GE-Case Study Case Study Analysis on GE:

GE-Case Study

Case Study Analysis on GE:

In this analysis we have used the strategy of Porters generic Model. This model assists us in critically analyzing the performance of General Electric's. This model gives an in depth analysis of the internal performance of the organization. The generic Model of Michael Porter consists of focusing on three main areas; Cost leadership, Differentiation, focused differentiation. It analysis competitive advantage an organization possess. Every organization is unique in its way and adopts different strategies according to their requirement. Similarly GE has adopted a strategy that best fits the organization. Competition plays a vital role in an industry especially for GE. The main issue that is being faced by GE is that of competition. If competition is handled in a positive way it can result in ample amount of success and GE can capture the market share.

Generic Competitive Analysis

General Electric is a growing organization that needs to strategic manage and plan competitive strategies in order to sustain the market. At this point the organization is facing a very turbulent environment in terms of competition and other factors effecting the organization. However, in order to survive such circumstances the organization needs to plan an effective strategy for the organization.

Generic model of Michael Porter focuses on the pricing strategy for an organization. Mainly organizations either follow a cost effective or a differentiation strategy. Cost leadership strategy is to capture a market share by providing customers with low price. However, on the other hand the Differentiation strategy focuses on charging premium price for a product that is difficult to substitute and has unique features.

Emerging in new market like GE it is suggested to follow the cost leadership strategy. This strategy focuses on penetrating the marketing and capture massive market share by introducing low cost product. By offering products at low prices, consumers are more likely to try the product. This technique assists in getting consumers use to a new brand or product. Just like in the case of GE if they are emphasizing on capturing the market of china and India, low price would attract the consumers. Consumers are willing to try something that is not domestically made at low price; it gives them an incentive to take the risk on purchasing a new product. Another advantage of cost leadership is that it increases the volume of sales. Low cost products become famous easily and sales are usually high of low cost product. Cost leadership relies on the fact that even though it is being sold at low price if the volume is increased it will cover up for the less price charged by the company. In order for GE to improve its market share and to increase the price of its share that is to increase the value for shareholders it should focus on increasing the sales. As the price of product will go down, consumers will increase and the market share will increase, this will increase the value of GE's share price. Henceforth the shareholders of the company will be glad and the market value of the organization will increase.

When entering a new international market the target audience is broad this supports the implementation of low cost strategy. Whereas, differentiation also falls under broad target, the organization like GE which has a wide range of consumer can also use the differentiation strategy. This strategy focuses on offering something to the consumers that has unique features. Uniqueness can be in terms of anything such as product quality, branding, packing or any attribute associated with the product. GE is entering Indian and Chinese market, they have a wide range of consumers henceforth the strategy of differentiation can be effective. The Culture difference already persists and product differentiation can be accomplished easily.

Many organizations like GE that are involved in products that serve a wide range of consumer and offer a wide range of product line usually get stuck in middle of strategies. Mostly companies are stuck in between cost leadership and differentiation strategy. This results in failure of a company. This is because both the strategies are totally on a different path. Cost leadership strategy focuses on offering products at low cost whereas the differentiation focuses on offering products on premium price with unique product features.

However, some organizations use strategy that encompasses both the low cost, low price with differentiation. This strategy of combining all these factors is known as Hybrid strategy. It is effective to offer low cost with differentiation in order to imply the hybrid strategy. Usually hybrid strategy is used when the market is price sensitive rather than focus on quality. I the case of GE hybrid strategy would result in success for the company. The company can focus on keeping the cost low and price low while offering price differentiation due to excessive amount of research that the company focuses on.

The risk of this strategy:

Expanding a business in international market is a very challenging task. It also has high level of risk associated with it, henceforth it contains high amount of profit as well. GE is already in a very critical situation. When emerging in new market an organization has many threats that need to be dealt with. The environmental factor and the culture of a new place also affect the organizations performance.

GE emerging in Indian and Chinese marketing is a challenging task. This is because both these countries hold a massive market due to the population. Whereas, both the countries have their own products that are cheap, reliable and the consumers are already familiar with. China is known worldwide for making reliable and price effective products due to which penetrating in these market is not an easy task. The strategy should be really strong to enter these markets.

Steps GE should take to protect international growth:

Growth is a vital part of an organization. Appropriate steps need to be taken in order to sustain the international growth and protect the market. In international market there are varies factors that are constantly a threat for an organization. Strategically planning is highly important to sustain international market. Focus and strategy be overcome factors such as the needs of the people and culture differences are some of the common factors.

Proactive approach should be taken by GE to avoid effect on the profitability of the organization. Analyze the factor of a foreign company to stay ahead of the competition, constant focus should also be on market research to get the feedback on the consumers. Stay proactive about the political changes or law and order situation on the country to avoid any drastic changes that might hinder the performance of an organization.