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GENERAL ELECTRIC
Laura, Ashley, Isis
• Introduction• General Electric (GE)• GE Business Units• Modified SOWT Analysis• GE Update• Conclusion• Recommendations• Quiz
AGENDA
GENERAL ELECTRIC
• CEO: Jeffrey Immelt
• 2010, GE ranked #1 in healthcare and #19 overall on Fast Company's list of the world's top 50 most innova-tive companies.
• In 2010, GE was named in Ethisphere's list of the world's most ethical companies.
• In 2010, GE was named in Business Week's list of the world's 25 most inventive companies.
• In 2010, GE ranked among Fortune magazine's listing of the Most Admired Companies in the World for its 5th consecutive year.
• Fortune ranked GE among its list of the world's top compa-nies for leaders.
GENERAL ELECTRICBusiness Units
Healthcare
Finance Busi-ness
Energy
Appliances
Electrical Distribution
Consumer Electronics
AviationFinance Con-
sumer
Oil & GasMedia &
Entertainment
Lighting
Rail
Software & Services
Water
VIDEO
• General Electric Medical Systems a Division of General Electric
• President: Joe Hogan
• Began in the 1940’s
• Market Leader in all regions: Americas, Europe/Africa, & Asia
Brief Case Introduction
STRENGHTS
• Training Programs
• Low-Cost Manufacturing
• Centers of Excellence (COE)
• Long-term Relationships
• Global Supply Chain Management
STRENGHTS
CENTER OF EXCELLENCE (CEO)
GLOBAL SUPPLY CHAIN
WEAKNESSES
– Global marketing activities• Products customization • Marketing of used products • Marketing newer generations of products and services (Healthcare IT).
– Long sale process nature. – High fixed costs. – High investment in the development of new products– Saturated market which conducted to low rates of market growth.
– Low levels of product differentiation and the introduction of the concept of service was one of the few sources of differentiation.
– Development of suppliers in low-cost countries.
WEAKNESSES
OPPORTUNITIES
• Personalized Medicine -Genomics and Health-
care Information Technology (IT)
• Customer Relationship Manage-
ment
• After-Sales Services
• Used Equipment Buying Program
• Management through Diversity
• Talent Retention and Attraction
• Acquisition of Chinese Assem-
blers
OPPORTUNITIES
THREATS
Threats
• Competitors
• Government Regulations
• Economic Conditions
STRATEGIC GAP
• CHANGING THE BUSINESS MODEL?
• The Global Product Company (GPC) – GPC’s philosophy was to concentrate manufacturing-and ulti-
mate other activities- wherever in the world it could be carried out to GE’s exacting standards most cost-effectively.
– Should the company modify GPC by adopting an “In China for China” policy so as to focus squarely on the Chinese mar-ket?
• Technological changes personalized diagnostics– Genomics and healthcare information technology
STRATEGIC GAP
ALTERNATIVES
Alternatives PROS CONS
"In China for
China" Modi-
fying the GPC
business model to
be introduce in
the Chinese
Market.
- Aging and Growth rate of Population
- Economic of Scales
- Low Cost Labor
Force
- Low Fixed Cost
-Market Gain
- Good Government Relationship
- Access to Cheap Materials
- Exports
Opportunities
- Reduction of Prices
- Low Prices Strategy
- Reputation of GEMS
- Not enough
suppliers- Competitors in the Market (Siemens)
- A great number of assembler and trading Chinese Companies
- Competition among GEMS teams to become the “Center of Excellence”
- Governmental Regulations.
“IN CHINA FOR CHINA”
Alternatives PROS CONS
Introducing Ge-
nomics
Diversification
Future-Oriented
strategy
- Update with Market Changes.
- Medicine of the
Future
- Easy Capture of Talented Biomedical
- Accomplishing diversification strategy
- Reduce numbers of competitors
- Opportunity to develop new services and equipments 20% high operating Margin
-Swift of Human Resources Expertise
-Slow Return on Investment
-Difficult Regulatory Process
-Require Pharmaceutical collaboration
-Ethical Issues
Alternatives PROS CONS
Developing Healthcare IT
- Be ahead of Competitors
- Achieve a Competitive Advantage.
- Accomplishing Innovation
- Diversification Strategy
-High Investment in Research and Development
-Developing strong relationship with customer is costly
-Developing new Sales Strategies for this different business unit demand time and more sales force.
-Fragmented Market due to Competitors participation
Alternatives PROS CONS
Used Equipment Profitable Market
Development
- Profitable MarketOpportunity
-Opportunity to develop Maintenance Service Program
- Alternatives Sales Options for those cost efficient Customer focus
- Capture of a new Market focused in used equipment
- No competition from World Leaders in Healthcare.
- Reputation of GEMS
-Ethical issues
- Customers willing to pay for used equipments - Strong Customer Relationship is needed to accomplish this strategy
- Sophisticated Information System to manage the market
Alternatives PROS CONS
Developing a Strong Service and Reparation
Program/Modifying GEMS general
Business Strategy
- Increase profitability through services fee
- Develop strong customer relationship
- Customer Retention
- Diversification Strategy
- Require more Human Resources (technicians)
- Acquisition of an efficient and effective CRM system
- Customer Service is one of the most difficult departments to manage and coordinate
- Ineffective Customer Service would reduce GEMS general reputation in the market.
India Industry average was expected to grow at 13% annually but some
of the cons is that this country has really• Poor healthcare insurance coverage and the economic conditions
were not satisfactory for investment at the time of the case, moreover 75% of healthcare expenses were paid by out-of-pocket of individuals.
Japan provided universal healthcare coverage to its population. • Japan’s Hospitals were in their majority government owned and
funded with a global budget.
Russia Because it was effectively located in Asia that would allow easy
exports to other Asian countries but certainly it is not most beneficial than China.
EXPLORING OTHERS POTEN-TIAL INDUSTRIAL MARKETS
IN ASIA
GENERAL ELEC-TRIC
UPDATE
– General Electric Healthcare.
– Focused on a transformational medical technology.
– Acquired the genomics business area .
– Oriented to a prediction, information, and treating disease process.
– Developing biopharmaceutical manufacturing technologies.
– John Dinen is the formal president and CEO of this healthcare
division.
– Continuity Management.
– Headquarter is located in the United Kingdom.
– $ 17,000 billion unit of GE company.
– Presence in more than 44 countries including all the continents.
– Presence in South America (Colombia, Chile, Argentina, Brazil,
Peru, Venezuela, etc).
UPDATE
CONCLUSIONS
• Changes in the industry– Creation of GEMS Selling products abroad Design and produc-
tion
• Services as an opportunity for business diversification and differentiation
• The core competencies of the company are presented by the following elements. – Value chain management– Innovation– Management of global operations.
• Successful acquisition policy.• General Electric manages its worldwide long term rela-
tionships based on the concept of creating value. • Cost reduction
– Use of suppliers out of low cost counties– Economies of scale
• GEMS global strategy was influenced by the technologi-cal development worldwide.
CONCLUSIONS
• Competitors were far behind GEMS in terms of profitabil-
ity, market share and innovation, but the fact that they
accept often lower margins keeps cost pressure for GEMS
alive.
• GEMS developed a complex and efficient business strat-
egy that allowed them to be ranked as the world’s leading
company in healthcare technological equipment.
CONCLUSIONS
RECOMMENDA-TIONS
• To reduce costs not just by moving operation facilities to low cost countries, but also by outsourcing other compo-nents of the value chain.
• To continue enhancing operations on developing markets.• To use information technology tools and after-sales services
in order to create customized options for customers. For example, developing Healthcare IT.
• Diversify the lines of services offered, for instance by the introduction of reparation services as part of the services department.
• To implement innovative adding value strategies, such as “green” actions, in order to differentiate from competitors.
• Introducing Genomics as a long term strategy more focused on biomedical science than in the engineering science.
RECOMMENDATIONS
MERRY CHRISTMAS