General Electric’s Corporate Strategy Analysis Essay

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General Electric (GE) is one of the most successful American corporations. The firm has five unique businesses. The firm has “a five-initiative strategy that improves its profitability” (Inkpen 2). This essay gives a detailed analysis of GE’s corporate strategy.

VRIO Framework

GE’s Corporate Strategy
Valuable?Rare?Costly to imitate?Is GE organized to exploit its strategy?
YesYesYesYes
GE has a sustained competitive advantage

General Electric’s corporate strategy is sustainable. The firm addresses the changing needs of different customers using modern technologies. The company supports every successful segment. GE’s strategy is also rare. The firm’s core businesses are managed using appropriate financial initiatives. Every business part collaborates with the other segments in order to deliver the best results (Owen 3). It is costly to imitate GE’s strategy. GE uses modern technologies and ideas in order to offer quality services. The firm’s culture focuses on continued improvement in order to get good results. The firm is also organized to exploit its strategy.

SWOT Analysis

Strengths
  • GE has seven successful business segments.
  • GE has the best internal leadership.
  • The firm’s corporate culture supports its strategy (Inkpen 7).
  • It has a mission-oriented team.
  • GE has adequate financial strength.
Weaknesses
  • It has to focus on different business segments.
  • GE focuses on business partners instead of specific consumers.
Opportunities
  • The current economy will support its strategy.
  • GE has a reputable past.
  • It attracts many people with the targeted skills.
  • Acquisition of new businesses.
  • Availability of new markets.
Threats
  • Increasing level of competition.
  • Unpredictability of some of its business segments.
  • Changing nature of technology.

PESTEL Analysis

Political

GE deals with numerous political issues because it operates in many nations. Government intervention is high in nations such as China. The political climate experienced in the US supports its goals.

Economic

Global exchange rates and inflations affect the firm’s financial performance (Lane 49). Economic policies affect the company’s profitability in different countries.

Social Factors

GE must adapt to various cultural aspects in different nations. For instance, GE has “unique working hours, procedures, and employment patterns in every nation” (Lane 82).

Technological Factors

The firm embraces new technologies depending on the needs of its customers. GE uses such technologies in order to remain competitive (O’Boyle 87).

Environmental

GE embraces modern practices in order to conserve the natural environment. It also embraces the use of renewable sources of energy (Jacques 82). It uses modern technologies to improve its drilling practices.

Legal

GE complies with numerous legal provisions across the globe (Jacques 61). The firm operates in 120 nations. It also complies with various international policies in order to remain successful.

Porter’s Five Forces Model

New Entrants

General Electric is a sustainable company. It operates in many segments thus discouraging more companies from joining the industry. The threat of new entrants is also low.

Threat of substitute services/products

GE’s business segments are characterized by different goods. However, it uses modern technologies in order to deliver quality products. This strategy reduces the threat of new goods.

Bargaining power of suppliers

GE collaborates with many suppliers. Such suppliers determine the success of GE’s business functions (Heller 54). GE is also a leading supplier.

Bargaining power of buyers

GE does not market its products to customers directly. This strategy reduces the bargaining power of its customers.

Competitive rivalry

The level of competition is moderate. GE uses new strategies and technologies in order to manufacture competitive products. The strategy makes it a leading player in the industry.

Works Cited

Heller, Robert. Jack Welch, New York: Dorling Kindersley Publishers, 2001. Print.

Inkpen, Andrew. “General Electric’s Corporate Strategy.” Thunderbird: School of Global Management 1.1 (2014): 1-16. Print.

Jacques, Vincent. International outsourcing strategy and competitiveness, New York: Editions Publibook, 2012. Print.

Lane, Bill. Jacked Up: The Inside Story of How Jack Welch Talked GE Into Becoming the World’s Greatest Company, New York: McGraw Hill, 2008. Print.

O’Boyle, Thomas. At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit, New York: Knopf Doubleday Publishing Group, 2011. Print.

Owen, Brandon 2014, The Rise of Distributed Power. Web.

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