Identifying opportunities for growth is vital to ensure the firm’s sustainability. Growth is typically measured by looking at key statistics such as market share, profits, sales, turnover, and staff numbers. Within GE’s letter to their stakeholders they state that, “growth is the initiative, the core competency that we are building in GE.” They are strategically planning their growth through technical leadership, services, customer focus, globalization, and growth platforms.
The Power of Technical Leadership
Technical leadership will enable GE innovate high-margin products that will dominate market share and potentially open up new markets. GE has 2,000 researchers devoted to meeting the market’s and customers’ needs. Nanotechnology has been one initiative that plays into GE building their technical leadership. With this new technology, they can produce super light alloys that create substantial fuel efficiency and cost savings. GE ultimately would like to expand their margins and grow their installed base using this technical leadership part of their growth strategy.
Next, through services, GE would like to optimize their customers’ assets. The technical leadership GE has shown thus far has created a massive installed base of more than 100,000 GE jet engines, power turbines, locomotives, and medical devices that has allowed them to provide high-margin services for decades. Services are only beneficial to GE if they can make their customers more profitable. For instance, within GE’s energy market they have built an asset optimization business that works towards improving their customers’ energy efficiency, uptime, and environmental performance.
The customer is always first
GE uses their customer focus to continue along with their vision of making GE a truly great commercial company. One of their successes has been in what is called “vertical selling,” the practice of aligning their offerings in four industries that are critical to GE: healthcare, energy, transportation and retail. GE hopes to build enduring relationships through this customer focus strategy.
Once customer focus is mastered, GE can work on globalization in order to multiply every growth idea. GE considers globalization to be one of their core competencies, which at times can seem controversial. In some cases, globalization is often seemed to be “un-American,” but GE believes that the world is their market and so their customers are everywhere. Globalization can most effectively be seen when dealing with China. For example, GE’s revenues within China alone were 2.6 billion in 2002.
Lastly, GE plans on focusing on new growth platforms. GE considers its strength being able to “conceptualize the future, identify ‘unstoppable’ trends, and develop new ways to grow.” They look to capitalize on this strength by building positions in high-growth markets. By utilizing all of these strategies GE is ultimately aiming to maximize growth and incorporate it as one of their core competencies.