General Electric

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2. General Electric uses a multifaceted approach to help make them one of the industries leaders in engine production. This approach includes resources both financially and managerially. Financially General Electric has invested $50 million in new engine technology, with an additional $1.2 billion to $1.4 billion being required to help them bring new engine designs to the forefront. General Electric has also received a $20 million grant from NASA in order for them to create the first tester UDF engine. General Electric’s Aircraft Engine Business Group (AEBG) manages the production of GE’s engine technology. AEBG has successfully put together a list of resources including Boeing, McDonnell Douglas, and others in an attempt to put their engine group at the front of the market. According to industry segmentation models, General Electric’s AEBG occupies around $4.7 billion in revenue sales. Using the segmentation model it is also clear that AEBG’s profitability is net yearly earnings of $381 thousand. In order to develop a good product, AEBG spends a lot of time making sure that the area of research and development is given close attention. AEBG invested 20% of its total revenue in company funded research and development, which is a high amount, even in the high technology sector of aircraft engines. To properly develop the new UDF engine, General Electric will have to spend $1.2 billion to $1.5 billion. This is after an initial investment of $50 million. General Electric will be able to use their AEBG division as a vital resource in making the UDF engine a real possibility. GE will also take advantage of their current relationships with major companies like NASA, Boeing, and McDonnell Douglas to help with the production and development of their new UDF engine. General Electric can afford this venture if it sells well enough early to overcome the initial investment. In order to successfully do this 400 aircraft would have to be sold within the first...
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