GENERAL ELECTRIC

Laura, Ashley, Isis

• Introduction• General Electric (GE)• GE Business Units• Modified SOWT Analysis• GE Update• Conclusion• Recommendations• Quiz

AGENDA

http://www.youtube.com/watch?v=iMGnbXayj2E&NR=1

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