GE External Analysis: Appliances for Consumers
General Electric (GE) is a conglomerate company with many different product line divisions; all which help the company and their bottom line. In this external analysis the consumer appliance division GE will be the main focus. GE has been a continuous leader of the appliance industry since 1907; GE continues to introduce new products with advanced technology that enhance and improve their customers lifestyles. GE's mission for their consumer appliance industry is; "Answering real-life needs. Defining trends. Simplifying routines. And upgrading the look and feel of the living space." The company contributes their success in the consumer appliance industry to, "GE's forward thinking tradition that has been with the company for over 100 years has helped GE appliances sync perfectly with the modern lifestyle."
In examining GE's external environment, and focusing on the threats and opportunities the company faces, this analysis will use two frameworks Porters Five Force Model and PESTEL. The following paragraphs will use Porters Five Force model to break apart GE consumer appliance industry and help identify the threats that GE faces in regards to, the threat of new entrants, rivalry, substitutes, suppliers and finally buyers. The threat of entry: The overall threat of new entry for GE is low. The major reason that GE has an edge over new entrants is because the company has been in the appliance industry for over 100 years, they have a major learning curve advantage over competitors. With GE's amount of time in the industry comes lots of investment in R&D that is expensive, thus it helps give the company an edge that not many new competitors can compete with. GE is a very strong brand that has earned their name, because customers can trust the products they buy from GE this has created brand loyalty for the company; this brand loyalty is hard for competitors to compete with. Threat of Rivalry: The overall threat of rivalry for GE is high. The competition in the appliance industry is very high because appliances are a commodity for most individuals. The appliances that GE and each of their competitors make are very similar to one another; with very few features that are different or make one product stand out over another. Thus it is hard for appliance companies to het their product to sell over another's. The government tries to limit the competition in the industry by placing rules and regulations over the appliance industry that companies must follow if they want to be able to sell their products in the open marketplace. Threat of Substitutes: The overall threat of substitutes for GE is very high. While not many individuals today would give up there washing machines or dryers to go to a laundry mat to do their laundry; or go to a restaurant for every meal to get away from needing a refrigerator, stove/oven, or dishwasher at home. The threat of substitutes is not high in finding ways to replace the need for home appliances, but rather in the way that there are of lots of competitors who make the same products that will do the same thing; some maybe even better than GE. In the appliance industry GE's major rivals are Maytag, LG, Kenmore, Electrolux, Frigidaire, and Viking. Each one of these companies make the same types of products that GE makes. GE must make sure that they are staying ahead of the competition with their product features so that a consumer does not choose a competitor's product, over GE's because of a feature the competitor has that GE does not. Threat of Suppliers: The overall threat of suppliers for GE is low. Although GE uses one of the largest manufacturers of appliances in the world, GE has worked with the company for years and has created a good relationship with them. GE shares with their suppliers and manufacturers information about their technology and knowledge in the industry so that they can help GE create their products. Because the...
Cited: Appliances & HVACR. (2013). Retrieved 09 27, 2013, from CSA Group: http://www.csagroup.org/de/de/industries/appliances-hvacr
GE Energy Efficient Appliances. (2013). Retrieved September 27, 2013, from GE Appliances: http://www.geappliances.com/energy-star-appliances/
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