Strategic Analysis of GE Healthcare: Resources and Value Systems

This report provides a comprehensive strategic analysis of GE Healthcare, examining its business structure, corporate performance, and resource allocation. The analysis delves into GE Healthcare's strategic position, evaluating its headquarters relocation, operational functions, and contribution to the parent company, General Electric. It assesses the company's financial performance, including revenue generation, asset worth, and contributions to the overall GE portfolio. The report further explores GE Healthcare's resources and value systems, including its 'healthymagination' vision, resource endowment, core competencies, and value chain analysis. It also examines the company's product/service portfolio, including diagnostic imaging, IT solutions, and life sciences, evaluating their revenue contributions and employing the BCG matrix for portfolio management. Finally, the report evaluates GE Healthcare's potential for future strategic growth, focusing on the general healthcare industry, research and innovation, expansion into emerging markets, and sales growth through diagnostic and clinical equipment. The report concludes with recommendations based on the analysis.

Running head: STRATEGIC ANALYSIS; TOOLS & TECHNIQUES
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Strategic Analysis; Tools & Techniques
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STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 2
Table of Contents
Introduction......................................................................................................................................3
GE Healthcare Strategic Position....................................................................................................3
GE Healthcare business structure................................................................................................3
GE Healthcare corporate performance.........................................................................................4
GE Healthcare Total asset worth.................................................................................................6
An evaluation of GE Healthcare Resources and Value Systems.....................................................7
General Electric Healthcare Resource analysis...........................................................................7
GE Healthcare core competences and capabilities- A value chain analysis................................8
Value creation and sustenance of global presence.......................................................................8
Promoting learning and research for growth and expansion........................................................9
Sustaining global presence and managing relations..................................................................10
Product differentiation and cost efficiencies..............................................................................10
Evaluation of GE Healthcare Product/Service Portfolio...............................................................11
Evaluation of GE Healthcare potential future strategic growth.....................................................15
Focus on general healthcare industry.........................................................................................15
Research and innovation to enhance growth in GE Healthcare.................................................16
Enhancing presence in emerging markets..................................................................................17
Hastening sales growth through Diagnostic $ Clinical Equipment...........................................18
Conclusion and Recommendations................................................................................................18
References......................................................................................................................................20

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 3
Strategic Analysis; Tools & Techniques
Introduction
The primary aim of this paper is to present a current strategic analysis of GE Healthcare. It will
analyze various pertinent topics but mainly it will evaluate:
 GE Healthcare Strategic Position
 GE Healthcare Resources and Value Systems
 GE Healthcare Product/ Service Portfolio
 GE Healthcare Future Strategic Growth
GE Healthcare Strategic Position
GE Healthcare business structure
Due to various reasons, in 2016, GE Healthcare relocated its headquarters from UK to Chicago
(Hodsden, 2016). These headquarters carry out eight core functions namely sales, design,
manufacturing, finance, X-ray marketing and distribution, cooperate affairs, and global
acquisition. GE Healthcare has a business structure that supports the immense transitional
changes which are taking place not just in this segment but also in the GE Company as a whole.
This structure defines the configuration and composition of components such as interactions and
interconnections among departments and offices (GE Healthcare, 2019). GE Healthcare’s
business structure has evolved to enable support for diverse operations that are conducted by this
SBU.

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 4
GE Healthcare corporate performance
GE Healthcare is among the eight Strategic Business Units (SBUs) or Segments of General
Electric Company. Others include venture capital and finance, lighting, oil and gas, digital
industry, additive manufacturing, aviation, healthcare, and power renewable energy (Reuters,
2019). GE Healthcare has employed more than 50,000 employees (Wilen, 2018). It operates in
over 100 countries and in these places, so many stakeholders such as healthcare professionals
and patients benefit from it (PharmaBoardroom, 2018). As of 2018, GE Healthcare contributed
around $ 19.78 billion occupying position three in revenue generation among the eight SBUs.

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 5
Source: Statista, 2019, General Electric: revenue by segment 2018. Retrieved from:
https://www.statista.com/statistics/245430/revenue-of-general-electric-by-segment/
Since 1978 to 2018, GE Healthcare has had a steadily rise in levels of revenue. This is shown in
the graph below:
Statista, 2019. General Electric profits in the Healthcare segment 1997-2018. Retrieved from:
https://www.statista.com/statistics/263830/profit-for-general-electric-healthcare-segment-since-
1997/
GE Healthcare Unit is constantly putting in measures to ensure this trend continues for as long as
possible.

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 6
GE Healthcare Total asset worth
As at 2018, the assets worth of General Electric was approximated to amount to $309.13. Out of
this total, GE Healthcare Segment had contributed about $28.05.
Source: Statista, 2019. General Electric: total assets by segment 2018. Retrieved from:
https://www.statista.com/statistics/261524/total-assets-of-general-electric-by-region/

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 7
GE Healthcare’s contribution marked 9.07% of the total assets and ranked fifth among the GE’s
SBUs.
An evaluation of GE Healthcare Resources and Value Systems
During the leadership of Jeff Immelt in 2009, GE Healthcare started implementing
“healthymagination” vision for the future. The main purpose of healthymagination was to lessen
costs, enhance access, and improve efficiency and quality globally ( General Electric, 2009).
This section conducts a strategic analysis assessment of GE Healthcare’s capabilities and internal
resources based on its present and future competitiveness.
General Electric Healthcare Resource analysis
GE Healthcare resource endowment is far-reaching and it offers the company a robust
competitive edge in the industry. Owing to the Unit’s strong base of physical and financial
resources, this company realizes superior revenues in every fiscal year (Generic Electronic,
2018). This firm also has a splendid credit rating due to its sufficient turnover that enables it to
acquire credit at friendly interest rates to finance its operations. GE Healthcare acquires superior
earnings from its business activities and therefore, it has a reputable global presence and on
yearly basis, it invests adequately in Research & Development projects. The company has as
well invested handsomely in high-tech and adaptability and as such, it has effective and efficient
supply chain systems across the world (General Electric, 2017). As a result of its incomparable
status, GE Healthcare attracts exceptionally qualified personnel that the HR department works
tirelessly to retain for a long time.

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 8
GE Healthcare core competences and capabilities- A value chain analysis
Due to its incredible resource configuration, GE Healthcare has over the years gained a wide
array of competitive advantage prospective. In its endeavor to retain its competitive edge in the
industry, this company has attempted to distinguish its core capabilities (capacities) or
competencies (GE Healthcare, 2016). The firm has actually attained this particular goal by
sustaining its global presence successfully, differentiating its products, promoting learning and
research for growth and expansion, creating value, attaining cost efficiencies, and managing
relations.
Value creation and sustenance of global presence
GE Healthcare has for the last decades been able to improve its supply chain systems. This
success can be attributed to its capacity to purchase large quantities of raw materials and finished
commodities (General Electric Company, 2019). Owing to its tremendous success, GE
Healthcare has effectively concentrated on enhancing its key competences and strengths by
leveraging other none-core activities by outsourcing possibilities. In order to support this
strategy, this firm takes elementary manufacturing as a none-core value creating activity.
Nonetheless, it is worth highlighting that though it does not consider elementary manufacturing
as a core capability, GE Healthcare maintains a solitary assembly and manufacturing role for its
proprietary commodities since it consults its high-tech personnel and other relevant experts in the
research and innovation organizational unit (General Electric, 2018). In so doing, the company is
enabled to safeguard its capabilities that are likely to enhance its competitive edge in the future.

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 9
Promoting learning and research for growth and expansion
GE Healthcare endeavors to execute a strong learning and knowledge management process
(General Electric Company , 2019). As it tries to attain this objective, this firm assumes an active
methodology to react to global business shifts. Its great urge for continuous growth and
development, GE Healthcare has emerged an epicenter for learning and special knowledge
acquisition. Every departmental unit has streamlined itself towards achieving this goal of
experimenting new ideas and constantly branding employees with novel knowledge and skills.
This can be attributed to the company’s outstanding performance for many years. In its dire need
to meet future growth prospects, GE Healthcare has put in place strategic learning measures all
of which are focused on growth and expansion. This Unit is also renowned for its ability to
attract and retain an exceptionally qualified and experienced labor pool that uses its unique
talents in sailing the entire firm to the right directions ( Generic Electric, 2019). What is more,
the parent organization is also contributing immensely in innovation and learning, something that
has enhanced GE Healthcare’s learning strategies.
Owing to its reputable success, GE Healthcare has the capacity to re-design itself and become
accustomed to various multifaceted changes in business requirements. Consequently, it has set in
new measures to for R&D in order to experience further growth and development. GE
Healthcare successfully conducts R&D projects by harnessing all available resources which can
facilitate them. Through its research investments, management in this firm has been able to
resolve quite a number of challenges which might hamper its future growth and expansion.

STRATEGIC ANALYSIS; TOOLS & TECHNIQUES 10
Sustaining global presence and managing relations
GE Healthcare greatly values its competitiveness and as a result, it works hard to maintain a
reputable global image and manage business relations with other players in the sector (General
Electric Company, 2018). In view of this, the company has laid ample emphasize on splendid
supplier and customer relationships as one ways of creating value. GE Healthcare technology,
human resources, and infrastructure are modified to contribute to incomparable marketing, sales,
and superior service delivery. All products are properly customized and evaluated to make sure
that they fulfill customer needs and requirements. This Unit has a global network with numerous
manufacturing plants located outside the UK and US. This network has provided the company
with a wide customer base, broader marketing scope, wide market coverage, unbeatable brand,
production and IT divisions (Rice, 2017). This aspect must be playing a vital role in the success
of GE Healthcare. In addition, all critical decisions on subcontracting and procurement are made
head office divisions. In this Unit, there are also well-strategized operational systems that allow
smooth flow of knowledge within the conglomerate.
Product differentiation and cost efficiencies
The parent organization and its conglomerate, GE Healthcare, have invested substantially in
product differentiation as a strategic approach of acquiring cost efficiencies (Thompson, 2017).
The firm is renowned for its ability to provide topnotch and high quality products that are well
customized and diversified. Further, it is among the units that have achieved optimal product
differentiation and as a result, reaffirming their competitiveness in their respective sectors.
Effective knowledge management abilities coupled with significant domestic and global
relationships have contributed to GE Healthcare’s cost efficiencies ( General Electric Company,

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2012). Due to this ability, this company has been able to compete favorably with its key
competitors such as German-based Siemens. Furthermore, in its quest to attain cost
competitiveness, GE Healthcare has strategically transferred some of its operations into low cost
countries and also intensified its connections with low cost dependable suppliers. Due to its wide
network and cost effectiveness, GE Healthcare has benefited from economies of scale, further
homogenizing its components by reorganizing its supply chain systems (Jack, 2011).
Evaluation of GE Healthcare Product/Service Portfolio
In contemporary world of healthcare, technology has revolutionized all medical operations thus
simplifying functions of health practitioners. GE Healthcare just like a majority of healthcare
conglomerates has a groundbreaking technological advancement that is a pillar to its sustained
growth and development. The company’s broad portfolio consists of life sciences, medical
diagnostics, information technology, and other medical services and solutions (General Electric
Company, 2018). GE Healthcare manufactures medical diagnostic equipment. It also provides
dyes which are used in magnetic-resonance-imaging processes. Additionally, it develops Health
technology for medical imaging and information technologies, biopharmaceutical manufacturing,
drug discovery, patient monitoring systems, medical diagnostics, and disease research.
Diagnostic imaging & services include Magnetic Resonance, Computed Tomography, Molecular
Imaging, and Service & Solutions. Mobile diagnostics & Monitoring services include
Ultrasound, Clinical Solutions, Monitoring, and Mobile Health. IT & digital solutions services
provide in GE Healthcare include Enterprise Imaging, Financial Management, Care Area
Workflows, and GE Health Cloud TM. (General Electric Company, 2018) Life Sciences include

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activities such as Bio process, Protein & Cell Sciences, Contrast Media & Nuclear Tracers and
Cellular Therapy.
In GE Healthcare’s service/product Portfolio, different services and products generate different
levels of income for the company as shown in the figure below:
Source: GE Healthcare. (2010) GE Healthcare