Ge Globalization Strategies: Close Analysis

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GE Globalization Strategies
Close Analysis

Global Management: D1125

This report talks about the successful strategies adopted by GE that was accountable for its success. It will start by answering the question the importance of studying GE recent globalization strategies and practices, and then, by giving a quick background of the company globalization process evolution. After that, the report will demonstrate a close analysis to 4 main strategies of the company. Finally a conclusion will be given based upon the current challenges and future perspective.

Company Highlights

GE was found by Thomas Edison in 1893. It has around 343,000 employees and operation over 100 countries. The company experienced continuous growth during the last 15 years in many different aspects, and currently it is known with a wide market diversification to include industry infrastructure, industry, healthcare, financial services, entertainment and media. The company is featured in many different dimensions. According to Forbes Global 2000 ranking, GE is the largest company in the world in terms of unit sales (Forbes, April 2009), as well as number one in the list of “Most Admired Companies in America” and in the whole world (Fortune 2006). In addition to that, globally, GE brand is considered to be the fourth in most recognized brands (BusinessWeek 2009).

Importance of the Study

From the few facts mentioned above, I believe that it’s important to study this business leader’s successful strategies for two main reasons: 1-To study how GE strategies and initiative distinguished player in the business world 2-The consequences of these strategies won’t only influence the success of GE, but it will also act as a road map encouraging many other companies to catch up with this new business model of competition.

GE Globalization Process

Since post 9/11 attacks, the world experienced some drastic changes that influenced the nature of the market environment. High oil prices that went up around $150 (figure 1) had a strong impact on the industry, and increasing prices of consumer products. Also, market saturation in the developed countries slowed businesses growth pace and limited business expansion. Consequently, the business model GE as well as other industrial manufactured have followed of making high end products at their home lands and then exporting it to rich nations no longer worked. The market trend went more globalized and the emerging markets started to be more attractive.
Through the last few decades GE was in active Globalization process. It is believed that GE progress towards globalization was done in four major steps as shown in the figure 2. To accomplish these shifts from every phase GE has to develop various strategies and initiatives to be at the top of competition pyramid. To limit the report scope and in order to analyze to a certain depth, the research will focus on 4 major strategies adopted by General Electric to meet some economical challenges and they are as follow:

1.Lateral Diversification
2.Focus on Growth
3.Emerging Market Penetration
4.Changing Business Directions

1.Lateral Diversification Strategy

By looking at the last 50 years of GE history (figure 3), it’s clear how the company was tuning its business focus. Diversifying GE products and markets could help GE to enter new markets and industries and increase its economy of scale and scope and hence stretching Figure 3: GE Market Share Evolution, Source: Dan Henson, “Growth as a Process” (2007

itself to reach further customers and further globalize.

And in order to do this product and industry diversification, GE has invested into two main processes; to grow organically, and acquire more companies through acquisitions.

Organic Growth
The importance of this type of growth was empower the innovation from the within GE by developing new technologies. This section will be discussed in the “Focus on Growth”...
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