Introduction
General electric wasfounded in 1892, as a merger between two major companies named Thomas Houston and EdisonGeneral Electric. General electric has been manufacturing products and providing services since its initiation. The manufacturing products of the company ranges from aircraft engines to medical equipment. In 2004, the top management and executives of General Electric innovated a software system in the company known as Industrial Internet Initiative.
However, there are many benefits of implementing this system as it is a global network which would connect all the data of company, manufacturing machines, employees and related people. Moreover, it also combines the data and analyze it. In addition, the analysis allows to predict solutions and the optimization of customer base operations of General Electric.
Problem statement
The problem that has been faced by the management of the company is that General Electric is basically an industrial machines manufacturing company. Moreover, GE also provides services which are based on analytics and software. However, company wants to analyze that after implementing the Industrial Internet Initiative, whether the company will grow at fast pace or will not be able to produce and provide services at the same pace. Moreover, shifting the company and its operations to ‘internet of thig’ and transferring itself from a successful machine manufacturing company to a software based company, which would require major changes such as modifications in business models and strategies. In addition, as many other companies are also using company’s analytics data, the management wants to be sure if this initiative will allow the company to remain dominant and competitive in the existing market.
Analysis
Porter’s five forces model
Porter’s five forces model is used to analyze the company’s situation. Moreover, it is also used to analyze the competitive strategy of the company. It also highlights the company’s situation in existing market, where the company stands and how much improvement is needed to run the company in future. Following is the detailed analysis on General Electric’s Company:
Buyers’ power:
The buyer’s power of General Electric customers is low, as the company facilitates with unique product offering. Moreover, customers have high switching cost, which indicates low customer churn rate.
On the other hand, service customers of GE have been on contractual basis which includes maintenance of the products and installation of necessary items. Consequently, it has been said that General Electrics have high customer base.
Industry Rivalry:
In the competitive environment, company have a unique infrastructure which deals with both product manufacturing and servicing. Moreover, the strategic partnership with customers as well as suppliers plays an important part in order to fight with industry rivals and remain competitive in the market.
Threats of new entrants:
General Electric is operating in both manufacturing and service markets. Moreover, in manufacturing market, company produces wide variety of products ranging from aircrafts engine from medical equipment. Therefore, it is very difficult for a new entrant to have a vast product line and servicing. Therefore, the threat of new entrants is very low......................
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