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Being a multinational conglomerate, GE has obtained impressive influence and secured its position at the top of the US economy quite firmly. GE was founded in 1892 and has expanded into a range of markets since, producing energy as its main commodity and having forayed into computing and other areas (GE, 2016). Despite keeping its traditional focus on energy and related products, GE has recently entered the healthcare industry, forming GE Healthcare in 1994 (GE, 2016). However, the company’s foray into the healthcare industry was started much earlier, when GE introduced its MRI scanner into the global market (GE, 2016).
The organization has been manufacturing equipment for medical purposes ever since along with the equipment for other industries. Although GE’s market success has been fluctuating lately, the success of GE Healthcare as one of GE’s affiliates has been steadily positive (GE, 2016). Due to the focus on diversification of its products and the use of a well-developed, vertically and horizontally integrated supply chain, the organization is likely to succeed in the global market.
Level of Diversification
The extent to which GE diversifies its healthcare products is quite sufficient for it to enjoy multiple opportunities in the healthcare market. Ge currently strives to pursue innovation in every domain possible, which reflects GE’s approach toward healthcare product diversification (Balakrishnan & Moonesar, 2015). GE has been making effective use of its multifaceted approach toward diversification for several years, which is an obvious strength since it allows integrating innovative solutions into end products.
However, the weakness of emphasizing the idea of diversification at GE overly zealously may cause the organization to lose its focus and suffer losses as a result (Balakrishnan & Moonesar, 2015). The promotion of intensive growth, which is presently observed at GE, indicates that the organization needs to gain a strategic advantage over its competitors and help GE to build an innovation-based corporate strategy; otherwise, GE will fail to stay in its target market. As a result, GE will have an opportunity to apply a focused approach toward developing its operational systems and management frameworks (Balakrishnan & Moonesar, 2015). Consequently, the firm will gain enough momentum to reach out to new customers and acquire even greater influence as a producer of healthcare equipment.
While GE has been using its full potential in order to achieve success in the healthcare market, other organizations have been posing a threat to GE’s popularity. Due to the vast experience and brand name recognition of its rivals, GE needs to focus on the enhancement of its international operations. The present international strategy used by GE is quite similar to those of its competitors. For example, the companies such as Boston Scientific and Carestream Health have been exploiting the strategy of strategic acquisitions as the platform for improving their international operations and gaining greater influence in the industry (Boston Scientific, 2018).
The described model of international operations aligns with the course that GE has chosen for its development and the attempts at conquering the global healthcare equipment market (Martin, 2018). The identified approach seems legitimate since it gives Carestream Health, Boston Scientific, and GE the opportunities to gain access to new resources and reduce the barriers to entry into the designated marketspace (Blanchette, 2015). However, several distinctive characteristics are exclusive to GE’s rivals.
The differences in supply chain structures set Boston Scientific and Carestream Health apart from GE. Specifically, Carestream Health and Boston Scientific show the tendency to use the hybrid delivery technique, which helps to increase the efficiency of their supply chains and turn the transfer of resources into a more manageable process (Blanchette, 2015). Defined as the application of Internet services to the management of transportation processes across the supply chain, the use of the hybrid delivery approach is believed to be the link between the digital and physical markets (Garmehi, Analoui, Pathan, & Buyya, 2015).
Although GE has been seeking opportunities for the expansion into digital markets as well, the application of the hybrid system has not been the company’s priority so far, which restricts GE’s options concerning international trade (Blanchette, 2015). Therefore, the organization may need to follow suit and make an example of its rivals in order to enter the global market and build a strong supply chain.
With its expansion-targeted policy, GE has acquired and merged with quite a few organizations, increasing its reach and developing a greater grasp on the global healthcare market as its next target. Among the most successful acquisitions that GE has had so far, one should name Baker Hughes, which operated in the Oil and Gas industry, and the famous Alstom acquisition, which marked GE’s slowly transitioning to the digital environment (Lacal-Arántegui, 2019).
Both of the events detailed above are exemplary of successfully performed acquisitions since they opened a plethora of opportunities for GE. The acquisition archetypes that GE follows in each of the described cases can be identified as accelerating market access and exploiting the opportunities that the economies of scale provide (Bertrand, Betschinger, & Settles, 2016). Due to the cost advantages that GE receives in the domain of healthcare, the competitive advantage of the company increases as it receives a greater amount of flexibility in its financial options.
Moreover, the choice of market access acceleration as the expansion strategy has helped GE in diversifying its product and cementing its position in the healthcare equipment market. With lower entry barriers, the company gained a chance to focus on its R&D processes and the development of unique, high-quality technologies that could advance healthcare services greatly (Lacal-Arántegui, 2019). As a result, GE has acquired enough influence to develop an impressive competitive advantage over its rivals.
Alliance or Joint Venture
In addition to acquisitions and mergers, GE has also sought to build strategic alliances and joint ventures. The described step is critical for GE as the method of retaining its influence in the healthcare market and establishing itself as a legitimate provider of healthcare equipment. Furthermore, the support of business partners with which GE may merge will allow the organization to get accustomed to a comparatively new market context and receive the support that it will require to compete with the firms that have a much longer presence in it.
However, the approach that has been known in the business environment as the GE model seems to have worn out its welcome since GE has not been attempting at creating joint ventures in the past few years. According to Gomes-Casseres (2018), the GE model appears to be no longer profitable, hence the need to reshape it and to abstain from creating large conglomerates in the future. So far, the latest joint ventures that GE has made include the joint venture with Hyundai in China (Pomerantz, 2017). Nevertheless, the GE model of building business conglomerates seems to have become obsolete.
Balakrishnan, M. S., & Moonesar, I. A. (2015). General Electric: How GE worked to transform oncology healthcare in the Kingdom. Emerald Emerging Markets Case Studies, 5(3), 1-12. Web.
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