Ge External Environment

Economic: Today? ¦s mutually dependent global economy is creating new opportunities for growth? Xand the corresponding challenges of managing that growth responsibly. In both instances, GE? ¦s size is an advantage. GE is solving big needs for countries that need the broad range of infrastructure, financing and healthcare that economic growth demands. GE is also solving big needs on behalf of the challenges that face all of us? Xincluding access to clean water, limited natural resources and the need for more energy-efficient products and services. The future may be different. The engine of global economic growth has been the U.

S. consumer, propelled by historically low interest rates. While consumers are still solid, 17 interest rate increases over the last two and a half years have mellowed them a bit. ?USocial: Since the whole global economic is growing, the consumers will buy more consumption electric product. The governments need more construction. A profound social change has been the accelerating interest of consumers and employees in quality-of-life issues. GE has advantage at this part. GE is the No. 1 of Top 20 Most Admired Companies 2007 selected by Fortune magazine. ?UPolitical: GE is a global wide company.

They think globally and invest locally. When GE invested China, the direction and stability of political factors are a major consideration. The Iraq War might cause consumers do not want to purchase American product. GE Infrastructure has most association will governments. Political activity also has both supplier and customer function to GE. They need to be authorized to build a power plant from government. The demand of government infrastructure is huge. This kind of demand only could solve by big company like GE. ?UTechnological: GE is one of the most innovated companies in the world. Tomas Edison invented light bulb.

GE is good at technological forecasting. At technological part, GE has advantage. GE? ¦s customers are increasingly using the Internet. Digitization facilitates rapid distribution and knowledge transfer to a fragmented customer base. GE is positioned to capitalize on digitization. GE has thousands of engines, turbines, locomotives and scanners in our installed base. These have been digitized, so that GE can provide our customers with interactive decision support to boost productivity. These range from simple online tools to improve a locomotive? ¦s fuel efficiency to a web-based electronic medical record.

Today, GE has $4 billion of fast-growth digital services. In GE Money, GE is originating loans online, which allow us to reach new consumers with tailored offerings. GE is a leader, and could originate $15 billion through the Internet by 2009. The most important impact of the Internet is in GE? ¦s NBC Universal entertainment business. GE is a leader in content and the Internet opens up new avenues for growth. ?UEcological: Recent year, specific concerns include global warming, demand of gas increased, loss of habitat and biodiversity, as well as air, water, and land pollution.

From GE? ¦s press release, GE wins green globe award for water reclamation. In this ecological situation, the Green is big business and GE is working on it. Industry Environment ?UThreat of Entry The threat of new entrants is small. GE as big is beautiful. GE has economies of scale, wild proprietary product differences, well-known brand identity, very huge capital requirements, good switching costs, absolute cost advantages, good relation with government, and extreme learning curve. GE has multiple businesses which could be seen as GE?

¦s safety net and build highly barrier to the new entrants. ?UBargaining Power of Suppliers The bargaining power of suppliers is low. GE has many different industry businesses. GE is huge and has bargaining power to suppliers. GE also could control their suppliers. GE expects its suppliers to obey the laws that require them to treat workers fairly, provide a safe and healthy work environment and protect environmental quality. The obligation to guarantee that GE suppliers live up to these principles is set out in a detailed process that establishes the responsibilities of GE?

¦s businesses and sourcing personnel, the level of due diligence they need to perform on suppliers in various categories and the data they must keep to document the progress achieved under the Company? ¦s supplier review program. There are some qualifications to be GE? ¦s suppliers. For example, as part of the GE Advanced Materials supplier qualification process, a routine audit of a key Chinese supplier of direct materials identified several deficiencies in its environmental management systems, work place safety and labor practices. GE Advanced Materials conducted the supplier audit of Farbtex International, Ltd.

(Farbtex) in January 2004. The supplier audit consisted of a review of the following aspects of Environment, Health and Safety (EHS): ?? EHS Policies, Resources & Management System ?? EHS Infrastructure ?? Work Place Safety ?? Labor & Employment ?? On-Site Housing ?? Security ?UBargaining Power of Buyers GE has many different industries. At different industries, the level of bargaining power of buyers is also different. To make GE Infrastructure as an example, the power of buyer is low. GE has their special management, material, technology, and know-how.

At NBC Universal, the power of buyer is normal for TV commercials. But the TV commercial during Olympic game, the power of buyer is low. Because of NBC got the broadcasting authority since 1986. ?UThreat of Substitutes The threat of substitutes is vary. At GE Money and GE Commercial Finance is high. At GE Infrastructure is low. At financial segment, the competition is very strong. GE is late start at this segment, in the other words, GE is a follower. But at infrastructure segment, the threat is lot of smaller than financials threat.

Because of GE is huge, GE is the few company which has multiple industry to performance at multiple performance. ?UIndustry Competitors GE? ¦s competitors are broad. Their top competitors are ALSTOM, ABB Ltd. , Citigroup Inc. , Hitachi Ltd. , JP Morgan Chase & Co, Matsushita Electric Industrial Co. , Ltd. , Scheneider Electric SA, Sony Corporation, and CIT Group Inc. The competitors for each industry are many. At finance industry, the competitors? ¦ power are very strong. But for infrastructure industry, the infrastructure companies as GE are some; the companies have this board industry structure as GE are few.