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AGENDA• Introduction• General Electric (GE)• GE Business Units• Modified SOWT Analysis• GE Update• Conclusion• Recommendations• Quiz
GENERAL ELECTRIC• CEO: Jeffrey Immelt• 2010, GE ranked #1 in healthcare and #19 overall on Fast Companys list of the worlds top 50 most innovative companies.• In 2010, GE was named in Ethispheres list of the worlds most ethical companies.• In 2010, GE was named in Business Weeks list of the worlds 25 most inventive companies.• In 2010, GE ranked among Fortune magazines listing of the Most Admired Companies in the World for its 5th consecutive year.• Fortune ranked GE among its list of the worlds top companies for leaders.
GENERAL ELECTRIC Business Units Aviation Energy Finance Consumer Media & Oil & Gas Water Entertainment ConsumerFinance Business Electronics Healthcare Rail Appliances Software & Electrical Lighting Services Distribution
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 se rvice was one of the few sources of differentiation.– Development of suppliers in low-cost countries.
OPPORTUNITIES• Personalized Medicine -Genomics and Healthcare Information Technology (IT)• Customer Relationship Management• After-Sales Services• Used Equipment Buying Program• Management through Diversity• Talent Retention and Attraction• Acquisition of Chinese Assemblers
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 ultimate 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” p olicy so as to focus squarely on the Chinese market?• Technological changes personalized diagnostics – Genomics and healthcare information technology
Alternatives PROS CONS - Aging and Growth rate - Reduction of Prices of Population - Low Prices Strategy - Economic of Scales"In China for China" - Reputation of GEMS - Low Cost Labor Force - Not enough suppliers Modifying the GPC - Low Fixed Cost - Competitors in the -Market Gain Market (Siemens)business model to be - A great number of - Good Government assembler and trading introduce in the Relationship Chinese Companies Chinese Market. - Access to Cheap - Competition among Materials GEMS teams to become the “Center of - Exports Opportunities Excellence” - Governmental Regulations.
Alternatives PROS CONS - Update with Market -Swift of Human Changes. Resources ExpertiseIntroducing Genomics - Medicine of the Future -Slow Return on Investment Diversification - Easy Capture of Talented Biomedical -Difficult Regulatory Future-Oriented Process - Accomplishing diversification strategy -Require strategy Pharmaceutical - Reduce numbers of collaboration competitors -Ethical Issues - Opportunity to develop new services and equipments 20% high operating Margin
Alternatives PROS CONS -High Investment in - Be ahead of Research and Competitors Development - Achieve a Competitive -Developing strong Advantage. relationship with customer is costly - Accomplishing Developing Innovation -Developing new SalesHealthcare IT Strategies for this - Diversification Strategy different business unit demand time and more sales force. -Fragmented Market due to Competitors participation
Alternatives PROS CONS - Profitable Market - Reputation of GEMS Opportunity -Ethical issues -Opportunity to develop Maintenance Service - Customers willing to Program pay for used equipmentsUsed Equipment - Alternatives Sales - Strong CustomerProfitable Market Options for those cost Relationship is needed Development efficient Customer focus to accomplish this strategy - Capture of a new Market focused in used - Sophisticated equipment Information System to manage the market - No competition from World Leaders in Healthcare.
Alternatives PROS CONS - Increase profitability - Require more Human through services fee Resources (technicians) - Develop strong - Acquisition of an customer relationship efficient and effective CRM systemDeveloping a Strong - Customer Retention Service and - Customer Service is Reparation - Diversification Strategy one of the most difficultProgram/Modifying departments to manage GEMS general and coordinate Business Strategy - Ineffective Customer Service would reduce GEMS general reputation in the market.
EXPLORING OTHERS POTENTIAL INDUSTRIAL MARKETS IN ASIAIndia 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.
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).
CONCLUSIONS• Changes in the industry – Creation of GEMS Selling products abroad Design and production• Services as an opportunity for business diversification and differ entiation• The core competencies of the company are presented by the fo llowing elements. – Value chain management – Innovation – Management of global operations.• Successful acquisition policy.• General Electric manages its worldwide long term relationships 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 technological deve lopment worldwide.
CONCLUSIONS• Competitors were far behind GEMS in terms of profitability, mar ket share and innovation, but the fact that they accept often lowe r margins keeps cost pressure for GEMS alive.• GEMS developed a complex and efficient business strategy th at allowed them to be ranked as the world’s leading company in healthcare technological equipment.
RECOMMENDATIONS• To reduce costs not just by moving operation facilities to low cost countries, but also by outsourcing other components 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 exa mple, developing Healthcare IT.• Diversify the lines of services offered, for instance by the intr oduction of reparation services as part of the services depar tment.• To implement innovative adding value strategies, such as “g reen” actions, in order to differentiate from competitors.• Introducing Genomics as a long term strategy more focused on biomedical science than in the engineering science.