General Electric Company or GE is a multinational conglomerate based in the United States. It has its headquarters in Boston, Massachusetts. The company was found in 1892 by Thomas Edison, Elihu Thomson, and three other individuals by the merger of two companies. The company operates in various industries such as aviation, power, healthcare, renewable energy, financing, and so on (GE, 2018). General Electric continued to grow over the years and acquire various smaller firms (Egan, 2018). It has been ranked in the Fortune 500, Fortune 20, and various other performance-based awards (Fortune, 2018). In 2018, the company generated revenue of $121.615 billion and had more than 283,000 employees. The company continues to diversify into new industries. However, in the past few years, its profits and sales have declined.
Following are the four dimensions of the Ansoff Matrix for General Electric:
Market Penetration
Market penetration refers to the act of promoting existing products in existing markets. The first strategy General Electric uses in this regard is to offer various maintenance and after-sales services that create ease for the consumers during and after the purchase. The majority of the customers of General Electric are industrial and commercial consumers that often require such after-sales services. The company has also acquired various smaller firms to reduce competition and increase its market share. Customers are also offered discounted pricing based on their purchasing history. General Electric also motivates its existing consumers to upgrade to newer models of products to increase its sales. It stops providing after-sales services and spare parts of certain models after some time to discourage their use. This forces consumers to purchase newer models. General Electric also markets its products through social media, direct interactions, industrial magazines, and other sources. The company also has strategic alliances with various contractors that deploy General Electric products during their works. All of these strategies help to increase product sales.
Market Development
When a company offers its existing products in new markets, it is developing its markets. General Electric does this by expanding into new geographic markets where its products are not being sold earlier. This directly increases its sales. The company can market its products or enter a new market through a joint venture with contractors to launch its products. The company also launches products of different capacities and functions to target various market segments. For example, a smaller motor may not be used at a steel mill but at a textile mill. If General Electric launches the same motor in a larger capacity, a steel mill may purchase from General Electric. Different pricing for new market segments also helps promote existing products in new markets. Market development efforts help increase company reputation as well.
Product Development
General Electric develops its products by launching new products in its existing markets. The first strategy that General Electric uses is to launch new models of products regularly. These models are of greater capacity, smaller size, improve functions, and offer various other innovations. The company also launches new products that it did not offer earlier. The launch of each product takes detailed research and development efforts. Each new product passes through various formal steps of product development before it is approved for sales. Various prototypes are created, tested, and then approved. General Electric also allows large customers to order customized products through direct sales that are of larger value. Each product development effort is unique and helps the company increase its sales and revenues.
Diversification
When new products are launched in new markets, diversification takes place. General Electric is a conglomerate that has already diversified into various industries. These include both related and unrelated industries. The company can further vertically diversify by manufacturing the components that go into each product which it currently procures from suppliers. It can also establish its own sales and installation systems rather than hiring contractors for these tasks. This will enable General Electric to take control of the entire supply chain. The company can also diversify into various other unrelated industries it has not yet worked in such as consumer electronics, textiles, apparel, shoes, sports equipment, and so on. Each diversification opportunity will help increase sales and revenue of General Electric.
References
Egan, M., 2018. Inside the dismantling of GE. [Online] Available at: https://money.cnn.com/interactive/news/GE-dismantling-interactive/ [Accessed 12 Jan. 2020].
Fortune, 2018. Search Fortune 500. [Online] Available at: https://fortune.com/fortune500/search/ [Accessed 12 Jan. 2020].
GE, 2018. Investor Relations. [Online] Available at: https://www.ge.com/investor-relations/sites/default/files/GE_AR17.pdf#page=38 [Accessed 12 Jan. 2020].