Strategic Tools And Business Expansion Of General Electric

Generic Strategy Used by General Electric

Discuss about the Critical Analysis Of General Electric.

The report would focus on the dimensions of the strategic tools used by gigantic business organizations to take decisions regarding the expansion and exfoliation of business. Particularly in the context of General Electric, applying a wide range of strategic tools enables General Motors to maintain and balance the market share, brand value, brand equity and profit margins. This report will be discussing the different strategic tools that are used by the company to maintain its strategic position, chalk out the relation of General Electric with other companies, identify the resources and plan the use of the resources and a lot more. The report also aims at identifying the value chain that is used by the company and its corresponding benefits.

General Electric follows a generic strategy that fetches the company with advantageous outcome in the competitive market along with the overall growth of the global market. The concept of generic strategy is used by the company in almost all of its segments like in energy, oil and aviation industries, in the transportation and health care division and also in electric lighting industries. It must be noted that these are the extensive growth strategies that are used by General Electric. Apart from the extensive growth, the company also uses intensive growth strategies that are essentially focused on the sustenance of the business and maintenance of profit margins (Www3.gehealthcare.com 2018).

General Electric does not focus on a single segment, rather holds faith in widening its wing into multiple segments to expand its business. Diversification is the key strategy for business growth maintained by General Electric. A clear difference can be witnessed in the economic changes that occurred in the other rival companies like 3E and Siemens ad can be compared to General Electric. The comparison will only show that despite the economic turmoil in the other companies, General Electric has been able to maintain its economic balance. The usp of the company remains in its diversified product range. The company manages to pull the revenue from all the other segment, in case a particular segment fails to draw it. It can therefore be asserted that in order to remain competitive in the market, General electric must adhere to its strategies and must make sure that all the strategies comply with the current market situation.

It would be apt to compare and contrast the SBU of health care services at General Electric with the other existing domains of the company. Health care services at General Electric is further divided into sub sections of pharmacy, heal care centers, clinics, diagnostic centers and a lot more (Albert, Kreutzer and Lechner 2015). The company has effectively managed to maintain a huge diversity even under the single head of health care services. General Healthcare believes in optimization of resources. For acquiring that it has developed a few strategies that incorporates digital technology like OnWatch predictive technology, that keeps a constant monitoring on the pre-configured values and data in all the technical machine. It rings alarm whenever there arises any discrepancy between the pre-determined values. It not only makes the use of latest technology, but also at the same time develops and innovates medicines and medical treatments. General Electric also has other segments within the company like transportation, aerospace and aviation, energy oil like petrol and diesel, commercial gas, electric and lighting business.

Diversification as Key Strategy for Business Growth

Main resources of the company                  

Main resources of General Electric’s health care centers are mostly the human resource. Since the entire health care organization largely focuses on service towards humankind, human resource and development of the same is perhaps the most important resource available that can be counted. Apart from human resource, health care centers under General Electric also possesses some other important resources like technical resource, supply of authentic drugs and chemicals for the manufacturing medicines, physical resource and educational resource. It is needless to assert that apart from the afore mentioned resources, health care services at General Electric also own a huge stock of financial resource, it has its own stakeholders, loyal customers etc. Some of the resources at the health care center are possessed by the organization while some other are created by the company. For example, the huge base of loyal customers was not there at the very starting of the health care wing by General Electric. Health care services at GE has earned this customer base that it has now through continuous efforts and dedication towards patients and public.

Health care services in General Electric makes the use of resource models and competence models to provide training and development programs from the employees. Health care services does so in order to ensure that the final goals and objectives of the health care center is met by the employees, channeled in proper direction (Arima et al., 2017).  General Electric, particularly the health care division adheres to both the technical and general competencies to meet the goals.

Competency model for showing relevance of aims with Healthcare unit:  

The department of human resource and management at GE healthcare uses the competence model to recruit and employ staff based on their knowledge and comply it with the requirements of the job role. After charting the goals and objectives of the SBU, it becomes imperative for the human resource department to hire the employees that would be a resource to the company and would carry the abilities required to fulfill the pre-determined goals.

Resource Model:

GE works with basically four different types of models, the Fombrun, the Harvard, the Guest and Warwick to meet the goals of the organization (Asiedu 2015). It makes the use of Fombrun model to select the apt employees who would help to achieve the target, to frame the appraisal procedures to provide training and development when needed and to plan reward and recognition strategies. The Harvard model is also used by the healthcare departments as GE as a guide. The Harvard model guides the organization about the maintenance of interest of the stakeholders towards the company and to analyze the situational factors that may impact the company (Boly, Morel and Camargo 2014). It also guides with the feedback, investment and the long-term consequences etc. the Guest model is used to re organize the recruitment strategies and the behavioral strategies of the HRM. The organization believes that the inflow of cash largely depends upon the performance of the employees. As such it uses Guest model to fix the commitment factors and behavioral outcomes of the employees. The final resource model that is used by the company is Warwick model, according to which the HRM makes strategies to be implemented for better benefit of the business, analyze the change that occurs in the market, and take steps as guided by the model. The Warwick model also helps healthcare at GE to establish a connection between the external and the internal factors that affects the company. Thus, all the resource models serves the purpose of channeling the company towards the right direction in order to achieve the company goals within the stipulated time.

Value Chain and Benefits of General Electric

Activities enabling strategic position of the company:

In order to maintain its strategic position, healthcare at GE, it amalgamates the needs of the society with its institutional benefits. While prioritizing its profit margins, it also at the same time serves its commitment towards the society. It performs a number of activities to ensure its sustainability and maintain its strategic position in the market. At the very first hand, it explains the insight strategy to its employees.

• The company shares the vision that it has planned so that it can be complied with better marketing decisions. That is, the decisions taken by the company are not autocratic, but a joint decision taken by the board. Hence, the ideas, recommendation and thought of the team helps to keep the strategic position in the market secured.
• The organizational structure is data driven. Making a data driven organizational structure helps healthcare at GE to make the optimum use of organizational structure in the execution of strategies ruled by insights and ideals in performing vital tasks like fixing of budgets, measuring timelines and getting work done within the stipulated time.
• Activities like identification of the right people for the organization that suits best the organizational needs are done by healthcare at GE. The management at GE critically assesses all the pros and cons while designing, developing and implementing plan to recruit, hire, train and manage employees (Brouthers, Nakos and Dimitratos 2015). These employees after being trained are capable to use individual skills and ability to perform and successfully execute complicated tasks.
• Healthcare unit at GE ensures that all the employees have a confidence in the insight driven strategies implemented by the company. It structures the organization in a way that all the employees of the company are integrated through the ideals of the company, and essentially indices a feeling within the employees of oneness. All the systems in the company are insight based. It looks into the development process of metrics to track the inputs, outputs and measure results (CEPTUREANU 2016).

            Though these activities, GE ensures to keep its strategic position in the market intact

According to value chain, critical activities of Health care in GE can be described in the following ways:

Logistics: At GE, logistics ensures the inflow and outflow of goods and raw materials in the organization. Inbound logistics of GE maintains the inflow of goods while the outbound logistics concerns the outflow of the manufactured product to the retailers and while sellers. For example, inbound logistics are the chemicals and drugs, outbound are the finished products like medicines. Using high end logistics ensures that the products and services delivered by GE are remarkable and unique from other companies (Debroux 2017).

Operations: Operations at GE health care incorporates processes, facilities and the employees as a whole that are required to design, produce, market and sell services and products to customers. The company aims at designing the goods in lowest possible price and sells it in the highest price possible. In this context, operations at GE healthcare designs and produce services for patients, uses latest technical machine and strictly monitors the service so that more customers are attracted by the services offered. The operations in GE work in coordination with all the other department to stand out from all the other companies.

Front-end activities:

The front end value chain, includes the sales, support and marketing. It takes feedback from customers and clients, addresses their requirements and helps to analyze the presence of potential customers (Xie et al., 2016). In this perspective, it can be asserted that the strategic managers carry on the front-end activities to induce faith amongst public that the best care and best medical services are available at GE healthcare.

Supporting factors:

The supportive factors at GE health care are it’s infrastructure, human resources, technology based operations and procurement. All these factors work together for enhancing the quality of services that are given out. A critical analysis made of the infrastructure helps the management at GE to boost up the entire structure in order to provide better customer support (Wu et al., 2015).

Resource Models and Competence Models at General Electric

Human resource: Human resource department in GE scrutinizes employees before recruiting them. However, in order to ensure that the employees recruited are apt for serving the need of the company certain measures are taken by the company like following models of recruitment strategy (Gollenia 2016). Yet it has been seen that recruitment based only on verbal interview at times lack worth.

All these segments at healthcare work in coordination to bring out the best services, thus attain greater customer base.

It has been seen that all the department of healthcare at GE are valuable to the organization, though some are low and some are highly valuable. The human resource department is extremely valuable to the organization as the practices carried out are rare. The department also holds its value in the fact that human resource employees are the most important resource of the company since all the major decision and the business investment plan are married out by the department (Wang, Wei and Caswell 2016).

More or less all the department of the healthcare performs respective tasks swiftly and in perfection. As such, it can be asserted that the services and the products of the organization are rare and stands out in the market. Apart from that the front-end activities carries o some rare strategies that makes the company unique and different in the market.

The resources of the company are non-imitable. Since most of the services and strategies of the company are rare and uncommon, it is not imitated. However, because the products are rare and inimitable, the cost of the products and the services are generally on the higher side.

The company is organized and has been able to manage the short-term competitive advantages. Resultantly, managing the short-term competitive advantages for a long time has helped the organization to achieve long-term advantages.

Analysis: A close observation would portray that the primary and the secondary activities carried by GE healthcare are ordinary, yet the specialty lies in the way these are carried (Theriou 2015). The organization takes regular feedback from the customers and the feedbacks are highly valued. Apart from that, the complaints of the customers are also taken in a positive manner (Johnson 2016).

Width of products: At GE health care, the product mix width of the company is approximately ten and above, since the company has a number of products for the customers all of various range. Presently, the company has its product mix width ranged at ten, there are chances that the company can be expand its product mix width into more range of products.

Critical Activities of Health Care in General Electric

Length of the products: It refers to a particular product, and the range that a particular product posses. For example, in GE health care, CT scanners are manufactured. The type of the CT scanners that are manufactured falls under the length or the variety of products. Healthcare at GE own a wide variety of product ranges. For example, a single range of product has various types, designs and is also priced differently.

Depth: Varieties in products

Depth of products in healthcare sector at GE is closely related to the length of the products. That is to put in a simplified manner, the total number of products that are available under a single variety may be called the depth of products (Klemperer 2016). For example, Healthcare at GE produces medicines. Now the types of medicines that are produced like inhalers, pills, balms, digestive liquids and many more are the depth of products or product variations at GE healthcare.

Consistency:

At GE healthcare, the consistency of the products is not too high (Sukcharoensin 2017). Owing to the varied range of the product that the company manufactures, the consistency of the product range is harmed. Health care services at GE not only deals with manufacturing drugs but also with varied other products like inventing technologies to serve customers better, researching in the medical field, making innovations, producing and innovating medical equipments like CT scanners, MRI machines etc.

Identification of positions identified:

Health care services at General Electric as already discussed deals with a variety of products and product ranges. An application of the four Ps of marketing mix would help to understand the strategies of the company better.

The goods and services produced at GE healthcare are positioned at high quality and high price. The company keeps taking into consideration the quality of the goods and services produced by the company, the prices relatively low (Shen et al., 2016).

Areas of future development:

GE health care can enter into new market with the existing products that would help the company to enhance the market and broaden the market (Mayer et al., 2016). GE healthcare is generally an organization that makes high quality products at high prices. It can strategically develop and make medium quality products and keep the prices reasonable.                                                                             

Relevant differences in each section:

GE healthcare can make market penetration if it modifies the existing products and launch it into the existing market. At the same time, it can develop a market by developing and innovating products. The newly developed and innovated products when enters into the existing market, the market develops. For example, the company can innovate drug that would cure help cure heart blockage without surgery. When new products are launched in new markets diversification occurs. For instance, GE healthcare can enter into new market (overseas) with new products (Sparrow and Makram 2015).

Conclusion and recommendation

It can thus be concluded that GE healthcare has a variety of product ranges and its market is also diversified. The incorporation of different models like the HRM model and competency model within the company helps to analyze further the way healthcare services at GE works. GE has been able to maintain diversification within its products and services. The report critically evaluates the potential outcomes of the GE healthcare services.

On the recommending part, it can be recommended that the company can restructure its human resource department and can focus more on practical experience than educational skills to recruit employees. The company can sustain its position in the market if it tries to capture the majority of the market. For this, the company needs to manufacture medium quality goods in reasonable price, since, this section cover the maximum portion of the market.

Reference List

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Arima, S., Zhang, Y., Akiyama, Y. and Ishizaki, Y., 2017, September. Dynamic scheduling of product-mix production systems of MTS and MTO. In e-Manufacturing and Design Collaboration (eMDC) & Semiconductor Manufacturing (ISSM), 2017 Joint International Symposium on (pp. 1-4). IEEE.

Asiedu, E., 2015. A critical Assessment of the Strategic Position of Melcom within the Retail Industry in Ghana. Journal of Entrepreneurship & Organization Management, 4, p.137.

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Www3.gehealthcare.com. (2018). GE Healthcare. [online] Available at: https://www3.gehealthcare.com/en [Accessed 12 Apr. 2018].

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