Strategic Analysis; Tools & Techniques
Present a current critical strategic analysis of ONE Business Unit within
General Electric
Assignment 2 Week 8
BY
Adel Elshaibani
74110359
Supervisor
Juston Mubwandarikwa
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ONE Business Unit within General Electric, Assignments of Business Administration
The General Electric Company (GE) has many business divisions, including GE Aviation, GE Multimedia, GE Capital, GE Healthcare, and GE Power, among others, as one of the world's leading companies founded since Thomas Edison created the first electrical grid in 1882 (https://www.ge.com/about-us/history#/narrative/power). Multi division organizations like GE typically handle diverse multi-unit corporate portfolios where each unit provides its performance-dependent goods and services, and thus, wit
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Strategic Analysis; Tools & Techniques Present a current critical strategic analysis of ONE Business Unit within General Electric Assignment 2 Week 8 BY Adel Elshaibani 74110359 Supervisor Juston Mubwandarikwa
Index:
**1. Intro
- The Company's Short Business Role
- Resources Assessment and Business Relevant Programs** i. Resource audit and value systems a. The natural resources b. Leadership c. Management of skills d. Innovation and technology e. Different portfolios f. Customer support ii. GE-Power Value Chain Research ▪ Reception logistics ▪ Procedures ▪ Distribution strategy ▪ Advertising & marketing ▪ Services ii. TOWS analysis ▪ Threats ▪ Opportunities ▪ Weakness ▪ Strength **4. PRODUCE / PORTFOLIO Blend Critical Evaluation of the SBU
- Technical analysis of strategic directions for future growth
- Summary and Recommendations
- References
- Intro** The General Electric Company (GE) has many business divisions, including GE Aviation, GE Multimedia, GE Capital, GE Healthcare, and GE Power, among others, as one of the world's leading companies founded since
2. The Company's Short Business Role General Electric has innovated for more than 130 years which, preserved a rich historical heritage of originality based on the question 'Why can you forecast the future when we can create it? (https://www.ge.com/news/reports) In the view of Haafst, R. (2000), the business has undergone a varying amount of changes during General Electric's development, with its strategic capability effectively creating and maximizing its diversified portfolios which, lead to the company's growth. GE's corporate changes were daunting, particularly under Welch (1981-2001). Welch worked on the strategic transformation of GE, improved productivity on all levels of operators, reduced inventors using a time-based technique, dismantled office buildings, and launched the restructuring of GE. Through integration, diversification, mergers, strategic alliances, and retrenchment' in a new era of management and internal efficiency (Bucifal 2009). Welch's profits guidance for the growth of the quarter of GDP and its philosophy of management based on the GE slogan (GE 1995): Speed, Simplicity, self-confidence. In 2018. When H. Lawrence Culp, Jr., became the chairman of the CEO of GE and announced that he plans to reverse the recent GE turmoil by committing himself to two priorities:
- Financial position improvement.
- Strengthen GE core businesses. Nohria, N., (2000) argued that GE was famous globally due to its business unit structures in which Division Managers behave as small business owners, responding to their clients' desires and wishes. Corporate diversification
promotes the joint core competencies for GEs, such as trademarks, mutual expertise and capital, and professional labor. The latest GE policy in the power sector has been to improve its worldwide penetration of the industry by developing goods and services focused on technology. The gas turbine is a relevant example. The use of technology for product growth has made it possible for GE Power to become a pioneer in creativity and business enhancement on foreign markets. Finally, GE's ability helped GE Control with a solid financial and strategic base and batter business conditions.
3. Resources Assessment and Business Relevant Programs This chapter explores the capabilities that are used by GE Power to develop its core value and achieve competitive advantages. i. Resource audit and value systems Resource audit is an internal strategic analysis technique used to understand the current state of organization resources and competencies. a) The natural resources Oldenski, L., (2015). argued that through high R&D investment, highly-skilled, advanced innovative technologies, and a diverse workforce, GE Power could become the most profitable part of GE. Likewise, Roach, B., (2007) listed Global presence, quality products, and brand image, global, regional offices, GE Physical resources, individual market websites. b) Leadership
much more focused research and development expenditure, which increased the company in com in this pattern: 2007 2008 2009 2017 estimated 13.4$ billion 18$ billion 19$ billion 40$ billion Figure 1: GE power annul income Source : Prokesh, S., (2009). By investing millions into advanced technology, GE Power was able to increase its market access, reduce its prices, boost product quality and give consumers better values and more effective solutions that comply with the strict environmental regulations of today. GE Power had investment, Bucifal (2009), and, Prokesh, S. (2009). Besides, GE Power responded to growing market demand by investing in engines like the Integrated Combined Gasification Cycle (IGCC) and renewable energy such as solar and wind technology, Schon, S.C. and Small III, A.A, (2006). Finally, GE Power has been able to face the business climate dynamism and uncertainty by increasing market prospects and concentrating on consumer loyalty. e) Different portfolios The GE Power portfolio covers electric turbines, wind energy, petrol and water, nuclear reactor, aircraft engine derivatives, and water treatment solutions, and related services such as water purification systems, pumps, and valves, etc. Although gas power was separated from the GE energy portfolio in 2019 to improve visibility and accountability, GE Annual report (2019), GE Power still
led to a high transformation of GE's, resulting in $36 trillion in higher turnover, Roach, B, (2007). GE Annual Report 2019 also states that 13.6 Giga watts of gas turbines, 10 percent lower their fixed cost, and the start of its new Turbine secured from gas. f) Customer support GE Power has continued to invest in diversification, technical innovation, and more unique products that help GE reach new markets and cater to potential new clients, Roach, B., (2007). GE Power also offers its clients solutions to their requirements across a wide range of services such as after-sales support, improvements to equipment, performance monitoring, asset management software, and tools for maximizing performance ( https://www.iea.org/renewables2018/power/ ). GE-Power Value Chain Research The performance of GE Power as an entire company stems from the individual and unique activities that comprise its value chain, inside and around it. Reception logistics : GE Power has a broad supply chain of suppliers from different countries, ensuring the quality of the raw materials supplied and maintaining relationships with key suppliers, Roach, B., (2007), for its global operations. Procedures : GE Power took different steps to build products and services in the entire energy value chain of its operations. Rebak, R.B. (2018), reported that GE Power is a partner of another independent energy firm, Power Cost Inc. For example (PCI), to connect energy transactions with energy trading via
It describes the main internal and external factors that influence GE power's strategic role. Threats : Are the intimidation environmental factors that place limits on GE Power operations and challenges. For example, global warming and the number of competitors has increased, the power sector has become dynamic and complex, and new production technologies have advanced. Likewise, Haafst, R., (2000) reported fuel price fluctuation, high reliance on raw materials from third parties, poor performance, which influenced annual GE profitability. Further, negative media depictions, financial crises, the trade war between the USA and China, and tax reforms have diminished investors ' confidence in GE Strength. Opportunities : These are the external policy variables that can theoretically contribute to GE Power growth and change. Increasing the number of customers linked to the grid, growing demand for efficient gas and wind turbines, rising demand for energy equipment and services, and the increase of consumer growth in developing countries. Weakness : These are internal strategic variables that make GE Power's organizational characteristics demanding and restrictive. These shortcomings include reliance on raw material suppliers, poor sales growth, low Asian results, debts, the Enron scandal, and threats to amongst other things, the flexibility threat, according to Roach, B., (2007). Moreover, GE diversification has made the decision-making process less authoritative. Strength : These are GE Power's internal tools, expertise, and energy that use to maintain its competitive advantages over time. For example, GE brand name, global strengths, sustainable initiatives, sustainability, a diversified
portfolio, strategic partnerships with the Hitachi and Toshiba partnership, solid research and development, excellent management, and a vibrating corporate culture, among others. The strengths of GE Power helped it to expand, increase its profits, and position better than its competitors (Bucifal, 2009). Threats : intimidation environmental factors Opportunities : Increasing the number of customers Weakness : characteristics demanding and restrictive The decision-making less authoritative High reliance on third parties Growing demand for efficient gas and wind turbines. Reliance on raw material suppliers, poor sales growth. Strength : competitive advantages Financial crises, trade war between USA and China, tax reforms. GE brand, global strengths, sustainable initiatives, strategic partnerships, solid RD. The strengths of GE Power helped expand, increase its profits, and position The external policy theoretically can contribute to GE Power growth and change figure 2: (TOWS) analysis for GE power Source: Dyson, R.G., 2004. Strategic development and SWOT analysis
4. PRODUCE / PORTFOLIO Blend Critical Evaluation of the SBU A strategic planning mechanism used for the study of various portfolios and distribution of resources for multi dividual and multi-product companies is the Boston Consulting Group's (BCG). For individual products or business units,
Similarly, in the 2019 GE annual reports, CEO Culp stated that GE is going to need to manage better in its GE Power division by improving the administration of its three core functions (1).
5. Technical analysis of strategic directions for future growth The most profitable GE-division GE, Annual report (2019) and its restriction by GE Power, a division that manufactures products and services relating to the industrial generation, such as coal, electricity generation, wind turbines, nuclear reactors, photovoltaic engine derivatives for industrial, for governments, and other customers. ( https://www.iea.org/renewables2018/power/ ). For GE Power to overcome these challenges, Ansoff Matrix can adopt market penetration, diversification, product development, and market development. Birol, D., reported (2018), in market development that GE Power has been able to penetrate the Indian market and become a supplier of gas turbine technology to The Sravanthi Energy of India. Because, GE Power is characterized by the efficient use, in its existing products and services, of modern technology. Similarly, in light of GE Power's background in merger and acquisition growth, such as her acquisition of Dresser Inc. in 2011 and her co-venture with Hitachi and Toshiba in the field of nuclear power ( https:/csimarket.coded/segments.php.coded=GE ). Diversification investment in sustainable energy goods, innovative technologies, and renewable energy such as coal, solar, and wind energy
should develop to sustain its supremacy on the market. Furthermore, GE Power retains its competitive edge by investing in new technologies and markets with billions of people worldwide without access to electricity and expected a rise in the energy demand in 20 years to come. Roach, B., (2007) The main focus of GE Power's strategy should be the introduction of new technology, digitalization, regulation of product quality, and research and development. Continuous penetration into the market claims that GE Power is the leading supplier of high-quality goods and services, including the IGCC, and the introduction of its gas turbine 7HA.03, which has now become the world's largest and the powerful gas Turbine in the market ( GE 2019 ). ( https://csimarket.com/stocks/segments.php?code=GE ).
6. Summary and Recommendations. This study presents GE Power strategic analysis using resource checking, chain value, SWOT Analysis, BCG matrix, and Ansoff Matrix. Brand name GE, global strengths, sustainable initiatives, productivity, digital technological growth, diverse portfolio, technology cooperation with Hitachi and Toshiba, energy demand growth, solid research and development, excellent management, high-level staff, and lively corporate culture. (Bucifal, 2009; Roach, B., 2007), https://csimarket.com/stocks/segments.php?code=GE). The main factors are describing as making to become the world leader in energy transmission and General Electric's most rentable division. Roach, B., (2007), generating around one-third of the world's electricity and equipping
7. Refrences: ▪ Electric Power, G., 2020. The History Of GE | General Electric. [online] Ge.com. Available at: <https://www.ge.com/about-us/history#/narrative/ power> [Accessed 24 August 2020]. ▪ Gepower.com. 2020. GE Power | General Electric. [online] Available at: https://www.gepower.com/ [Accessed 24 August 2020]. ▪ Electric Power, G., 2020. General Electric Co.. [online] MarketWatch. Available at: http://www.marketwatch.com/investing/stock/ge/news [Accessed 24 August 2020]. ▪ Electric power, G., 2020. General Electric | Business | The Guardian. [online] the Guardian. Available at: https://www.theguardian.com/business/generalelectric [Accessed 26 August 2020]. ▪ Bloomberg.com. 2020. Bloomberg - Are You A Robot?. [online] Available at: https://www.bloomberg.com/quote/GE:US [Accessed 6 September 2020]. ▪ Electric Power, G., 2020. About General Electric Power | GE. [online] Ge.com. Available at: https://www.ge.com/power/about [Accessed 26 August 2020]. ▪ Reports Staff, G., 2020. 5 Things You Didn’T Know About Brilliant Innovation At GE | GE News. [online] Ge.com. Available at: <https://www.ge.com/news/reports/5-things-didnt-know-brilliant- innovation-ge#:~:text=GE%> [Accessed 26 August 2020]. ▪ Bucifal, S., 2009. Corporate Strategy Analysis: General Electric Co. (1981–Present). [ebook] Canberra, Australia: Australian National
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