Strategic Analysis Techniques and Tools in Power Generation

Strategic analysis can be described as the process of researching organizations and their operating environments to help in formulating strategies. There are different strategic analysis techniques and tools which help businesses to understand their environments besides expressing their strategic choices. In the current world, there are many transformations, especially in the electricity sector. Electricity based systems upon large centralized generation, distribution and transmission technologies are transforming into a system that even embraces digitally-enhanced, low-carbon technologies and well distributed. Emerging and traditional, digital and physical, small and large, are all converging to form an advanced power network for the 21^st century (Afriyie et al. 2018, p. 5). General electric is leasing in this transformation, and it is co-creating the upcoming energy with worldwide customers. General electric produces different services and products including power generation, household appliances, water processing, consumer and business financing, industrial products, and artifact engines. This paper will analyze the strategic analysis techniques and tools used in the power generation by General electric company.

General electric co. is an organization which is globally diversified financial and technological service company. The company produces different services and products encompassing industrial products, consumer and business financing, water processing, power generation, artifact engines among others. There are many changes in the current world, and the company has to position itself strategically to move with the current world. For instance, the current world is demanding for an efficient, safe, affordable and reliable power (Agarwal and Brem 2015, p. 200). Such power is very beneficial to different economies because it can help in raising the living standards and improve the growth of economies. As more intelligent, customizable and sustainable power solutions become accessible, the living standards and economic opportunities also increase. The company, therefore, aims at increasing the technologies used in the production of energy make continuous innovations to make advancements on the existing systems and develop new technologies, and also advance the digital platforms which can integrate all the electric systems in a seamless framework of data.

General electric company (GE) always aims at having a competitive advantage in the market. GE, therefore, uses accelerated growth plans to enhance its continued expansion in the global markets. Diversification is, in fact, the most important thing for GE because it can aid in its growth (Joseph and Ocasio 2012, p. 634). The company also aims at becoming the best technology company and becoming the best infrastructure in the entire world. It focusses at positioning itself as the infrastructural leader in the market, investing more in innovations, and improving its service to customers by developing a sound business culture. In the past ten years, general electric has tried to an emphasis on industrial leadership and transformation of its portfolios. It has done this by making notable moves in portfolio investments, pursuing opportunities and making its investments on adjacencies. The company aims at reducing the amount of money invested and improving the level outcomes.

Competitive Advantage

The company, therefore, positions itself among the best energy producers itself and also aims at increasing its innovations.  General Electric is a company and believes in diversification it uses a combination of different strategies. These strategies facilitate its growth and its competitive advantage despite the continuous changes in the economy and the numerous competitors in the market such as Siemens and 3M. Its positioning helps in boosting its resilience as a company which is among the worlds most diversified entity (Bhatia and Sakhuja 2014, p. 10). General Electric’s competitive strategy and intensive strategies are the most important aspects that help the company to remain a great competitor among other companies in the world. The positioning of this company also helps in determining the operational; approaches and tactics appropriateness.

Differentiation involves the process in which companies develop unique attributes or benefits in a service or product that makes it look valuable especially to particular segments. For General Electric, differentiation is the main strategy used to gain a competitive advantage. In this plan, the company aims at attracting target clients to services and products that appear unique and special.  These goods are made unique and special through development and research that is a common thing which is done by the company. For instance, the business has advanced development and research processes for goods in the aviation and health care industries. Because of this focus on development and research, GE is ranked as one of the companies which have many company-owned patents in the US. The generic competitive approach employed by the company encompasses offering of products to different market segments which benefit the company (Hill, Jones, and Schilling 2014, p. 5). The generic strategy has a major influence on other tactics and strategies in this business such as the 4ps used in the market (Grant 2016, p. 16).

GE is known to align its development strategies with the targets of competitive advantage based on premeditated differentiation objectives. Using differentiation universal competitive strategy is a strategic objective which assists in intensifying the company’s development and research programs. The strategic objective improves the performance of the company by supporting the uniqueness of the products which is important in retaining and capturing customers in the target markets. The competitive strategy gained by this company is used to increase the loyalty of customers in the power industry. The use of intensive strategies helps in the growth of GE and successful usage of differentiation.

Diversification

Power generation is among the services which generate a lot of revenue for the company. The company implements and develops solutions and systems that utilize different resources like gas, water, and oil to produce power. GE also sells products like generators, filters, treatment systems and turbines to customers which are essential power sources. This segment generates more income for the company when compared to others such as health care and aviation. For instance, 29 percent of the total profits earned by the company in 2015 came from the power supply while 17% and 29% were earned from healthcare and aviation respectively during this year.

The company main aim is to maintain a competitive advantage despite the significant competition. The company competes against other companies in the market such as Danaher Corp. Caterpillar Inc. and United Technologies Corporation among others.  The company has many products as stated above and may therefore work with numerous employees. The company, therefore, works on developing skills, enhancing technology and creating jobs. Its continuous improvements also require employees to remain updated which means that the company has to teach employees on new trends regularly. The company invests a lot of funds on the development and training of workers as a way of motivating them and advancing on their knowledge (Schoemaker, Day, and Snyder 2013, p. 815). The training also develops various resources and skills for the company’s production facilities. The company also has many investments which help in balancing performance (Alonso et al. 2015, p. 38).  The company applies different value systems which involve activities which create value to the company including in activities such as delivery and production of different offerings. But for this company to achieve this, it should have the necessary resources and good methods of production.

The company has different resources which help in creating value to the company including physical resources, talent management, leadership, diversified portfolio, development and innovation, and customer care (Sheth Sinha and Shah 2016, p. 2). Physical resources have a good reputation in water technologies and power generation using industrial applications and independent power inventions. The company has physical resources such as steam turbines and gas which it supplies to numerous countries. In regards to leadership, the company uses motivational, and Immelt’s democratic leadership which encourages a culture of innovations. Then the company trains its workers to ensure they have the required skills and talents to perform different activities (Johnston and Bate 2013, p. 43). Another resource available for the company is the innovation and technology. The company focusses on innovation and technology which helps in continuous expansion. The company also has diversified portfolios which encourage its performance improvement. The last resource is customer care which is a major focus by the company.

Resources for Creating Value

The company uses different resources in the production such as gas turbines which help in enhancing production efficiency. These turbines which uses waste materials help in generation of power and heat while reducing environmental pollutants and conventional fuel usage. They also help in enhancing efficiency in the company and the production of electricity.  The company mainly focusses on power production, and it has competent employees who are skilled in fields such as engineering to help in the production sector. There are different value systems, product or service portfolio (BCG) resource audit and potential growth available for the company. The company has different portfolios, but the power supply is the business unit that is emphasized on by GE.

The company has a high competence level which includes the characteristics which enable companies and individuals to perform well. Competency allows companies to evaluate, identify, and develop the behavior of customers and employees. Use of competency models such as SHRM competency model can help in identifying the level of professionalism required in different business units. For instance, knowing these competencies can help HR professionals to identify the knowledge and competencies required to enhance the better performance of employees.  

Value systems are those systems that help in improving the performance of companies. GE is a multidivisional company which has complex portfolios to manage with different services and products. Each unit has its service or product to offer, and all have different performance level. It means that the future performance and plans for each product are different (North and Kumta 2018, p. 1). As discussed earlier, the General Electric aims at differentiating its products so that it can gain a competitive advantage and become a leader in the industry. The company ensures that it achieves its positioning by carrying out different activities. One of them is the SWOT analysis to determine the internal and external factors which affect its performance.

The company exists in a competitive market meaning that it is faced with many challenges and opportunities. There are also many regulatory and legal controls which challenge the performance of many businesses in the world. But GE Company has attempted to position its products using its skilled HR and technological capabilities which helps in dealing with the increase in disruptive innovation. The company also emphasizes continuous development which enhances product development and increases in sales. All these elements add value to the company because they allow the recognition of its products, quality maintenance and expansion of the services and products.

Investment in Employee Development and Training

The value chain models include all the activities that create value in an organization including raw materials (Grünig and Morschett 2017, p. 47). GE Company aims at offering products with superior qualities to improve its competitiveness. Companies will, therefore, have to research more on customer’s desires and perform better than their competitors. Value chain model helps to view entities regarding systematic stages of transformation. The model was developed by Michael Porter who argued value addition is an important concept in sustaining and creating superior performance. The model can be used in strategic planning by companies, and GE Company has its analysis for the products it offers.

The company has a complex and large inbound logistics activities involving the distribution of different raw materials. Energy expenses in this operation have the largest share in the costs of production. Sourcing techniques used in the provision of services and products help in maintaining supplier relationships.

GE collaborates with other entities like Power Costs Inc. (PCI) to links its power production with energy trading. Other operational expenditures include energy salaries and manufacturing salaries. Innovational technologies used in the different operations can help the entity to become a cost leader in the market.

GE electricity supports over 100000 people from the entire world which is equivalent a third of the total power. The innovative technologies used by the company increases the efficiency during production and also produces reliable, affordable, sustainable and reliable offerings. Grid services provided by the company also add value to suppliers.

The company has an intensive marketing approach and has achieved huge contracts to support energy in countries like Algeria. GE uses offline and online sale channels despite being the leading brand in the world. The company sells its products at diminishing prices and in different locations using different promotional strategies.

The activities carried out by the company focus on differentiation strategies and cost leadership. The company continuously attempts to gain new clients through its strategies. The company is a cost leader, and it has achieved product diversification hence creating more value than its competitors. The company focusses on innovation and research which is accredited by its accomplishment in creating satisfaction among customers.

The services and products by GE Company are recognized globally due to their uniqueness and quality. It means that the company satisfies the desires of its customers hence improving their satisfaction (Ocasio and Joseph 2008, p. 10). The company also has a good infrastructural development and mergers which improve its performance in the outside world. Besides this, its value creation analysis shows that the company has different external links that boost its performance such us uniqueness of its products and strategic positioning.

Innovation and Technology

Bolton Consulting Group (BCG) is a matrix which has variables which assist in the analyses of SBUs. This tool is applied by multiproduct and multidivisional companies like General Electrical to analyze various portfolios and assist consequent allocation of resources (Filippov 2017, p. 9862). Both the rate of market growth and comparative market share take values ranging between zero and one. According to studies, the company experienced a slow share and growth between 2016 and 2017. However, market share increased especially in power and aviation segments meaning that market share increased but market growth was low. The power industry always comes on top with more productions that other sectors and therefore acts as the future hope for this company. In the past, power sector never performed well may be due to the fluctuations in fuel prices. There stable prizes currently which means that the sales on power will increase. General electrical company, therefore, needs to focus on technology and product innovation and also in other sectors such as marginal enlargement on the international market and optimize the usage of resources.

Currently, the electrical industry is making shifts towards digital technology, and this can enhance the value chain of companies like GE Co. This is a company that is willing to enter fresh markets and implement new technologies. Penetrating new markets can be difficult, and it will require more innovations to outdo the existing companies. GE-Power uses advanced technology which enhances the usage of natural resources efficiently (Ocasio, Laamanen, and Vaara 2018, p. 160).  The company has successfully entered new markets like in India and Sravanthi energy. Based on this findings, the existing product portfolio can help the company to invest in new markets easily. In some years to come, the demand for power will increase, and there are still many people across the globe who do not have access to electricity meaning that there is a need for more power supply. This is an increasing business opportunity for the company meaning that it can increase its investments on gas turbines which will in increasing the competitive advantage of GE-Power.

Merging with other companies can also increase investment and market share of the company. Sravanthi Energy has more knowledge on the Indian market and merging with such a company will help to improve the quality of products and services produced by the company.  Sravanti Company focusses on increasing its power generation in the country, and it would like to get new technologies which can enhance its performance (Rad, Torabi, and Shakouri 2019, p. 530). The company focusses on increasing the supply of power to improve affordability, safety, and reliability of electricity. The company would also like to develop a digital grid and enhance the digital consumption of electricity. The digital grid will help in easing multidirectional energy flows which ensures that a balance exists demand and supply as well as ensuring there is the transmission of price signals and information. There are also many advances in the energy and solar energy storage, and this contributes to decreased demand for power and an increase in demand for storage. GE-Power can, therefore, focus on other areas and make necessary advancements which will increase its performance.

Portfolio Diversification

The company will have to employ new employees due to these changes even if digitalization is also required. The company can, therefore, combine to improve sales in the region and provide assistance in digitalization. It is because there are other aspects that face the performance of organizations besides technology (Cohen 2015, p. 15). They may include the existing competition which one of the most robust barrier to entry. The company should, therefore, focus on other areas to make sure that it improves its future performance besides competing favorably.

According to this paper, General electric can add value to its value chain because it is making positive strides towards development. The exciting journey by this company is characterized by technological strength and research performed by the company. The technological growth of the company and the research have provided opportunities for the company to grow continuously (Gebauer, Gustafsson, and Witell 2011, p. 1270). Currently, numerous people do not have access to electricity, and this is an important area where the company can venture and get better returns. The power supply is the unit which provides more revenue for the company when compared to other portfolios meaning that the company needs to focus more on this area and develop new technologies to boost sales. The advancement in storage technologies and storage facilities can also improve customer satisfaction, and they will help differently in power distribution.

GE Company has done more to increase its sales and become a leader in the world, but there are other areas that it can focus on to ensure that it maintains this in the future. The word is changing, and new companies continue to emerge with advanced technologies which are a considerable threat to the company. Sometimes demand fluctuations and outages also exist which require the company to adopt advanced technologies. The company will have to enhance strong coordination and partnerships to ensure that it faces different challenges and easily turns them to opportunities.

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