Definition of Strategy
Increased globalization and competition in the market at large has necessitated the need to come up with viable competitive strategies. This is because all firms seek to carry out activities that ensure they gain a competitive advantage over other related businesses within a similar industry. Therefore, through strategic managers, firms set various goals which are achieved through particular activities and actions. It is these activities and actions that form strategies. As such, a strategy can be defined as a plan undertaken with an aim of solving a given problem or achieving a specific goal. There are various strategies that can be undertaken by firms facing immense competition. These include strategic human resource management, innovation strategy, and global strategy. Nonetheless, a firm decides on which strategic decision to undertake depending on numerous factors which include resource availability and the nature of problem at hand. The two potential strategies applicable to General Electric are the global strategy and the innovation strategy. Those strategies are chosen based on the global economy situation (macro factor) and GE’s core competencies (micro factor).
Global Expansion Strategy
General Electric has four main business operations. These include healthcare, broadcasting and entertainment, technology infrastructure, and energy. GE seeks to maximize its turn over each and every year by emphasizing on its three main sources of competitive advantage. These include customer focus and integrated solutions, innovation and technology, and ensuring global presence. Increased globalization and the immense growth in multinational companies necessitate the need to ensure a global presence throughout the world. Moreover, globalization has been facilitated by the removal of trade barriers through establishment of trade unions such as COMESA and the European Union. Global expansion strategy refers to the expansion of a firm`s activities throughout the world. As such, a firm that adopts global expansion strategy not only invests in one country but also invests in other countries in various continents. Global expansion strategy is essential since it offers a large market for firms’ products. This in turn leads to increased sales and revenues. Additionally, globalization enables a firm to attract highly skilled employees who are able to contribute positively to a firm`s development. Nevertheless, global expansion strategy should be undertaken with much caution. This is because globalization poses numerous challenges. These include legal barriers, cultural barriers, political and macro-economic instability, and high initial development costs. As such, before a firm decides to undertake global expansion strategy, it should carry out external environmental analysis. This will enable the firm to assess the viability of investing in other countries. A firm should, therefore, conduct a thorough research before investing globally. Moreover, it is essential to ensure the availability of adequate funds and human capital. Through the leadership of Immelt, GE sought to increase its trading activities within the international markets. This saw the appointment of John Rice in the year 2011. John Rice was mandated with the task of leading GE in international trades. A major focus was laid on specific countries which were believed to present viable business opportunities. These countries included Brazil, China, India, China, and the Middle East. GE conducted the global expansion strategy in various stages through different years. For instance, in 2008, GE successfully built a relationship with China through the Beijing Olympic Games. Additionally, GE was able to produce high revenues through various platforms during that period. GE also established relations with Mubadala, an investing arm of Abu Dhabi in 2008. This relationship included establishing a training centre in Abu Dhabi and undertaking projects in renewable energy. Further, in the year 2009, GE announced its bid to initiate the company-to- country strategy. Under this strategy, GE sought to meet the needs of the locals through a myriad of infrastructural investments.
Adoption of global expansion strategy requires one to be able to meet its customers need in various countries. It is, therefore, essential to appreciate the fact that consumer needs vary from one country to another. With that in mind, GE`s need to internationalize its business operations saw it take a different approach towards product development. This was with an aim of developing products which were tailor made to meet the local market needs. For example, GE developed a portable, low cost battery for consumers in China and India. However, some of the products tailor-made for emerging markets also became marketable in industrialized countries. GE set up teams in other countries. These local teams were given the freedom and power to adapt and develop products which were suitable for their markets. Additionally, global expansion strategy by GE led to other changes such as the transfer of GE Healthcare headquarters from the U.S.A to U.K, transfer of X-ray department to Beijing, and internationalization of the workforce. Internationalization of the workforce saw the recruitment of about sixty Indians by the year 2006.
SWOT Analysis for Global Expansion Strategy
Rumelt Criteria on Evaluating Global Expansion Strategy
Rumelt`s Criteria are four in number and include consistency, consonance, feasibility, and advantage. Firstly, global expansion strategy is consistent with GE`s internal aspects. This is because GE seeks to internationalize its operations with a bid to ensure more returns. Secondly, global expansion strategy is positively aligned to the external trends. As such, it can be deemed to be in consonance with the environment. This is because there is a significant growth in the need for energy and heath care facilities. Thirdly, global expansion strategy is feasible since GE has enough human resource and funds to internationalize its operations. Fourthly, the global expansion strategy is advantageous to GE since it will enable GE to maintain a competitive advantage over its competitors.
Balance Score Card and Implementation of Global Expansion Strategy
Innovation Leadership Strategy
Innovation leadership strategy refers to meeting the needs of customers through creation of new designs. Innovation leadership strategy, unlike invention, only ensures things are conducted differently so as to meet the ever changing consumer needs and desires. Innovation leadership is significantly essential as it not only aims at maintain consumer loyalty, but also aims at increasing sales turn over. Innovation leadership strategy has four stages which include search, select, implement, and capture. It is through these stages that an idea is sought and implemented after going through a rigorous selection process. Thereafter, an evaluation of the impact of implementation is carried out so as to determine how effective the strategy was.
Stages of Innovation Leadership Strategy in Relation to GE
The first stage of innovation leadership strategy is search. This involves looking for viable opportunities for innovation. The main source of an innovation opportunity is consumers. Consumers can be interviewed so as to find out what they feel about a particular product. Additionally, highly skilled employees can also be a source of information in relation to innovative ideas. This explains the reason why most organizations seek to recruit and maintain highly skilled employees. This, they achieve through offering good packages, training and development, and employee motivation programmes. General Electric through the leadership of Immelt ensured that managers developed growth traits in the course of their service. These traits included creativity and imagination, decisiveness, external focus, and deep domain expertise. Through the leadership of Immelt, managers were made to stay longer in each job group. This was with an aim of ensuring each manager gained adequate knowledge in a particular field. Consequently, the managers served as an integral source of innovative leadership strategy.
Selection forms the second stage of innovation strategy. Selection involves the process through an innovative idea is chosen from available options. This is because firms can only adopt certain ideas due to concerns such as viability, time and availability of funds. Therefore, innovative leadership strategies collected from consumers, employees and managers are incubated by firms. Thereafter, a firm can employ top-down or bottom-up evaluation and discussion groups. It is through these groups that a viable strategy is selection for future implementation. Factors such as availability of human capital, funds, and legal and environmental issues are considered under this stage.
The third stage of innovation leadership strategy is the implementation. Implementation involves carrying out the selected innovative idea. As such, implementation can be termed as putting an idea into reality. Lastly, there is a need to evaluate the impacts of the implemented strategies. This can be done through analysing profitability ratios and conducting a survey on the environmental impacts.
General Electric has over the years implemented innovation leadership strategies with an aim of maintaining a high competitive advantage in the market at large. The leadership of Immelt saw various breakthroughs such as introduction of a smart grid, evolution hybrid locomotive, and sodium batteries. Additionally, the introduction of ecomagination program, a program which sought to develop environmentally-friendly business solutions generated a lot of clean energy revenue in the year 2011.
SWOT Analysis for Innovation Leadership Strategy
SWOT analysis refers to strengths, weaknesses, opportunities, and threats of a firm in relation to its decisions.
Rumelt Criteria on Evaluating Innovation Leadership Strategy
Rumelt`s Criteria on evaluating innovation leadership strategy involves assessing the consistency, consonance, feasibility, and advantage of implementing a strategy. Firstly, innovation leadership strategy is consistent with GE` s aspects. This is because GE ensures management growth and develops a talent base within its organization. As such, adopting innovation leadership strategy will be facilitated through the availability of highly skilled man power. Secondly, innovation leadership strategy is in consonance with the external trends within the market. This is because consumer needs are currently changing at a first rate. There is, therefore, a significant need to adopt innovation strategies so as to meet consumers need. Thirdly, innovation strategy is feasible in nature due to the availability of sufficient professional and management staff at GE. Fourthly, innovation leadership strategy is advantages as it will enable GE to gain a competitive advantage as a result of ensuring consumer loyalty. This is because through innovation, GE will be in a position to tailor make products that fit its customer’s needs.
Balance Score Card and Implementation of Innovation Leadership Strategy
Bibliography
Amidon, D. M. (2012). Innovation Strategy for the Knowledge Economy (Illustrated ed.). London: Routledge.
Fernando, A. C. (2011). Business Environment (Illustrated ed.). India: Pearson Education India.
Goyal, A., & Goyal, M. (2009). Business Environment (Illustrated ed.). Rajaji Nagar: FK Publications.
Hall, R. E., & Lieberman, M. (2009). Macroeconomics: Principles & Applications (revised ed.). London: Cengage Learning.
Hopper, P. (2007). Understanding Cultural Globalization (Reprint ed.). London: Polity.
Jan. (2005). Economic Analysis for Management and Policy (Illustrated ed.). Newyork: McGraw-Hill International.
Mohan, R. (2007). Innovative Science Teaching, 3/e (3 ed.). New Delhi: PHI Learning Pvt. Ltd.
Nieuwenhuizen, C. (2010). Business Management for Entrepreneurs. New York: Juta and Company Ltd.
Steele, F. (2009). Consulting for Organizational Change (Illustrated ed.). Massachusetts: Univ of Massachusetts Press.
West, A. (2007). Innovation strategy (Revised ed.). Upper Saddle River: Prentice Hall.
