Strategic Management

Executive Summary

The relationship between the organization and its environment is complex and hard to understand. This report seeks to provide strategic recommendations for General Electric's (GE) management by examining its internal and external environment. In addition, GE's critical success factors and strategies were investigated.

This report focuses on 3 of GE's businesses: GE Aircraft Engines, GE Medical Systems and GE lighting, evaluating their performance in the industry. By assessing their environment-strategy-capability, potential flaws were identified and recommendations were suggested for improvement.

It is recommended that GE should incorporate sourcing and acquisitions. In conjunction, Blue Ocean Strategy is recommended to enable GE to achieve greater altitude of excellence.

Finally, GE must learn to apply the suitable and appropriate strategy to the respective businesses. With this in mind, GE will thus be able to perform better, achieving superior revenues.

Introduction

General Electric (GE), established in 1878 by Thomas Edison, is one of the world's leading diversified industrial company. From aircraft engines to power generation, and financial services to medical imaging to plastics, GE is dedicated to be the leading solution provider in terms of its products and services.

Strategic management is a continuous, iterative process aimed at keeping organizations as a whole appropriately matched to its environment (Certo and Peter, 1990). Being a for-profit organization, GE will have to identify and resolve problems that will impede the growth of the company. Furthermore, in highly diversified organizations like GE, strategies should constantly be reviewed so as to seek necessary changes to progress efficiently and effectively (Beckhard and Pritchard, 1992).

This report seeks to analyze GE's macro-environment and micro-industry, as well as its critical success factors and the strategies adopted. With this, alternate strategies will be recommended, enabling GE to perform better, thus leading the organization to greater heights of excellence.

Environment Analysis of GE

E: External Environment

T: Task Environment

Figure 1 - Adapted: Daft, 2004, p.137

Figure 1 shows the sectors influencing GE, indicating each sector has an impact on GE. GE's external environment is the broad conditions and trends affecting GE indirectly. Its task environment is the specific external elements that GE faces in operating, affecting it directly. Environmental influences and their impact on GE's business can be used to provide opportunities and make contingency plans for threats when preparing business and strategic plans (Kottler & Schlesinger, 1991; Byars, 1991)

External Environment Analysis

An organization's environment is composed of those institutions or forces that are outside the organization and potentially affect the organization's performance (Robbins, 2001). GE's environment refers to the external factors that influence its functioning and performance (Narayanan and Nath, 1993). The external environment consists of five major elements: technological, economic, legal-political, socio-cultural and international (David, 1987; Hall, 1996).

Technological

The technological element reflects current knowledge about production of products or services (Bartol, Tein, Matthews and Martin, 2002). While GE has sophisticated operating system, E-business has been considered as a long-term challenge. Furthermore, GE challenged to stay