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General Electric - Competitive Environment and Business Level Strategy - Example

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The paper “General Electric - Competitive Environment and Business Level Strategy” is a meaningful variant of the report on management. General Electric is one of the most successful corporations across the globe and has various business units ranging from Home and Business Solutions, GE Capital, Healthcare, Transportation, Energy Infrastructure, as well as in aviation industry…
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Competitive Environment and Business Level Strategy Name Date General Electric General Electric is one of the most successful corporation across the globe and has various business units ranging from Home and Business Solutions, GE Capital, Healthcare, Transportation, Energy Infrastructure, as well as in aviation industry. General Electric has been in operation for over 120 years, and through this, it has been able to create an all-encompassing product portfolio and at the same time inaugurate a dominance in the market in several sectors. However, the company runs under multiple business units which operate independently from each other even though they are held under one umbrella structure of the General Electric operations. According to Raible, Teti, and Brinker (2015) corporation are defined as the type of legal guided entities that institutes policies which in the long run are discrete, as well as, separate when they are compared to its owners since they are legal. For that reason, corporations are different from partnership since it separates the rights and responsibilities of the company from shareholders ever since the company can sue and at the same time have the ability to be sued. Furthermore, corporations have other responsibilities which include the legal ability to pay taxes, own assets, recruit employees, and enter into legally abiding contracts. Above and beyond, General Electric has various product portfolios which are classified under different business units especially in the energy infrastructure and in the aviation industry which has dictated the company progress over the years (Browning, nd Yassine, 2015). With this in mind, various parameters including the operational risk, market leadership, income distributions, profit margin drivers, growth prospects as well as the type of stock available at the company proposal dictates the company progress in the long run. Product and Service portfolio of General Electric Products in General Electric product portfolio ranges from one business unit to another, and they are accompanied by several services that the company offers. The ability of General Electric to provide both the products and services has provided an opportunity for the enterprise to gain a competitive edge in the market. Consequently, general electric have various products and services in its portfolio which have contributed to the company profitability. Martins and Lopes, (2016) indicates that service portfolio is the classification of all the services that a company such as General Electric engages in. It offers aviation, financing including energy financing, real estate, power distribution, energy connection, healthcare, and home services among others (Goswami, Pratap, and Kumar, 2016). The success of General Electric has been as a result of diversified product and service portfolio which has enabled the company to spread its risks (Iancu, and Stanciu, 2016). Business Unit Research Business Unit Identification. As a part of General Electric, Aviation business unit has achieved tremendous success. Even though the company was initially established as an energy based company, it has been able to diversify into others areas by acquiring other business units informs of subsidiaries (Arrfelt, Wiseman, McNamara, and Hult, 2015). The financial resources at the General Electric disposal have enabled the company to dominate various business market segments across the globe. Over the years, General Electric has become one of the most successful companies in the aviation industry since it offers engines to airline companies across the world. It has the ability to manufacture commercial aircraft and military engines and is considered as one of the largest aircraft engine distributor throughout the world. With the strong brand name that general electric has been able to maintain in the market, it has enabled the aviation business unit to grow rapidly, and through this, it has achieved tremendous success. Therefore, the aviation business unit has highly contributed to the growing profitability of general electric especially given that it covers various components in the airline industry. Strategic Business Unit Aviation is a single strategic business unit under General Unit and can be considered as one of the most profitable business ventures under the company management. According to Kownatzki, Walter, Floyd, and Lechner, (2013) strategic business unit operates independently from others business units within the company. In this case, the strategic business unit is the business venture that operates autonomously when compared to other business sectors, and in this case, aviation industry requires expertise knowledge in the management and execution of various roles in the airline industry. Without the required expertise, the company cannot be able to succeed (Arrfelt, Wiseman, McNamara, and Hult, 2015). Therefore, as a strategic business unit within the General Electric, the aviation part of business deals with the variety of products and services ranging from military engines to commercial aircraft engines as well as regularly maintaining them. The operations of general electric over the years has further been supported by the fact that the company has become the technology hub where different types of technology are produced and utilized in various business sectors within the company. In relation to commercial solutions, General Electric Aviation offers a variety of products involving the commercial aircraft engines, commercial aircraft systems, and the commercial engine services. Through this, it provides the mechanical systems, electric power, avionics, turboprop engines, general aviation jet, business and military engines. To ensure that it provides better services for its customers and it retains a competitive advantage in the market, General Electric is a leading company in modern technology as well in data analytics which enables the company to produce high-quality products and offer better services to its customers. The Aviation business unit also provides marine-based products and services including turbines which has revolutionized the industry. Identification of Product and Service Lines. General Electric Aviation offers the digital solution to multiple stakeholders in the aviation sector. In this case, the General Electric Aviation offers various product and service lines, and this has enabled the company to gain a competitive edge in the market. In fact, products lines are different product categories that the firm has at its disposal, and this dictates the company progress in the market (Chen, Wu, Zhang, and Dai, 2014). General Electric Aviation product lines comprise of the commercial, military, Digital solution, marine-based products and the business and the general aviation products. On the other hand, the company still offers similar service lines to various product categories that the company offers. The services offered helps in reciprocating the products provided by the company (Ma, Gao, Yang, Ding, Yang, and Song, 2017). Business Unit Revenue General Electric Aviation has various streams of revenues which are guided by the type of products and services in the market. The money generated by the company over a period of time of time which may be classified as monthly, quarterly oven yearly is classified as revenues (Edwards, and Gandy, 2014). General Electric Aviation is one of the most profitable business units in the company particularly as it has been able to acquire a large customer base which has motivated the company to utilize the economies of scale. To be a technology leader in the market enables the General Electric Aviation to have the competitive edge in the market. It can monitor various technological trends in the market including the changes in the customer taste and preferences through data mining and analytics process. As per the year 2016, General Electric Aviation has been able to maintain constant revenues of more than 20 billion US dollars in the last four years. Furthermore, the aviation business Unit generated over 25 billion US dollars in 2015, and this has been as a result of proper market and innovativeness in the market. External Environment Analysis Economical Economic factors dictate any company progress in the market. These are the factors that affect the profitability of the company in the long run. However, General Electric Aviation has huge revenues at which has made the aviation as a business success in the market. Various Parameters affect the success of the General Electric Aviation such as recession, and fuel prices among others. On the other hand, since the company has a variety of customers both in private and public sectors, it helps in diversifying the company risks thereby permitting the company to succeed in the long run (Vining, 2016). Other economic factors such as the economic growth rate, trading activities, poverty and the level of income, inflation, and changes in trading policies affect the company progress in the market. What's more, the government spending across the globe contributes to the profitability of the General Electric Aviation given that a considerable majority of the customers are military and other government-related companies (Zou, Wang, and Wen, 2017). In addition to this, the operation of the business unit is further affected by the money value, exchange rates and the fluctuations in the interest rates. This affects the company profitability as well as the productivity in the long run since economic factors such as inflation along with the deflation affect the company progress over the long term. Political Factors Even though the company is headquartered in the United States, General Electric Aviation is a multinational corporation and therefore is highly affected by various political dimensions since it operates across the borders in most countries (Vining, 2016). Most of the cross-border trade is highly regulated and therefore it is highly affected especially since the General Eclectic Aviation deals with companies across the globe including the government institutions. Therefore, General Electric has handled multiple of political systems which affect its operations since the political systems are structured differently. Some countries are stable politically stable which facilitates the success of the business activities that the General Electric Aviation has (Immelt, 2012). In some countries, there is government intervention while in others there are not especially in the United States where it has dictated the success of the General Electric Aviation. Social-Cultural Being a multinational, General Electric Aviation is profoundly affected by the social-cultural factors. The Social customs, religion, culture and the norms changes from one country to another and this affects the way the company is run. This involves both the organization approach to diversity within the business and the customers' perception from one market to another (Joseph, and Ocasio, 2012). However, since this particular market segment is in the aviation industry, the sale of the engines, as well as, the services offered across the globe are uniform, and therefore the services provided along with the products are rarely affected by these factors. The demand for the company products is uniformly distributed across the globe. However, it is the employees' diversity that affects the company since it is a multinational company and it is exposed to the multicultural environment, and hence there is a need to abide by the current cultural changes. Technological General Electric aviation business segment is one of the most advanced due to the use of modern technology is the company appliances. The changes in technology enable the Aviation to utilize the advanced technology and ensure that the consumer receives the best potential products and services in the market. However, changes in technology are costly to implement given that it may require the company to alter major processes within the enterprise. Furthermore, over the years, General Electric has been able to use modern technology to gain the competitive advantage in the market. Environmental Some of the major component that general electric aviation uses includes gas and oil which are major environmental polluters. Therefore, all the company operation must be structured in a way that they are streamlined according to the international standards. Legal With its presence in over 100 countries, General Electric Aviation must abide by the existing legal requirements in the market. General Electric deals with different countries across the globe which call for legal compliance in all its operations and must maintain the required standards in the international market. Operating Environment Operating environment is the kind of the atmosphere that the company carries it business activities in. Therefore, are the conditions that an enterprise conducts its operations. This may include the internal environment and also incorporate the external environment mostly dictated by the competitive environment. In this case, it also includes the legal, economic, political, technological, and environmental and the social, cultural environment. The way a company approaches the operating enforcement sets the tone for its long-term success in the long run. Source of Sustainable Competitive Advantage The sources of sustainable competitive advantage are the business elements that gives the company an edge over the others in the market (Rahab, Anwar, and Edy Priyono, 2016). It is the tendency of a company to develop certain attributes which enable such a company to gain a competitive edge in the market. In most cases, the causes of sustainable competitive advantage include the ability of the company to utilize the human resources as well as the complete use of the natural resources at the company disposal. The source of sustainable advantage for the General Electric aviation is the use of modern technology. Furthermore, the business unit has been able to utilize effective leadership and at the same time have the resources available to carry out various researches. Technology General Electric Aviation can invent and apply creativity to improve its current status in the market. In fact, General Electric Aviation is the most creative company across the globe and has been able to produce the superior product in the market (Gollay, Gollay, Shindina, Salimonenko, and Chuvashova, 2016|. Through this, the company has been able to use the modern technology as a significant sustainable competitive advantage. This has been in the form of energy, as well as, the industrial machinery which has made the aviation sector more superior. The research and the development process The success of the General Electric Aviation has been based on the ability of the company to enhance or improve the products, introduce new product or services in the market and at the same time apply creativity in the market (Huang, Dyerson, Wu, and Harindranath, 2015). This has made the business unit a success in the past and had the edge over the others in the aviation industry. Strong brand, intellectual property, and more advanced products General Electric as a company has been able to consolidate the reputation of a company which has created as the innovative company, and this has created a positive reputation for the enterprise. Having operated for more than 100 years, General Electric has been able to use the intellectual properties as well as its products to gain a competitive edge over the others in the market (Liu, 2013). It has been able to deviate into other areas which have cemented its position in the market as one of the most successful companies across the globe, and this has been one of the chief rationales as to why it has been to consolidate its position in the market. Organization culture and structure General Electric operates various autonomous business units independently which gives a unique approach to the market. It has been able to maintain a unique culture, and through this, it has been able to utilize human resources as one of its core elements and has been crucial to the company success in the market. In fact, it has been creating the unique culture across the globe which has been utilized by all its subsidiaries (Raible, Teti, and Brinker 2015). This is similar to the operation of the General Electric Aviation, and even though it has autonomy as a business unit, the culture of the company dictates its operations. This includes its approach to the employees and the way they are utilized to cement the company position in the market. Strategic Direction The strategic direction of the company are actions undertaken by the company in the process of attaining the set company goals in the long run. Therefore, for General Electric Aviation to succeed in the market, it must ensure that it continuously utilizes the culture of innovation that it has created especially given that competition has intensified in the market and therefore there is a need to promote innovation in the workplace. Technology has defined the success of the General Electric Aviation, and therefore it should uninterruptedly invest in the research process to ensure that it can follow a particular strategic direction in the long. Therefore, the strategic direction should be dictated by the innovation and creativity. Those in the aviation industry are always in search for better and more advanced products to help in improving the security as well as the proficiency of the airplanes. Over the years, General Electric Aviation has been able to consolidate its place in the market as one of the market leaders which deals which aviation related products and services and to ensure that it retains its position in the market, it must apply its strengths in the market (Warwick, 2014). Having acquired a tag of the technology hub in the market, there is a growing need for General Electric to consistently use the modern technology to increase its dominance in the market. This will also help in giving the company the competitive edge over the years in the market. Besides, it is also of equal importance to ensure that the corporation retains the human resources which is one of the essential elements for the company success in the past. High employee's turnover affects the long-term performance of the company and to avoid such a scenario, it is important to consistently motivate employees and through this ensure that they are highly efficient in the long run. Most companies fail due to their inability to drive and ensure that they retain the employees who are one of the most critical assets at the General Electric Aviation disposal. References Arrfelt, M., Wiseman, R.M., McNamara, G. and Hult, G.T.M., 2015. Examining a key corporate role: The influence of capital allocation competency on business unit performance. Strategic Management Journal, 36(7), pp.1017-1034. Arrfelt, M., Wiseman, R.M., McNamara, G. and Hult, G.T.M., 2015. Examining a key corporate role: The influence of capital allocation competency on business unit performance. Strategic Management Journal, 36(7), pp.1017-1034. Browning, T.R. and Yassine, A.A., 2015. Managing a portfolio of product development projects under resource constraints. Decision Sciences. Chen, S., Wu, S., Zhang, X. and Dai, H., 2014. An evolutionary approach for product line adaptation. International Journal of Production Research, 52(20), pp.5932-5944. Edwards, R. and Gandy, A., 2014. Navigating the M-Form: Product Scope Review and the development of the General Electric Computer Department. Business History, 56(8), pp.1361-1379. Gollay, I.N., Gollay, A.V., Shindina, T.A., Salimonenko, E.N. and Chuvashova, A.D., 2016. Priority areas of analysis of the external environment of a company-innovator depending on a type of introduced innovations. Polish Journal of Management Studies, 13(2). Goswami, M., Pratap, S. and Kumar, S.K., 2016. An integrated Bayesian-Game theoretic approach for product portfolio planning of a multi-attributed product in a duopolistic market. International Journal of Production Research, 54(23), pp.6997-7013. Huang, K.F., Dyerson, R., Wu, L.Y. and Harindranath, G., 2015. From temporary competitive advantage to sustainable competitive advantage. British Journal of Management, 26(4), pp.617-636. Iancu, I. and Stanciu, I., 2016. ONLINE PROMOTION OF FINANCIAL INVESTMENT SERVICES COMPANIES. Annals of the University of Oradea, Economic Science Series, 25(2). Immelt, J.R., 2012. The CEO of general electric on sparking an American manufacturing renewal. Human Resource Management International Digest, 20(6). Joseph, J. and Ocasio, W., 2012. Architecture, attention, and adaptation in the multibusiness firm: General electric from 1951 to 2001. Strategic Management Journal, 33(6), pp.633-660. Kownatzki, M., Walter, J., Floyd, S.W. and Lechner, C., 2013. Corporate control and the speed of strategic business unit decision making. Academy of Management Journal, 56(5), pp.1295-1324. Liu, Y., 2013. Sustainable competitive advantage in turbulent business environments. International Journal of Production Research, 51(10), pp.2821-2841. Ma, X., Gao, J., Yang, F., Ding, W., Yang, H. and Song, J., 2017. Integrated power line and visible light communication system compatible with multi-service transmission. IET Communications, 11(1), pp.104-111. Martins, M.M. and Lopes, I.T., 2016. Intellectual capital and profitability: a firm value approach in the European companies. Verslas: teorija ir praktika, 17(3), pp.234-242. Rahab, R., Anwar, N. and Edy Priyono, R., 2016. Effect of core competence on sustainable competitive advantages of Batik Banyumas small and meeium Enterprises. Journal of Comparative International Management, 19(1), p.27. Raible, D.G., Teti, R. and Brinker Jr, T.M., 2015. Is the C Corporation a Better Business Form Than the S Corporation for Today's Entrepreneurs?. Journal of Financial Service Professionals, 69(3), pp.14-17. Vining, A.R., 2016. What Is Public Agency Strategic Analysis (PASA) and How Does It Differ from Public Policy Analysis and Firm Strategy Analysis?. Administrative Sciences, 6(4), p.19. Warwick, G., 2014. Electrifying Aviation: Light aircraft are early targets for the efficiency and safety benefits touted for electric propulsion. Aviation Week & Space Technology, 176(23). Zou, B., Wang, J. and Wen, F., 2017. Optimal investment strategies for distributed generation in distribution networks with real option analysis. IET Generation, Transmission & Distribution, 11(3), pp.804-813. Read More
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