G.E. Vs. Westinghouse

G.E. had a large competitive advantage in the large turbine industry for three primary reasons: better R&D and hence improved technology, a clear focus on larger, more technologically sophisticated units, and its status as a price leader in the market. GE had almost twice the R&D budget of both of its major competitors, while simultaneously spending less on R&D as a percentage of sales. This allowed it to have the best technology in the most important market segment in terms of growth: large, complex units that had the lowest per-megawatt cost. In addition, these turbines were built far in advance, and were not subject to price volatility of the more competitive small turbine landscape. Finally, its status as the price leader allowed it to set more consistent prices in both upturns and downturns in its market and not be subject to intense negotiation.

The large turbine will be more profitable in the long run due to economy of scale effect where it makes more sense to buyers as the cost for them is less than buying the small turbines.

The addition of capacity makes sense because it affects the placement of orders that are dependent on short lead