Assignment 1 Discussion—General Electric Sustained Pr 319833

Assignment 1 Discussion—General Electric Sustained profits come from building a competitive advantage

Assignment 1: Discussion—General Electric Sustained profits come from building a competitive advantage. This advantage can be accomplished not only through good financial return on a specific process but also through the correct capacity decisions that must be integrated into the organization’s mission and strategy. Jack Welch, former CEO of General Electric (GE), understood this better than anyone else. Although GE was a profitable and respected company when Welch took over, its financial results during the 1970s were troubling to both its investors and senior management. Welch immediately made changes to the company’s structure and management practices.

From the beginning, he emphasized the importance of being one of the top players in the industry. He told his colleagues that GE should always be number one or number two in all its businesses; if it was not, then their only options would be to fix, sell, or shut down. Because of this strategic direction, GE today usually dominates the markets in which it participates; and if it does not, then it divests. A major part of GE’s strategy is to be the first or second in every market. As you review the module readings for this week, consider the complexity of GE’s products and its emphasis on vertical integration and capacity planning.

GE’s Profile The General Electric Company, or GE, is a diversified company that offers infostructure, media and finance products and services. The company was originally founded by electrical innovator Thomas Edison. It is also listed as one of the most admired companies, ranking as number one in electronics and 16th overall according to Fortune Magazine. For the company's innovation focus, it was ranked as one of the world's most innovative companies by Business Week. GE’s Reach The General Electric Company is organized into 5 divisions including “’NBC Universal", "Technology Infrastructure", "Consumer & Industrial", "Energy Infrastructure" and "Capital Finance".

The company functions in over 100 countries and has over 300,000 employees. For 2009, the company achieved $11.2 billion in earnings and an industrial cash flow of $16.6 billion. Effective January 1, 2011, it reorganized the Technology Infrastructure segment into three segments: Aviation, Healthcare and Transportation. Services Chemicals, Petrochemicals, and Fertilizers Food & Beverage Government & Public Administration Metals and Metals Fabrication Mining (Coal, Minerals, Metals) Oil & Gas Upstream Power Generation GE. (2013). The History of General Electric. Retrieved from. GE. (2013). GE fact sheet. Retrieved from

Using the information above, the module readings, Argosy University online library resources, and the Internet, respond to the following: How does GE’s framework give it the opportunity to be at the forefront of the markets in which it participates? Examine your own firm or a firm you would like to work for in the light of GE’s framework and respond to the following: Does this firm have the means to execute like GE? Which type of resources would the firm require? How could GE’s lessons be applied to this firm? By Saturday, May 20, 2017, post your response to the appropriate Discussion Area. Through Wednesday, May 24, 2017, review and comment on at least two peers’ responses related to their firm of choice.

Paper For Above instruction

General Electric’s (GE) strategic framework, which emphasizes being a market leader in all business segments, vertical integration, and capacity planning, provides a robust foundation that enables the company to maintain a dominant position in diverse industries. This approach not only fosters sustained competitive advantages but also allows GE to adapt swiftly to market changes and technological advancements, ensuring its place at the forefront of innovation and market share across its varied sectors. Applying GE’s framework to other firms requires an in-depth understanding of resource management, strategic positioning, and operational agility, which are critical in replicating this success.

At its core, GE’s strategic advantage lies in its meticulously crafted resource base, organizational discipline, and relentless pursuit of market leadership. The company’s emphasis on being first or second in its markets drives continuous innovation, efficient capacity utilization, and disciplined divestment of underperforming segments. Key resources underpinning GE’s success include advanced technological expertise, a global supply chain network, strong brand equity, and sizeable financial reserves. These resources enable GE to execute large-scale projects, invest in research and development, and sustain competitive differentiation (Barney, 1991; Teece, 2018).

For a hypothetical or target firm aspiring to emulate GE’s success, it must first evaluate whether its existing resources align with the demands of such a strategic approach. Vital resources include technological capabilities, skilled human capital, extensive distribution channels, and financial strength. The firm must cultivate a culture of innovation and operational excellence to enhance its capacity for rapid deployment and adaptation. Furthermore, integrating capacity planning into the strategic framework ensures that supply and demand are aligned, reducing waste and maximizing efficiency—core tenets of GE’s operational philosophy.

Applying GE’s lessons, other firms can focus on strategic clarity—aiming for leadership in chosen markets—and the importance of resource alignment. For instance, firms should prioritize investments in core competencies, develop strategic divestment plans, and foster organizational agility. Additionally, leveraging vertical integration allows firms to exert greater control over their supply chains and production processes, thereby reducing risks and costs (Porter, 1985; Kim & Mauborgne, 2015).

To illustrate, a technology firm seeking to replicate GE’s model must first identify its key resources—such as innovative R&D capabilities and industry-specific expertise—and create a strategic plan that emphasizes market positioning. It should continuously assess its performance relative to top competitors, making strategic decisions about investments, divestments, or strategic alliances. The firm’s ability to sustain innovation, optimize capacity, and execute effectively will determine its success at achieving a GE-like competitive advantage in its industry.

In conclusion, GE’s strategic framework combines resource excellence, market focus, and operational discipline, enabling it to remain at the forefront of multiple industries. Firms aspiring to emulate this model must dedicate themselves to resource development, strategic clarity, and capacity planning. By adopting these lessons, organizations can develop resilient competitive advantages that withstand market fluctuations, foster innovation, and sustain profitability over the long term.

References

  • Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
  • Kim, W. C., & Mauborgne, R. (2015). Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard Business Review Press.
  • Porter, M. E. (1985). Competitive Advantage. Free Press.
  • Teece, D. J. (2018). Business Models and Dynamic Capabilities. Long Range Planning, 51(1), 40-49.
  • GE. (2013). GE Fact Sheet. Retrieved from https://www.ge.com
  • GE. (2013). The History of General Electric. Retrieved from https://www.ge.com/about-us/history
  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
  • Kim W. C., & Mauborgne, R. (2015). Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard Business Review Press.
  • Teece, D. J. (2018). Business Models and Dynamic Capabilities. Long Range Planning, 51(1), 40-49.
  • Porter, M. E. (1985). Competitive Advantage. Free Press.

Related Assignments