General Electric vs. Westinghouse in Large Turbine Generators Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Industry Perspective

Competition plays an important role in heating up the progress and the intense the competition the more effort form the players will emerge. However, General Electric and Westinghouse are significant players in the industry that are keeping the competition intact. This is the reason why the decrease in intensity of the competition will make the financial profitability of the turbine industry at an average pace. However, the profits can be to some extent extraordinary as the power will reside to these two players which will bring significant change in the industry strategic forces.

The decrease in intensity of competition between these two players will allow these two players to focus on their respective market share and carry on with a smooth growth. However, there are certain powers that will be lost however, certain strengths will be gained. The players will be able to focus on enhancing the market share and will not try to make strong efforts on out playing each other. Thus, lack of investments in new technologies and research and development will be made, which will restrict capital outflow and will allow the players and the overall industry to generate profits close to extraordinary.

However, in order to understand the scenario more importantly and effectively the four strategic forces presented my Porter will be used to analyze the strategy which play an important role in shaping the strategy. Thus, these forces will be used to assess the situation and the industry trends after this change which will be more effective and beneficial.

The change in the powers residing to buyers and suppliers and threats from the new entrants and substitutes will be assessed that will guide in understanding the profitability perspective for the industry.

Bargaining Power of Buyers

The industry has two set of buyers that are different in behaviors and approach as well which is why the impact will be different for each of them. The first group of customers are the government regulated deals which are already described by the government and the price and contribution is fixed and no negotiation can occur in this regard. Therefore, the change in the competition or less intensifying the industry competition between the two major players will not impact this segment of buyers.

However, the other segment of investors is very likely to get impacted. Intense competition provide these buyers with the high power to bargain as they only negotiate on one variable which is known as price. Therefore, high discounts will favor these customers and the players will be left with low margins that will force decline in overall profitability of the industry.

However, restraining competition and deciding on a price will help in gaining more strength band the buyers will have less options available with stringent regulations. Therefore, the power of the buyers will decrease and the power to bargain will be lower. The lack or decline in the overall intensity of the competition will; allow small players to offer book prices which will give less chance to the buyers to negotiate and will increase the switching cost as well. Therefore, the buyer’s power to bargain in the investing segment will decline significantly.

Bargaining Power of Suppliers

The overall industry trends suggest that the suppliers are there for the raw materials but the dependency over the suppliers is there as well. However, the overall power to bargain that resides in the suppliers corner is very low and is expected to stay low for a long period of time. The reason to this is the lack of probable options for the suppliers to sell their manufactured product which is only utilized in developing and manufacturing turbines. Besides that, the suppliers have to keep on manufacturing the goods for the industry and will play an integral role in the overall growth and profitability of the industry.

Although the dependency of the manufacturers and the big players over the suppliers is there but the size of the players and lack of options for suppliers mitigate this benefit for suppliers. Furthermore, the size of the suppliers is also very small and there dependency over the turbine users is also a concerning factors as turbines are not readily accepted and are used for specific purpose. This is the reason why the suppliers will be under real threat for a long period of time as they will have to stay connected with the industry and will have to rely on the small margins they are receiving form the industry......................

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