Strategic Analysis of General Electric Company

This report analyses the strategic planning and operations of General Electric Company using various strategic analysis tools such as BCG matrix, product portfolio analysis, and supply chain analysis. It also provides recommendations for improvement and expansion of the market for retaining back its shares in the global market.

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Executive summary
The subsequent report tries to analyse the different dimensions of strategic planning and
operations that are used by the General electric Company for increasing the share in market
thereby reducing the risk pertaining to involvement in different areas of supply chain and
strategic management. In this context, the report highlights application of several sets of
strategic analysis tools such as BCC matrix, product portfolio analysis, and supply chain
analysis for understanding the changing dynamics of the industry in relations to operation. At
the end of the report, the study concludes by giving out suggestive recommendation for the
improvement of process and expansion of the market for retaining back its shares in the
global market.

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Table of Contents
Introduction................................................................................................................................3
Overview of the company..........................................................................................................3
Critical evaluation of supply chain management of the company.............................................4
Inventory planning..................................................................................................................5
Logistics operations................................................................................................................5
Value chain collaboration.......................................................................................................6
Critical evaluation of the product portfolio mix........................................................................6
Critical analysis of the KEY future direction for strategic development’.................................7
Recommendations....................................................................................................................10
Conclusion................................................................................................................................11
Reference list............................................................................................................................13

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Introduction
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.
Overview of the company
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

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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).
Critical evaluation of supply chain management of the company
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.

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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.
Inventory planning
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.
Logistics operations
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

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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).
Value chain collaboration
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.
Critical evaluation of the product portfolio mix
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

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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.

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Figure 1: BCG Matrix
(Source: Chang and Taylor 2016)
Critical analysis of the KEY future direction for strategic development’
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.

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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,

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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

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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.
Recommendations
 It has been found that the company has charges of conducting economic espionage
and making an effort to steal the trade secrets from many US aviation and aerospace
organisation (The Guardian. 2018). Therefore, in order to address these charges and
issues. As a result which the company’s share price has started to drive down to
nearly 60% (Bloomberg.com. 2018). Therefore, in order to address this issue the
company focus on increasing their products in to double-digit growth rates.
 The company is required to expand their international operation in both the growing
and developing economy along with up gradation of the products manufacturing base.

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This would help the company, not only increase their customer base and productivity,
but also will help in retaining back the lost popularity of the company.
 The company needs to increase their degree of penetration in the growing market
specifically in the Asian economy. Along with this, the company needs to increase
their operation of General Electric renewable energy segment for taking the advantage
of the growth in the energy market. The company needs to eventually diversify the
existing industry segment within the company where digitalisation of the technology
is effectively necessary.
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

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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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