Strategic Analysis of General Electric Report 2022

RUNNING HEAD: STRATEGIC ANALYSIS OF GENERAL ELECTRIC
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Strategic Analysis of General Electric
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Strategic Analysis of General Electric 1
Table of Contents
Introduction......................................................................................................................................3
Strategic analysis of General Electrics............................................................................................3
Resource Audit.............................................................................................................................5
Value Chain Analysis...................................................................................................................7
Product Portfolio..............................................................................................................................9
Future Strategic Growth................................................................................................................10
Conclusion & Recommendations..................................................................................................11
References......................................................................................................................................11

Strategic Analysis of General Electric 2
Introduction
The main aim of this report is to analyze the strategic position of a unit of General Electric (GE),
for that analysis, its Power Business is chosen. Multinational companies pushed their
management to use limited resources efficiently that started affecting the decisions of managers
in today’s business world. This report will analyze the value system, resources audit and product
portfolio of GE. With that analysis report also includes future alternatives available with the
company for growth. GE is a multinational company that deals in various products and service
and has a diversified portfolio. Each unit has its services and products and requires different
resources and that differ all the units in their performance and that leads to different future
opportunities and growth. The main problem with MNC’s is that they have a diversified portfolio
that makes it difficult for the investors to decide which one is the best portfolio amongst all the
portfolios. This report includes strategic analysis tool such as the BCG matrix to know the level
of attractiveness of GE-Power product folio of the company.
Lasserre (2017) identified three levels in competitive marketing that are; Strategic business unit
(SBU), functional level and corporate level. The below sections focuses on the SBUs of General
Electric and to know the competitive strategy used by the company information is taken from the
company sources and market news. Further information is taken from the articles and journals of
authors that give a brief view of the theoretical background of the company.
The structure of this report consists of a brief description of the strategic position of GE in the
market. Other sections focus on the evaluation of the company’s resources, values system, and
product portfolio within the SBU. At last, the report includes analysis of future directions and
growth opportunities available with the company followed by recommendations.
Strategic analysis of General Electrics
General Electric was founded in 1892 in New York and is a multinational company with various
business segment and offices across the world. Looking into the power division of the company,
the current strategy that they are using is based on technology advancement and delivering
technology-based services and products to capture the global market. Throughout the company

Strategic Analysis of General Electric 3
life and development stage under the leadership of Welch and Immelt's, GE has undergone
through various changes and that resultant in the development of potential competencies.
Further, the company improved its portfolio that leads to the growth of the company for the long
term. Under the leadership of Welch, the company took the decision of downsizing and that
resultant of efficient management and improved productivity (O'Boyle, 2011). Even after GE got
a new CEO in 2001, the company chooses to remain focused on these techniques for the success
of GE in the future. Kenny (2012) argued that General Electric becomes globally aggressive, the
reason behind this was the business unit system of the company where divisional business act as
a small business owner by understanding the desires and needs of the customers. The
diversification decision of the company leads to core competencies like increase in the number of
patents, resources, skilled labor and shared knowledge. General electric diversified its business
to China and India through building a good relationship that resulted in the improved brand
image of the company in these regions and affected the profitability and efficiency of the
company and that help in maintaining the consistency and customer satisfaction. In spite of the
above-mentioned situations, more factors contributed to the success of General Electric (Joseph
& Ocasio, 2012).
On the basis of the information given above, it will be analyzed that how the current strategy of
the company will work in future growth and development. It is noted by many authors that the
current strategy of GE will be successful in the current environment also in the global market
because of its use of advanced technology for product development which leads to a strong
image of GE in the global market or at the international platform. This helps the company to
become a leader in the market because of its continuous innovation that increases the sales of all
the products of the company in the global market. Further, the acquisition by GE with its six
sigma strategy leads to easier expansion of the company and maintenance of their services and
product quality. In a nutshell, on the basis of all the information discussed above the
competencies that the company developed leads to a strong foundation of strategic and financial
resources. As this report is based on the Power unit of General Electric, the discussion, and
analysis of the segment is discussed in further sections below (GE, 2016).

Strategic Analysis of General Electric 4
Resource Audit
Resource audit is a tool that is used to analyze the resources that the company has and how these
resources create value for the company in the long run (Jenkins & Williamson, 2015). This
section focuses on the capabilities of General Electric that are useful in the development of its
core competencies. These capabilities are discussed or analyzed using the value chain model.
This section of the report highlights the resources used by the company and how all these
resources create value in the process and products offered by General Electric.
1.) Human Resources and Talent Management: Power unit of General Electric employed
57,000 employees at present and all that are builds on the “General Electric Global Learning”
which shows that company focused on development and training of employees. This approach of
GE provides extraordinary talent to the company that brings a competitive advantage as this
makes the human resources competitive and knowledgeable. Besides this training program for
employees, the company changed its old process by hiring new talent that can contribute more
innovative ideas for the growth of the company. The training cost for the company is
approximately 1 billion dollars, this approach used by the General Electric is cheaper and prove
to be effective for developing a core competency and to improve the General Electric business
model (Power, 2019).
2.) Physical Resources: GE Power is the segment under General electric business segment and
is the best in water technologies and power generation using industrial applications and power
generations. The company on this segment developed various gas turbines which are considered
as the important resource for the company and the infrastructures that they developed help the
company to serve its customers in 140 countries (Power, 2019).
3.) Innovation and Technology: The main focus of the company is on innovation and
technology which leads to offering various innovative products to the customers. As the market
demand of these product increases the company invested in technological advancements, such as
process mapping, imagination initiatives, and employees retreats. All this innovation and
technological advancement helps the company to survive in this competitive environment. From
this company also benefitted the customers through its improved quality of products and

Strategic Analysis of General Electric 5
lowering its costs. Mainly, technology advancement and implication of artificial intelligence in
the processes brings competence in the financial area of the energy sector.
4.) Leadership: General Electric differentiates itself from other competitors on the basis of
leadership style; Immelt’s leadership style gave the new direction to the company culture and
environment. His transformational and motivational leadership style proved to be innovative and
that created a core competency and differentiates the company from its competitors. Under his
leadership, the focus was on third parties and investors that help in building a strong relationship
with external stakeholders of the company and that also yielded to customer loyalty. Further, to
maintain that core competency, he approached to internal as well as external stakeholders by his
environmental driven approach which resulted in cost competitiveness and efficiency in the
company’s operation. At last, his emotional intelligence approach to motivate employees leads to
a higher quality of management and that also considered as the core competency of the
company (Casey & Pearce, 2018).
5.) Diversified Portfolio and Customer Care: As stated in the above sections, the synergetic
strategy led to the growth of the company by focusing on diversified portfolios. Diversified
portfolio helped in understanding and fulfilling al the needs of the customers. And to further take
care of the customer wants GE deployed a “customer-oriented program”. This program created a
positive learning environment, and also focused on the level of productivity and improvement of
processes. This led to the development of new strategies such as “imagination at work” or
“Ecomagination” (General Electric 2019). Eventually, the company continuous investment in
technology and development of unique products helps the GE Power division to capture new
markets by divestment in other sectors or through merger and acquisitions. This strategy leads to
focus differentiation advantage and resultant in the production of advanced and innovative
services and products that directly improve the customer focus.

Strategic Analysis of General Electric 6
Value Chain Analysis
Figure 1 Value Chain Analysis for GE- Power
The above figure is based on the value analysis of GE Power division which includes primary
and supportive activities in the company. Primary activities include inbound logistics, operations,
outbound logistics, marketing and sales, and services.
Inbound Logistics: The inbound logistics of operations of General Electrics is large and
complex which consists of the supply of different kinds of raw material and in that energy, the
expense makes the huge share in their production cost. Add on advantage to them is their
sourcing techniques; the company’s suppliers are more efficient that help the company to gain
competitive advantage because of their efficient suppliers (GEPower, 2019).
Operations: GE- Power collaborates with PCI “Power Costs Inc.”, this is an independent
company that links energy operations to energy trading and provide software solutions for the
operation. Further operational costs that are incurred by the company include energy and
manufacturing salaries and invested more in research and development segment that help the
company to be a market leader using innovative techniques and maintain its position in the
market by delivering qualitative products to the customers.
Value Added less
cost=Profit Margin
Innovative Products and Services
Research and Development
Diversified Business Segment
Leadership Training
Inbound
Logistics
Six Sigma Quality
Acquisitions and Mergers
Operations
Outboun
d
Logistics
Outbound
Logistics
Marketing
and Sales
Services
Primary
Activities
Secondary
Activities

Strategic Analysis of General Electric 7
Outbound Logistics: General Electric contributed to the production of one-third of the world’s
electricity and that supports approximately 100,000 people. The innovative products offering of
the company made it easy for people to use power at an affordable cost. The main focus of the
GE-Power is on offering innovative services and products to the people through that they made
64% digital and efficient product offering to the people (GEReport, 2019). General Electric-
Power division do logistic planning with the help of “oracle transportation management”, it is a
web-based logistics management system that helps in organizing, planning, measuring and
executing the logistics management.
Marketing and Sales: The marketing strategy used by General Electric-Power is offline and
online channels to promote their products. The world largest contract was given to the company
(more than $ 3 billion) for the delivery of energy to Sonelgaz and Algeria. The company
promotes its products by diminishing pricing strategy and by using different promotion tactics.
Services: GE- Power focuses on the differentiation of products by using innovative technologies
and also focused on cost leadership, these strategies help the company to gain more customers
and new customer base. Customer Services that company offers to the customer as being a cost
leader in the market includes the offering of more diversified products and developing more
value in the products that bring differentiation as compared to other competitors in this segment.
The core competency of GE is its innovation and technology that helps the company in creating
customer satisfaction.
Supportive activities that contributed to the success of GE- Power are its innovative products, six
sigma approach, diversified business segment, leadership training, acquisitions, and research and
development segment. All these activities lead to potential competitive advantage or
development of core competencies.

Strategic Analysis of General Electric 8
Product Portfolio
The section focuses on the two variables to analyze the GE- SBU, using BCG matrix (Boston
Consulting Matrix). This tool is useful to identify the performance of different portfolios of the
company so that proper allocation of resources can be done. The matrix consists of two variables
that are Market growth and Market share.
Figure: 2 BCG Matrix of General Electric
GE-Power division is considered as the Star, as the segment focuses on continuous innovation
and technology advancement this will bring more cash flow to the company. It is analyzed that
the market growth of few GE segment is commendable and that segments are power and
aviation. GE-Power contributed most in revenues and profit of the company that includes 24% of
revenue generated and 28% of profit eared by the company comes from Power segment
(GEPower, 2018). The company will increase its investment in Power segment in future to
Question Mark
Large cash consumption or investment in the
product development due to growth requirement
(Transportation and Renewable Energy)
Star
Developed Segment and consumption of cash
for market growth and these products are the
main source of cash generation for the company
(Power, Aviation and HealthCare)
Dog
Product under this group nw=either
geberate any cash for the company nor
any cash is invested by the company in
these products
Cash Cow
Consistently genartion of Cash flow
because of large market share capture by
some products of the company
(Oil and Gas, Energy)
BCG Matrix
High
HighLow
Low
Market Share
Market Growth

Strategic Analysis of General Electric 9
increase its share in the market in other locations. In order to sustain this position by the GE –
Power segment it is recommended that company should focus on its key competencies that are
technology and product innovation and plus on the expansion and resource optimization that will
helpful in getting the more market share.
Future Strategic Growth
Looking into the future direction for General Electric-Power segment, from the above analysis it
is noted that the energy sector is growing because of digital technology that will enhance the
value chain of the company. It is analyzed from the above information that GE Power has
resources to enter into the new market. GE-Power deployed many innovative technologies and
implemented strategies for sustainable resources. Plans of GE- Power are that the company
becomes a supplier of the gas turbine to the Indian market. Through this step of the company, it
can be said that GE Power can capture the new market with its existing product portfolio.
Looking into the future opportunities, the demand of power and gas will be the more that create
an opportunity for the GE- Power to invest in gas turbines through that company get the
competitive advantage over its competitors. Innovative products and the use of technology by the
company will resultant in market growth and increase in market share. Concentrating on the
mergers and acquisition strategy of the company, General Electric- Power can go for mergers
with the companies that can bring an advantage to their segment as compared to other
competitors, the mergers and acquisitions help in getting market share and more investment
options for the company for their growth. Mergers help the company to get the domestic
knowledge about the market and that would improve the product and service quality offered to
the customers.
The overall strategy that can be adopted by the company for future growth is mainly to focus on
the adoption of new technologies and research and development. This includes the adoption of
 “Digital central generation” is a way to mix different sources of renewable energy and
fossil fuel. This will help increase the supply of power in the areas and that also ensure
reliability and affordability of the use of electricity using the power generation system.

Strategic Analysis of General Electric 10
 “Digital Grid”, helps in easy flow of energy that ensure a balance between demand and
supply of products in the market and this also transmit price signals and information in
real-time.
Digitalization in Power generation helps in adding value to the energy sector and for that
company has to hire skilled personnel and human resource that may increase the risk of data
security and leads to other technological challenges.
Conclusion & Recommendations
The conclusion that is made on the basis of the above analysis includes that Power division of
GE has the potential to add value in the company’s growth. It is concluded from the above
evidence and analysis that the company has strong technological and research strength that helps
GE in creating more valuable opportunities in the future. The analysis was done through the
value chain and resource audit to know GE power segment strengths and potentials. In today’s
scenario, most of the people don’t have easy access to electricity considering that it can be said
that demand of power will increase in near future and this will provide various opportunities to
the company to expand its market.
On the other hand, it is advisable to the company to adopt more technology in the operational
process and integrate technology with the operations. Due to that technological pressure
company might face many challenges but the implementation of technology leads to efficiency
and optimum utilization of resources. As if company adopt digital grid this will help in linking
the energy consumption and energy generation and that will leads to fully digitalization of value
chain of the company this makes the entire system reliable, sustainable and affordable.
Furthermore, this move requires high investment by GE- Power on technology and this require
strong coordination and partnership with others than only these challenges will be changed into
opportunities for GE.
References

Strategic Analysis of General Electric 11
Casey, D. & Pearce, D., 2018. More than Management Development: Action Learning at
General Electric Company. New York: Routledge.
GE, 2016. About GE global research. [Online]
Available at: https://www.geglobalresearch.com/about-us
[Accessed 5 August 2019].
GEPower, 2018. Power Services Catalog. [Online]
Available at: https://www.ge.com/power/gas/catalogs?catalog=servicecatalog
[Accessed 5 August 2019].
GEPower, 2019. Power and Gas Turbines. [Online]
Available at: https://www.ge.com/power/regions/africa
[Accessed 5 August 2019].
GEReport, 2019. GE Reports and Segments. [Online]
Available at: https://www.gereportsafrica.com/
[Accessed 5 August 2019].
Jenkins, W. & Williamson , D., 2015. Strategic Management and Business Analysis. New York:
Routledge .
Joseph, J. & Ocasio, W., 2012. Architecture, attention, and adaptation in the multibusiness firm:
General electric from 1951 to 2001. Strategic Management Journal , 33(6), pp. 633-660.
O'Boyle, T. F., 2011. At any cost: Jack Welch, General Electric, and the pursuit of profit. US:
Vintage.
Power, G., 2019. Powering Forward. [Online]
Available at: https://www.ge.com/power
[Accessed 5 August 2019].