General electric medical systems
Ul Nurkhanov
General Electric Medical Systems
For years GEMS has been exploiting the global product structure which enabled the company to increase its value around the globe. However, this structure has also created challenges within organization and its strategy. With Global product company philosophy, General Electric Medical Systems had made separate joint ventures for CT, X- Ray and ultrasound partnering with regulatory government such as Ministry of Health and the State Drug Administration and their subsidiary manufacturing groups. Due to this, GEMS encountered some challenges associated with these partnerships. Mr. Chen describes that “In one joint venture, partner firm would receive orders for equipment, and then service the orders from its separately and wholly owned factory, thus cutting us out” (GEMS 2002, pg. 14). In addition, according to D. E. Westney and S. Zaheer, the Global product structure has a potential weakness. The structure lacks responsiveness to local needs and local customer needs whose demands don’t fit profile expected by the business unit. Also, it is unable to leverage potential synergies across product lines within a country. (D. E. Westney and S. Zaheer, pg. 732) I agree, Strategic issues in one particular country cannot be systematically solved in a different country. In order to implement the business model, the company should create specific strategy which complies with a local market demand and local government regulations. Keith Morgan shows that Chinese government demand GEMS attention. He states, “Some years ago, brokers purchased used medical equipment for the West and dumped it in China. The Chinese government deemed this insulting and banned the sale of used equipment. Without such equipment, rural hospitals would be denied of functionality.” (GEMS 2002, pg. 15) In addition, in order to analyze a new market, a company should integrate local skills and expertise within the mainframe of the business structure. In
General Electric Medical Systems
For years GEMS has been exploiting the global product structure which enabled the company to increase its value around the globe. However, this structure has also created challenges within organization and its strategy. With Global product company philosophy, General Electric Medical Systems had made separate joint ventures for CT, X- Ray and ultrasound partnering with regulatory government such as Ministry of Health and the State Drug Administration and their subsidiary manufacturing groups. Due to this, GEMS encountered some challenges associated with these partnerships. Mr. Chen describes that “In one joint venture, partner firm would receive orders for equipment, and then service the orders from its separately and wholly owned factory, thus cutting us out” (GEMS 2002, pg. 14). In addition, according to D. E. Westney and S. Zaheer, the Global product structure has a potential weakness. The structure lacks responsiveness to local needs and local customer needs whose demands don’t fit profile expected by the business unit. Also, it is unable to leverage potential synergies across product lines within a country. (D. E. Westney and S. Zaheer, pg. 732) I agree, Strategic issues in one particular country cannot be systematically solved in a different country. In order to implement the business model, the company should create specific strategy which complies with a local market demand and local government regulations. Keith Morgan shows that Chinese government demand GEMS attention. He states, “Some years ago, brokers purchased used medical equipment for the West and dumped it in China. The Chinese government deemed this insulting and banned the sale of used equipment. Without such equipment, rural hospitals would be denied of functionality.” (GEMS 2002, pg. 15) In addition, in order to analyze a new market, a company should integrate local skills and expertise within the mainframe of the business structure. In
References: 1. Tarun , Khanna . "General electric medical systems ." . . (2005): pg 16.Print. 2. Srilata , Zaheer. "The Multinational Enterprise as an Organization." Multinational enterprise organizations . 1.9 (2005): 349-380.Print