reduce their market share and sales (Lee, Yoo and Kim, 2016).
On critical evaluation, it is analysed that some changes are required in strategies due to
dynamic environmental factors and flexible market structure. However, it is related with
managing entire business operations and providing goods and services according to customers'
requirements. Including this, changes in people's attitude, interest towards goods and services
impact on demand for products and services of GE adversely.
Mckinsey7's model- It is a tool that analyse firms organisational design by looking at its internal
key elements. It consists of various elements as follows:-
6
Illustration 1: Mckinsey 7's model

Strategy- It shows that how GE strategy focus on. These strategies are developed by
management by considering the change in market condition and ability of organisation.
Staff- It is related to workforce that shows what type and how many employees are required by
GE to execute that strategy.
Systems- They are process or procedure that shows how GE will be able to implement strategy
and achieve goals and objectives.
Structure- It refers to units and division. It shows that how they will integrate their efforts and
how they will communicate with each other. What role and responsibilities of each department
will be.
Skills- It shows the ability of GE and its staff in performing duties. Also, what skills will be
needed by GE in their employees to execute strategy.
Style- It refers to way top management will manage and handle GE activities and operations.
Shared value- It is core of this model as it consists of norms and guidelines that reflects
employee behaviour.
TASK 4
What alternative strategies should GE consider?
As GE is a leading electrical company, the trust level of the customers would be
comparatively high than that of its competitors. Thus, they can opt for the development of the
better quality of highly innovative products to attract the customers. Besides this, the effective
usage of the approach of differentiation leadership. It will help the company to develop more
innovative and unique product as compared to its competitors. This will attract the higher
number of competitors and will help in the better fulfillment of the different operations that helps
in the significant rise in the productivity and profitability of the company. The developing the
range of the new and high quality, innovative product will help in the better handling of the
innovation that helps in the better management that leads to the effective rise in the operational
efficiency of the company. Other than this, the innovative and unique product line will provide a
competitive advantage to the company over its rivals (Chen, C.M. And et.al. 2016.). The
customers will prefer the products of GE over the other brand due to the development of the high
quality product and services that help in the better management of the various operations that
help in the significant rise n the various operations and giving the better satisfaction level to
clients and customers. Besides this, the better execution of the various operations will see
7

through the rise in the productivity, leading to the improvement of the revenue generation of the
company. The better revenue generation process will help in the better return of investments to
the stakeholders of the cited business entity.
Also, the cited business firm will look after the better management of the different
operations that will help in the significant development of the operations of the company. Other
than this, the better handling of the cost leadership which includes the providing of the high
quality electrical product on the significantly low cost. This will attract the large number of
customers and help them to get a market advantage over its competitors. The customers will also
consider the availability of the high quality product or service from the cited business firm on the
considerable low price and will opt for the products and services of GE. (Lee, Yoo and Kim,
2016). The better cost advantage will help in the effective rise in the profitability and revenue
generation that helps in the better execution of the various business operations leading to the rise
in better brand value and effectiveness of the operations in the company. This also helps in the
better handling of the needs and demands of the customers and providing them with high quality,
innovative, etc.
Other than this, the business firm will look after the better management of the various
approaches that will lead to the sustainable development in the cited firm. This will help in the
rise in productivity and profitability which will support the better improvement in the business
processes of the organization. This will help GE to execute its business operations in a long run
and provide better ROI to its stakeholders.
Apart from this, The GE electrical will also look after the opting of the greener and
cleaner alternatives of the electrical products that will help in the better management of the
various operations which will see through the effective handling of the different operations
If GE will opt to break down, it will cause a financial instability in the organization that
will impact its revenue generation. Besides this, it will create a communication gap for the
organization and will impact its overall productivity and customer satisfaction level.
CONCLUSION:
This case study highlights how GE has been growing very rapidly in such a competitive
environment. It shows how they have successfully implemented change by developing strategies.
Jeff Immelt has faced numerous challenges. In order to assess the requirement of 21st century
business environment, PESTLE-C model will be implemented. The conclusion will be made that
8

demonstrates whether Immelt's growth strategy has addressed the requirements or not. GE is
effectively able to manage its resources and systems in recent times. This has enabled them to
grow and develop successfully. Immelt,s new strategy focused on new growth areas and
improving efficiency of organisation.
9

REFERENCES
Books and Journals :
Acquaah, M., Amoako-Gyampah, K. and Jayaram, J., 2016. human resource Management and
Market Orientation Strategies in Family and Non-family Firms in Ghana: how Do they relate
to Competitive Strategy and Firm performance?. In Family Businesses in Sub-Saharan
Africa (pp. 123-153). Palgrave Macmillan, New York.
Boldea, I. and Nasar, S.A., 2016. Electric drives. CRC press.
Chen, C.M. And et.al., 2016. Do competitive strategy effects vary across hotel industry
cycles?. International Journal of Hospitality Management. 54. pp.104-106.
Clauser, C. and Ewert, M., 2017. The renewables cost challenge: Levelized cost of geothermal
electric energy compared to other sources of primary energy–Review and case
study. Renewable and Sustainable Energy Reviews.
Finnegan, C., 2017. General Electric: A Case Study in Support of Flexible Work
Arrangements (Doctoral dissertation, Bernard M. Baruch College).
Gamble, J. and Thompson, A.A., 2014. Essentials of strategic management. Irwin Mcgraw-Hill.
Gao, X., Schlosser, C.A. and Morgan, E.R., 2018. Potential impacts of climate warming and
increased summer heat stress on the electric grid: a case study for a large power transformer
(LPT) in the Northeast United States. Climatic Change.147(1-2). pp.107-118.
Haran, K.S. and Rajashekara, K., 2017. Challenges of high power machine and drives for turbo-
electric aircraft and a case study. Newsletter, 2017.
Lee, S., Yoo, S. and Kim, D., 2016. When is servitization a profitable competitive
strategy?. International Journal of Production Economics. 173. pp.43-53.
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Morgan, R.E. and Strong, C.A., 2015. Competitive Strategy and Market Orientation: The
Relationship and its Implications. In Proceedings of the 1998 Academy of Marketing Science
(AMS) Annual Conference (pp. 232-232). Springer, Cham.
Muñoz-Villamizar, A., Montoya-Torres, J.R. and Faulin, J., 2017. Impact of the use of electric
vehicles in collaborative urban transport networks: A case study. Transportation Research
Part D: Transport and Environment.50. pp.40-54.
10

Parnell, J.A., Long, Z. and Lester, D., 2015. Competitive strategy, capabilities and uncertainty in
small and medium sized enterprises (SMEs) in China and the United States. Management
Decision. 53(2). pp.402-431.
Qolipour, M., Mostafaeipour, A. and Tousi, O.M., 2017. Techno-economic feasibility of a
photovoltaic-wind power plant construction for electric and hydrogen production: A case
study. Renewable and Sustainable Energy Reviews.78. pp.113-123.
Sagwa, E.V., K’Obonyo, P. and Martin, O., 2015. Joint and Individual Effects of Human
Resource Management Practices, Organizational Learning, Employee Outcomes and
Competitive Strategy on Performance of Firms Listed on the Nairobi Securities Exchange.
Singh, J., 2015. Overview of electric power potential of surplus agricultural biomass from
economic, social, environmental and technical perspective—A case study of
Punjab. Renewable and Sustainable Energy Reviews.42. pp.286-297.
Online :
Business strategy of GE, 2018. [online] Available Through: <https://lawaspect.com/business-
strategy-ge-21st-century/>
11