Q The assignment is for General Electric Company:A strategic Audit is a digital-based company which aims at transformation Home, - General Electric Company: A strategic Audit General Electric Company: A strategic Audit General electric (GE) company is an American based multinational company which is established on April 15, 1892. Headquarter of the company is located in Boston. It is basically a digital-based company which aims at transforming various industries with software-defined machines. The company provides products and services which ranges from power production, aviation, digital, gas and oil production equipment, additive manufacturing to the industrial products, medical imaging, and financing (Gusti Ayu Ketut, 2018). As per the current reports the company serves customers of nearly 180 countries. It employs more than 295000 number of employees worldwide. In the year 2017, the firm is given the rank of the 13th largest company in the United States by the Fortune 500. Moreover, in 2012 GE is ranked as 14th most profitable firm worldwide by the Forbes Global 2000. Apart from this, two employees of the company name; Ivar Giaever and Irving Langmuir had been awarded Nobel Prize. After its incorporation since 1892, the company has adopted several new services and technologies which have widened the scope of activities in all the fields. After the establishment of the company, it acquired the total resources of Edison’s Electric Company along with two other electrical firms. In 1900, an industrial laboratory was established by GE and majority of its items are solely produced by its own scientists. It is one of the leading producers of electrical goods all over the globe. Effect on the external environment The external environment of the company includes raw materials, trade, economic resources, human resources, technological advancement, governmental laws and the international companies. GE comprises different sectors and each of its sectors faces the external environment differently with various uncertainty. Market Nowadays consumers are becoming more rational by becoming aware of the latest market information. Thus there is a risk of customer loss along with the reduction of brand loyalty. It is, therefore, necessary for General electrics to create a more flexible organizational structure with the change in market trend. Apart from this, there is also a requirement of rapid market reaction with continuous innovation. International environment With increased globalization, products and services can now be more effectively and efficiently distributed to the global market. GE is facing completion from international countries like Europe, Japan and other newly developing nations. Human resource GE always tries to improve the living condition of its employees with regularly increasing salary, promotion and providing other amenities. However, employee’s satisfaction level also depends on the organizational culture and regulation. Information technology In the present day, there is a rapid development of information technology with the dissemination of information and transparent data exchange. These changes bring more risk and uncertainty in the external environment of GE (Franceschini & Alkemade, 2016). Power generation With continuous development in economy and depletion of natural resources, there is a great opportunity for the GE for creating and producing alternative energy source. It opens a platform for the development of GE technology and energy infrastructure (Provasnek, Schmid, Geissler & Steiner, 2017). Medical industry There is continuous development in the economic as well as the living condition of people with an increase in the demand for healthcare services (Winterhalter, Zeschky, Neumann & Gassmann, 2017). Thus it is a boom for the healthcare service sector of GE for the development of its pharmaceutical industry. The associated environment According to the latest reports, Arctic North Pole’s ice is melting at a gradually increasing rate. With this information, most of the scientists believe that there will be the availability of new shipping routes by the year 2050 after the complete melting. During the year, the shortest and quickest routes for shipping merchandises from Asian countries to East coast of US will be available through the straight Arctic region. Apart from this, it is also expected that the Canada’s Northwest Channel might also turn out as the economical transportation route (Gusti Ayu Ketut, 2018). This is an unfortunate change within the physical atmosphere which will be caused due to illegal human activities. On the other hand, this an opportunity for the GE transport service to sell its maritime parts, engines and services with the accessibility of new paths. Natural physical environment The 1959 incident in the US and Europe depicts the shortening of telegraph wires through a strong solar storm. Similar incidents also occurred in the US and Canada in 1989 and 2003 respectively. All these cases result in extensive fire and blackouts in affected areas and in the present day this loss can be more harmful due to the severe geomagnetic storm. Hence, a detailed forecasting of the geomagnetic currents is a significant and promising venture of GE Energy on a global scale (Provasnek, Schmid, Geissler & Steiner, 2017). General Electric Company has also its impact on the natural physical environment. The natural resource scarcity is clearly visible in the company's strategies and management in the gas and oil industry. Limited oil reserves have been identified as the limiting factor in the growing industry of GE Company's gas and oil segment. Moreover, there is also growing energy consumption all over the world. This threat results in the search of an alternative source of energy for the company. This resulted in the business opportunities towards the planned expansion of the renewable energy segment of the company. This expansion also creates an ecological opportunity for the use of recyclable materials (Agarwal & Brem, 2015). In this direction, the company heads towards corporate social responsibility strategy which eventually leads to improve brand image and creates conglomerate’s business leadership in the global market. Societal environment The societal environment of General Electric Company includes the economic, technological, political, legal, and socio-cultural variable Economic According to the survey report of 431 global companies in 2012 conducted by Global Intelligence Alliance to determine the top five markets in next 5 years, and the result is India, Brazil, China, Russia, and Indonesia. As per the reports of Boeing, by the year 2029, approximately 30900 new narrow-body planes will be needed for the use of commercial purpose. The market value for all of these planes will be around $3.6 trillion. Hence, this is a huge probable market place for the Aviation sector of GE which invests in aircraft engines and other parts (Winterhalter, Zeschky, Neumann & Gassmann, 2017). Similarly, the GE oil and gas energy sector introduced a new solution as a refuelling station for the CNG which will be more accessible. The GE water and power sector also produce a new way of treating the wastewater which is produced during the process of gas mining. Technological The future health technologies in health sectors are given as; 1) regeneration (3-D organs, synthetic blood, tissue regeneration), 2) biogerontology (genetic engineering), 3) diagnostics (data driven diagnostics, bloodstream sensors, open health records), and 4) augmentation (neuroprosthetics, telescopic vision) (Lee & Lee, 2015). GE healthcare services are currently providing technologies which can support these innovative areas. Similarly, GE Aviation is trying to design commercial aircraft which consume less fuel, release less carbon, emit less noise, and run by non-fossil fuels. Political legal The counties which have given more level of freedom to its citizens possess laws which are more favorable towards economic growth as compared to other countries. However, when marketing in corrupt countries GE needs to give more attentiveness or it will create a global negative image. GE should focus primarily on the democratic countries especially the European nations for its business (Steenkamp, 2017). Socio-cultural GE healthcare services have been more focused on the US market such as New York, Maine, Alaska, Massachusetts, Rhode Island as they have the highest spending in healthcare for per person. However, the healthcare service of GE also operates in several other foreign countries (De la Torre & Rubio-Varas, 2016). Task environment It is reported that GE attains almost 1/2nd of the incomes from its principal business, whereas GE aviation, GE transportation, and GE Energy are operated on a global scale. It is reported that the GE capital is shrinking day by day and its other divisions have other priorities over them. The external pressure for effective coordination between sectors is relatively strong while the external pressure for the local receptiveness is relatively weak for the company. In the report of the strategic group, GE is found be placed among the companies having high price rate for its products and services (Cho, Kim & Kim, 2015). Threats of the new entrants In the field of renewable energy, GE may face some competitions from innovative and challenging entrants. Threat of substitute buyers The Company always looks for opportunities to offer innovative and advanced products in individual sectors. Bargaining power The buyers have limited possession in bargaining power in almost all of the trades where GE runs its industry. External relative power The Union and Government most of the time making it difficult for the business for GE. Rivalry among competitors Apart from the commercial business of GE, all other businesses of GE have competent management staffs. No competitors could threaten the standing of the company in the global market (Conrad, 2014). The associated environment The external environment of General electric company comprises of its opportunities and threats. The opportunities of GE determine the success of strategies for the sustainable growth of the company. It is expected that the number of people associated with the power grids will be increased exponentially by the year 2050. By 2030, approximately $60 trillion of infrastructure expenditure will be required for the developing markets. It is also expected that the worldwide requirement of solar energy will be increasing by 30 percent each year. There is also growth and development in digital technology in all of the sectors along with the renewable energy market (De la Torre & Rubio-Varas, 2016). In the next five years, there is an expected growth in the global market of developing countries. However, the management personnel of the GE need to consider all these opportunities to handle and execute it effectively. External Environment The adoption of digital technologies in all of its sectors opens the path for additional development of the company. For instance, GE Company will be able to grow deliberately by fulfilling the market requirement of digital technologies within the healthcare service. Additionally, to this, the external factors also facilitate opportunities for the GE Company for further diversifying its industry where digital technologies are in high demand. On the contrary, the growth of its renewable energy market an excellent opportunity for expanding its Renewable energy sector (Vogel, 2016). This will eventually help in increasing the financial significance of this sector as compared to other sectors of the conglomerate. The threats are also an important component of the company's external environment. GE's controversy related to repeated debt limit can create a negative impact on capital investment. Moreover, Internal Environments Strengths and weaknesses are both incorporated in the analysis of the internal environment. Strengths determine the organization's capabilities and potential. For instance, the company's research and development team invest most of its time and money mainly in the aviation industry. The primary strengths of the GE involves: 1) Strong and efficient research development, 2) diverse product portfolio, and 3) strong brand (Whalen, Uslay, Pascal, 2016). The manager of GE should use to analyze these strengths and implement them according to the company's capabilities. Strong research and development team is one of the major competitive advantages of the company, as it helps in rapid growth and innovation of the products according to the market's requirement. Another major strength of the company is its diverse product portfolio which deliberately spreads risks and reduces the business vulnerability of the conglomerate. Moreover, diversification is a major determinant of marketing management and the marketing mix of the company. Weakness is those internal strategies which create difficulties and limits the organizational growth. In the case of GE, it applies new and innovative strategies to minimize the impact of its weakness in penetrating the market of electric lighting. Some of the major weaknesses of GE company includes; 1) dependency on suppliers for the raw materials, 2) poor performance of the GE oil and gas sector, and 3) weak performance in the Asian market (Cai & Li, 2018). Dependency on a supplier for raw materials highly affects the supply and price fluctuations of the raw material. Moreover, poor performance in the Asian market affects its overall global performance. Corporate culture corporate structure Individual GE business component consists of its personal president who is responsible straight to the CEO of the company, Jeffrey Immelt. It is to be noted that GE has improved its senior leadership inside as well as outside of US by a factor of 50 percent for the past few years with an intention to sustain the newly developing markets. The CEO majorly focuses on the training of executives to prepare them as experts in subject matter (Ramdorai & Herstatt, 2017). Apart from this GE have an strong environmental strategy and markets variety by maintaining various collections, firms as well as network. The corporate assets within the organizations includes: Marketing- the products and services are expected to be exceptional and they can even market by themselves. It transformed the marketing strategy by doubling the marketing organization from 2500 to 5000 employees by the year 2003 to 2010 respectively. Research and development- it has in total of 2800 employees are engaged in R&D department and among them, more than 1000 are PhD holders. The total budget for GE R&D budget includes $4.3 billion, whereas the investment for the global research department was limited to $555 million (Porter & Heppelmann, 2015). Operations and Logistics- the prime task of the company is to enhance the forty huge processes within GE. The GE Advantage program however surprisingly protected almost $800 million of margin by the year 2012. Strategic alternatives In order to retain and compete in the global market, GE is required to follow the three basic strategies: 1) investing in the market-driven products, localization, and innovation, 2) building the financing capabilities and local talent, and 3) leading the brand, R&D and local partnerships. Apart from this, GE needs to continue towards newer technologies in software analytics, aircraft engines, and communication technologies. Recommended strategies With refers to the above mention description, the strategic alternative that is recommended for GE includes (Paley, 2017; Vogel, 2016): • The emerging markets should be given priority and the focus should be on customers’ requirements such as energy, health requirements, and transportation. • Achieving a competitive advantage should be another requirement, which includes the continuation towards the development of energy efficient technology and product durability. • How do you skin investment is required for improvement of the processes? This, in turn, has the capacity to save cash with reference to competition in emerging markets. • Continuation investment into R&D sector should be visioned. The example includes communication technologies, analytics, software development, aviation engine and parts. • Partnerships should be continued which can effort strength to the company and achieve collaborative outcomes. • The business units which are underperforming or deviating from the core of objective of GE must be sold while the capital acquired should be invested to the core business. This will balance the capital of the company by buying the shares and increasing the dividend yield. • Third-party outsourcing should also include training and education search that there should be no compromise in quality. • The cash flow from the profitable business segments that have a slow growth rate should be invested judicially do the business unit that has a potential for growth. • The internal environment should always be promoted for acquiring competency. This means the most contributing and achieving employees should be rewarded heavily where is the least performing employees must be trained and replaced by better talent. Corporate resource finance The corporate executives, need to develop the vision says that they can frame the current Work environment in accordance with the future trend of industries. For example, the businesses in power generation, medical Imaging equipment, rail, mining, and aviation have the opportunity to capture global finances. Hence the company should keep rotating their skill managers says that they can develop in the knowledge base for various market and complementary information could be accounted for future market orientation. This includes business executives from the first line, to supervisors, and employees such that they should be included in functional strategies, training as well as well as for the mission to achieve overall objectives. Such a program is financially feasible, as investing in the restructuring the internal environment can reduce the future investment as well as business risk (Cho, Kim & Kim, 2015). Additionally, it is a very important aspect in corporate resource financing is related to the standard operating procedures (SOPs). This includes constant monitoring and assessment of the work functionalities. In addition to this the change implementation for strategy development, inclusion of external conditions to the internal environment, and technological changes must be accounted (De la Torre, 2016). Since GE Company is on the trajectory of success, thus the current strategies need not be addressed with immediate changes; however, in order to achieve competitive success, changes are mandatory.