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Strategic analysis; Tools & Techniques
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UNIVERSITY OF SOUTH WALES
financial burdens it is suffering from. Cutting down excess costs and jobs can alter the financial stet that GE is facing, not only that, GE also takes advantage of the corporate culture of learning and sharing knowledge through providing digital channels for employees to exchange knowledge and enhance innovation (Rice, 2017). These collaborative activities can result in cost cutting and benefit the low cost strategy. GE also implemented a broad differentiation strategy a long ago, since the early 1900, GE developed a research laboratory for industrial innovations and began to acquire and purchase many companies, until 1989 when it combined the business in Europe with the British General Electric Company for the production of electric and medical devices and power systems (The Editors of Encyclopaedia Britannica, 2019). GE is conquering various industries and sectors with broad range of products sold worldwide, benefiting from the broad differentiation strategy with its presence in various markets and industries. The company’s core competencies as diversification, learning and innovation have put GE in a strong competitive position helping in implementing the positioning aimed strategy. GE healthcare strategic business unit will be the unit in analysis in the rest of this research; it is the fourth revenue generating business unit among the eight units in GE in 2018 (Wagner, 2019). General Electric's revenue in FY 2018, by segment (in billion U.S. dollars) 2018 (Wagner, 2019)
And it is the fifth business unit in the value of assets in GE (Wagner, 2019). General Electric's total assets in FY 2018, by segment (in billion U.S. dollars) (Wagner, 2019) GE Healthcare business unit has a promising profit growth rate, putting it among the highly important business units in GE (Mikulic, 2019).
The financial resources are in good shape, helping the company in achieving more competitive advantages. Also, allowing the company for providing competitive products prices and generates sufficient funds for the research and development department for developing new solutions and more differentiated products. GE has put the healthcare sector in second place after aviation in R&D funds in 2018 (Lookers PLC, 2018). GE has decided to present GE Healthcare as a standalone company, which in turn enhances the financial freedom and capabilities for this company to compete and prosper with no burden of other sectors or sister companies (Imaging Technology News, 2018). (Lookers PLC, 2018)
As mentioned earlier in this research, GE is operating in more than 180 countries with 348 manufacturing plants in over than 43 countries (One, 2018)(GE, 2019) and multiple research labs. These plants and research centers are all integrated in a communication and knowledge exchange system that facilitates the development of new ideas and innovations and spread of good practice and share gained experiences (Rice, 2017). The wide physical presence of GE around the world and the collaborative efforts done among these plants through communication and knowledge transfer, have put the physical resources of GE healthcare as an important asset and value adding factors. This enhances competiveness, but also should be maintained properly.
GE has more than 53800 employees across over 180 countries (Lookers PLC, 2018). It has implemented the learning and innovation culture among employees and provided the technological channels to facilitate and monitor these activities. GE has its strategy when it comes to managing human resources. Employees have the opportunity to represent their ideas and concerns. They are collaborating in teams from different countries aiming for a common goal. These teams get continuous trainings and meetings with cross teams for collaboration in
problem solving and exchanging knowledge from apart teams and plants (Rice, 2017). Human resources are considered a huge asset in GE, as they are trained, qualified, working in teams and sharing ideas and innovations across the organization. Also, investments are provided to the human resources in order to gain the maximum productivity and collaboration among them. They form a unique culture which helps in maintaining goals and productivity in place.
GE depends on diversification. Diversity of sectors and products has enhanced the firm’s reputation and competiveness along the past decades. Expanding horizontally GE is aiming for providing diversified products to wide array of sectors. These product and companies within GE are not separate from each other. They are collaborating and sharing insights and ideas. So that different sectors depend on each other (Barron, 2011). The organizational system and leadership strategy implemented allow employees and middle managers to interact, collaborate, learn and exchange knowledge and insights from each other. Management put distant teams together through technology and communication channels and encourages them to ask questions, debate ideas and find solutions from facing problems. Management aim for delivering the same ideas and culture to all employees across the world, priorities and shared metrics are communicated to all employees (Rice, 2017). Furthermore, GE management is aware of the fast changing environment, business opportunities and challenges, it has invested in diverse locations as Nigeria, Japan, India and Pakistan (Rice, 2017). These approaches aid in enhancing their physical presence and brand image and facilitate market introduction. Management and leadership in GE are considered great asset and comprise for the strategic directions GE is taking for continuous growth and competitiveness.
GE puts great efforts in developing and implementing technologies in various fields. It has implemented an internal communication system and knowledge exchange system between different sectors, departments and plants. GE has dedicated funds for research and development activities for developing better products and helping the environment. In 2017, GE Healthcare has launched 26 products developed for healthcare imaging and solutions (One, 2018). These huge technical capabilities are very important to support leadership strategy and ongoing growth of the company.
in an important position. As these activities are directly involved with customers and suppliers, there are high number of stakeholders GE is dealing with and anticipating their feedback and concerns. GE has decided to reestablish supply chain management and to be directly aligned to the CEO (Patrick, 2017), this in an aim for cost reduction and increasing the value of these activities. Marketing and sales GE Healthcare is one of the high revenues and rising value in GE (Wagner, 2019). The revenues are growing by 5 percent (Lookers PLC, 2018). Also, marketing activities are supporting the brand image and promoting for the healthcare vision GE is presenting. And using the 1000 and more scientists working in healthcare research for generating ideas and innovations (Lookers PLC, 2018) to help GE support the healthcare industry and a wide range of customers. This in fact adds value to the marketing activities and overall brand image of the company. Services GE Healthcare provides a range of healthcare services and products that put GE in a competition in many subsectors. GE is having a wide portfolio of products and services such as diagnostic imaging, life sciences services and products, clinical system, digital healthcare solutions and healthcare products (One, 2018). These services serve as an added value to GE value chain as the diversified portfolio associated with product quality and brand image creates and increases value.
Technology GE Healthcare implements technology is its daily operations, also as mentioned, research and development departments are always in search for new ideas and technology to implement in order to achieve low cost of production or aid in knowledge exchange and team interactions. This activity generated value to the company. Infrastructure GE is characterized by its physical and intangible infrastructures. Manufacturing plants and offices are built to add value and flexibility for production and supply chain. The technology and work culture and environment also is a value adding infrastructure activity, as this
intangible asset helps in achieving the intended results, whether cost reduction or facilitation of learning or production. Human resources management Human resources are considered a huge asset in GE, as they are trained, qualified, working in teams and sharing ideas and innovations across the organization. Also, investments are provided to the human resources in order to gain the maximum productivity and collaboration among them. They form a unique culture which helps in achieving goals and increasing productivity. Research and Development R&D is a highly value adding activity in GE Healthcare. GE invests huge amounts in R&D, since 2000, GE has invested more than 43 billion dollar and released about 35800 patents (One, 2018). These activities enhance the market competiveness and reliability to customers. The R&D importance in GE indicates the dedication for providing new and innovative solutions and alternatives, which in turn increases market share of the company and enhances brand image and customers loyalty.
Strengths
- Strong financial status - Wide spread globally - New innovations - Diversified portfolio - R&D investments - Advanced technology - Innovative & learning management strategy - GE culture & network Weaknesses - Operating in many countries with different regulatory policies. - High R&D investment costs
position as a star generating high cash flow in a rapid growing market. On the other hand, if GE Healthcare fails to deliver the required quality and diversity of products, it can fall into the question mark position. In which the fast growing market mandates a lot of effort to cope with, otherwise GE falls in low market shares and loses its competitive advantages and certainly will require much work to regain its position. Market Growth Rate High Low Star Question Mark Dog Cash Cow High Low Market Share
Utilizing Ansoff’s Product/Market Matrix to identify the future growth and strategic opportunity for GE Healthcare (McGraw-Hill Education; Unicaf, 2017) Product / Market Existing New Existing Market Penetration
aid in increasing the market shares, company’s power and customers’ loyalty. And it has a good chance in entering new markets with existing products or new ones due to the rising medical needs globally, quality products and diversification of products to cover the customers’ needs. In the current case, GE Healthcare has to precede products development in an innovative manner and adopting low cost in order to compete in different markets. Maintaining the current markets’ growth needs the concentration on developing products that add value to the company and aftersales care. While to enter new markets, GE has to deliver low cost products with innovations and solutions that can be useful in the new market. Also, paying attention to supply chain activities in various areas to help implementing a low cost strategy.
In this research, we have discovered many internal and external factors in GE Healthcare. These factors are putting the company in today’s position and giving it a great value. The value creating factors as investment in R&D, diversified portfolio, leadership strategy which is promoting learning, innovation and knowledge exchange. All these factors together with the strong financial position GE Healthcare has obtained, give it a high value and market position and in turn increase market competitiveness. In a rapid changing global economy and fast changing technologies, GE has to be careful with the steps taken for product development and innovation of new products. The diversified and differentiated products should be regularly assessed for competitiveness and market shares. Many efforts should be done for more customer loyalty and brand image in new markets besides adopting low cost strategy for more product competitiveness.
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