Ge External Environment

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The External Environment

Remote Environment

ĆEconomic:

Today¡¦s mutually dependent global economy is creating new opportunities for growth¡Xand the corresponding challenges of managing that growth responsibly.

In both instances, GE¡¦s size is an advantage. GE is solving big needs for countries that need the broad range of infrastructure, financing and healthcare that economic growth demands.

GE is also solving big needs on behalf of the challenges that face all of us¡Xincluding access to clean water, limited natural resources and the need for more energy-efficient products and services.

The future may be different. The engine of global economic growth has been the U.S. consumer, propelled by historically low interest rates. While consumers are still solid, 17 interest rate increases over the last two and a half years have mellowed them a bit.

ĆSocial:

Since the whole global economic is growing, the consumers will buy more consumption electric product. The governments need more construction.

A profound social change has been the accelerating interest of consumers and employees in quality-of-life issues. GE has advantage at this part. GE is the No.1 of Top 20 Most Admired Companies 2007 selected by Fortune magazine.

ĆPolitical:

GE is a global wide company. They think globally and invest locally. When GE invested China, the direction and stability of political factors are a major consideration. The Iraq War might cause consumers do not want to purchase American product.

GE Infrastructure has most association will governments. Political activity also has both supplier and customer function to GE. They need to be authorized to build a power plant from government. The demand of government infrastructure is huge. This kind of demand only could solve by big company like GE.

ĆTechnological:

GE is one of the most innovated companies in the world. Tomas Edison invented light bulb. GE is good at technological forecasting. At technological part, GE has advantage.

GE¡¦s customers are increasingly using the Internet. Digitization facilitates rapid distribution and knowledge transfer to a fragmented customer base.

GE is positioned to capitalize on digitization. GE has thousands of engines, turbines, locomotives and scanners in our installed base. These have been digitized, so that GE can provide our customers with interactive decision support to boost productivity.

These range from simple online tools to improve a locomotive¡¦s fuel efficiency to a web-based electronic medical record. Today, GE has $4 billion of fast-growth digital services.

In GE Money, GE is originating loans online, which allow us to reach new consumers with tailored offerings. GE is a leader, and could originate $15 billion through the Internet by 2009.

The most important impact of the Internet is in GE¡¦s NBC Universal entertainment business. GE is a leader in content and the Internet opens up new avenues for growth.

ĆEcological:

Recent year, specific concerns include global warming, demand of gas increased, loss of habitat and biodiversity, as well as air, water, and land pollution.

From GE¡¦s press release, GE wins green globe award for water reclamation. In this ecological situation, the Green is big business and GE is working on it.

Industry Environment

ĆThreat of Entry

The threat of new entrants is small. GE as big is beautiful. GE has economies of scale, wild proprietary product differences, well-known brand identity, very huge capital requirements, good switching costs, absolute cost advantages, good relation with government, and extreme learning curve.

GE has multiple businesses which could be seen as GE¡¦s safety net and build highly barrier to the new entrants.

ĆBargaining Power of Suppliers

The bargaining power of suppliers is low. GE has many different industry businesses. GE is huge and has bargaining power to suppliers.

GE also could control...
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