GE is a company that consists of valuation, yield and growth. GE is very diverse and has 6 segments which include Energy infrastructure, aviation, healthcare, transportation, home, and business solutions and GE capital. Each part provides important products and solutions for the growth of the global economy.
GE’s healthcare area contains medical diagnostic equipment, disease research, drug discovery, and biopharmaceutical manufacturing technologies. Some of the healthcare strategies that GE uses expands its margin to include digital services and top of the line imaging. They strive to be the leader in market solution, GE wants to be the company of choice when it comes to the access of affordable care. GE also wants to expand its life science division, digital growth as well as cash and capital allocation.
(GE healthcare)Level of Diversification GE is compiled of related diversification with many assorted products with inter related parts. Something that all of GE’s products have in common are innovation. GE uses innovation, technology, globalization as well as customer service as its main concentration when making all of its products. The products that GE have cover a large market. They all consist of these core values. When taking on a new product GE makes sure to apply the GE technology and management mastery to grow the company. A strength that GE has is ordering to be able to form an idea about the future, with trend identifiers, new ways are developed for the company’s growth. Growth is the goal, while considering its core competencies which are being built at GE.
Through globalization every growth idea is multiplied by how effective the outcome is. GE has a multidivisional organizational structure. Here is where management will put emphasis on supporting separate but interconnected operations in the various industries. GE’s divisions have officers that put in place different strategies, that are relevant to corresponding industries and markets. Here the corporate structure shows how effective GE is in diversification and in looking at specific problems in the industry. The structure of the company is important to the success and growth of the leading industries in markets around the world. Some key characteristics of GEs corporate structure are: Business type divisions, organizations corporate teams and geographical divisions. (Ashkenas, 2015)EvaluationTaking the diversification approach can gain financial advantages for one’s company.
If a business enters a joint ordeal or has other companies join in, profits can be increased as well as cash flow and the power to borrow. If a company decides to become involved with other companies to diversify the company’s strategy, one must be careful to weigh all the options again, and the return that comes from your investment. A positive way to build your company can by making it diverse and increase in the market share. Introducing new products as well as exploring new areas and targeting new customers can help grow the company also. Either of these routes allows one to be more easily seen to competition, changes in what customers prefer as well as seeing products or services do away due to recent technology.
Using diverse strategies costs money and there is no guarantee that these strategies may even work. A diverse strategy can help when it comes to growth, employees, profits or sales. Diversity sometimes can lead to risks of not being able to manage all activities all at one time. These issues can take away from profits. One reason to diversify is to protect the business from failing.
If the first product fails, then the next products may follow through. Successful marketing may uncover some opportunities that may slow sales in the area. This risk has a cost. This may lead to spending money on things that do not pay off. Even though other ways might make up for money that was wasted, one might want to consider a less diverse strategy that focuses on the efforts that are most beneficial.
(Diversification strategies)International Operations”Some of GE competitors include 3M (MMM), Honeywell, United Technologies, Danaher, Mitsubishi Corp/S, CK Hutchinson, Hitachi, Sumitomo Corp, China Resources Beer Holdings Co Ltd, Marubeni Corp, Icahn Enterprises, KPN, Bunzl, Orkla Group, and Leaucadia national”. (NYSE:GE)Similarities & DifferencesGE competes with a variety of U.S. and non-U.S.
manufactures and service providers. “Some of the key factors that affect competition for these products and services are technological competence and innovation, excellence in design, high product performance, quality of services and competitive pricing”. Products and services are sold all over the world mostly to hospitals, medical facilities, pharmaceutical and biotechnology companies, and to life science research. GE operates in an environment that is competitive. Some of GE competitors are investment banks, leasing companies, and finance companies for manufacturers and independent finance companies.
Most recently there has been a barrier in capital markets, as well as access to available capital. Competitors in the equity portion of business is based on price, and competition in the lending area is primarily based on interest rates and fees, also included are structure and terms. While GE completes all over the world, success is sensitive to the economy and political area of each country that business is done in. (GE comment on competitors)GE and Siemen’s have grown more similar in the recent years. For GE buying the company represents a chance to achieve a stronger presence in Siemen’s home. GE earns 17 percent of revenue in Europe while Siemens brings in 30 percent of its funding from the United States. (Siemens vs. GE)Recent EventsGE capital services is a company to learn from.
This organization has made more than 100 acquisitions in the past five years, this lead to a 30% increase in the workforce and fast globalization in its business, which helped grow the company’s net income. GE capital has worked hard to make acquisition integration a core capability and a competitive advantage that will continue the company’s growth in the future. GE capital has made a model for acquisition integration. The model has been fine-tuned through the workshops with GE’s many acquisition experts, it has been applied to several successful recent integration efforts.
GE is comprised of dozens of acquisitions that have blended into one form of the world’s largest financial service organizations. Acquisitions come in different shapes sizes. Sometimes the acquisition is a portfolio that adds volume to a business without the people. Sometimes a company is purchased and then broken down into an existing GE capital business. This happened with GE capital vendor financial services bought Chase Manhattan banks leasing business. Sometimes the acquisition needs to move into a new area, and a new GE business comes about.
Sometimes the acquisition is hybrid, part of it fits into one or more existing business while other parts might stand alone or become come together. (Growth Acquisition)EvaluationMany large firms have established offices for business development to obtain corporate growth strategies through acquisition. The experienced buyers search for companies that fir their defined acquisition requirements. In many cases they are attempting to buy companies that are not actually for sale. The win for the successful corporate entity is to have several candidates, buy them in large numbers, compiled of strength while achieving strategic performance.
The core principal that runs through almost every acquisition is integration. There are many categories of strategic acquisition that can produce outstanding results by: acquiring customers, operating leverage, capitalize on company strength, cover a weakness, buy a low cost supplier, improve or completing a product line, technology, and acquisition to provide scale and access to capital markets, protect and spread the product lines, while protecting customer base from competition, and acquisition to remove barriers to entry. (Merger and Acquisition)Alliance or Joint VentureOne of the most unique ways that a company can assess the failure or success of an individual strategic business unit is to use the GE model. GE uses a simple diagram to define each business unit’s importance, and the strength overall within the industry. These two criteria will form the basis of an analysis that allows GE to assess long-term strategic business unit.
An assessment of each unit’s attractiveness and strength must be viewed to grade performance and to see which are not successful and therefore should be deleted. (strategic business unit)ConclusionGE is quite a profitable company, seems as if they have perfected the craft of business. They have found several ways to take over several different markets simply by being innovative. When it comes to collaborating or buying a company out, GE can take care of that as well. GE has strategies in place to measure performance as well. GE is a major deal when it comes to technology and innovation.
ReferencesGE Healthcare retrieved fro