Ge: Strategy Essay

1464 words - 6 pages

Running head: GE STRATEGIC ANALYSIS

Strategic Analysis


Every organization needs to have ways in which they can meet their objectives. This is needed to demonstrate to shareholders that they have a plan in which they will be using the capital resources that were provided to the firm in a profitable and ethical manner. This is most commonly done through strategic planning. Many firms devote a lot of time and effort into this initiative in order to prove, or demonstrate, to their shareholders that they are indeed using the injected capital wisely in efforts to generate a profitable return. One of the most popular organizations to undertake such an intense endeavor is General Electric ...view middle of the document...

John “Jack” Welch started a mantra within GE that is still implemented today, explaining that GE should be number one or number two in the market they operate within, or they should get out of the market. During GE’s strategy sessions, senior leadership will also diagnose the markets in which they operate in. Senior leaders will look at the size and growth rate of the market, potential or existing profitability of the market, pricing capabilities and also their channels of distribution amongst other determinates. In order to be number one or number two in an operating segment, GE must thoroughly know and understand their competitors. Understanding their competitors strengths and weakness, are vital to determining a sound and capable strategy for the upcoming fiscal year. GE will examine its competitors brand awareness, market share, supplier chains and customer loyalty along with a whole host of other categories. These two key fundamental assessments, current market positioning and competitor analysis, are the main drivers towards their strategic planning sessions. These drivers help GE mold their planning into a strategic formation for the upcoming fiscal year. Manderscheid & Kusy (2005) define strategy formation as, “a set of processes involved in creating or determining the strategies of an organization” (p. 62). These drivers are then used for both basic and sophisticated models which help direct future strategic decision making. A famous model created by McKinsey and GE, looks at the strength of the business unit, and market attractiveness. Understanding and communicating these objectives remain critical to the success of the business unit and also the organization at large.

Market
Appeal
Strength of the Business Unit |
| High | Medium | Low |
High | | | |
Medium | | | |
Low | | | |

This model helps visualize the amount of market penetration each business unit has within the market, and can help assess next strategic movement.
Another key strategic cause for growth for GE which has been a staple part of the organization for years is growing through acquisitions and mergers. With GE having such a diverse array of product and service offerings throughout their division lines, this option is always on the table and can help a mature organization continue to grow. MCB UP Limited (2002) notes that all organizations should be mindful that, “the strategy you [the organization] adopts to facilitate growth is merely a means to an end. Never let it turn into the objective as opposed to the tool” (p. 5). After GE has looked at all of the strategic information, senior leadership is now ready to make and present its strategic plan to the rest of the organization and shareholders alike.

Reflections
This author found the strategy planning sessions to be fairly typical of a large, publicly traded firm. The compelling complexity behind GE is how diverse in nature they have...

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