This SWOT analysis of General Electric Company (GE) determines how the business stands in terms of its internal characteristics and external influences. The SWOT analysis model identifies and evaluates the internal strategic factors (strengths and weaknesses) and external strategic factors (opportunities and threats) relevant to managing the business. In the case of General Electric, such factors represent the various markets where the business operates. For example, the company considers the strategic factors in the aviation/aerospace and transportation industries. The results of this SWOT analysis indicate a perspective of GE and its diverse set of industry and market environments. As a major firm in the global market, General Electric continually evolves to ensure that its strengths are sufficient to address its weaknesses and the threats and opportunities in the external business environment.
This SWOT analysis of General Electric Company provides managers with information on the strengths, weaknesses, opportunities, and threats that are significant in strategy formulation and implementation. The analysis yields information on the degree of influence of these internal and external factors on GE. Thus, the company’s strategies must prioritize these factors according to their significance in the business. General Electric needs to apply strategies that match the effects of internal and external factors evaluated in this SWOT analysis.
General Electric’s Strengths (Internal Factors)
Strengths are internal strategic factors that represent General Electric’s business capabilities. This component of the SWOT analysis assesses the company’s organizational abilities and potential. For example, GE’s research and development processes support its rapid development of products for the aviation market. General Electric’s managers use business strengths as a basis for matching organizational capabilities with strategies and tactics. The aims are to have an accurate knowledge of what the firm can do, and to plan accordingly. General Electric Company has the following strengths:
- Strong research and development processes
- A strong brand
- A diverse product portfolio
Strong research and development (R&D) processes are one of General Electric’s main competitive advantages. In this SWOT analysis case, such strength enables the company to rapidly innovate and develop products that suit market demand. For example, GE uses research and development processes to introduce technologically advanced equipment for professionals and organizations.
On the other hand, General Electric’s strong brand contributes to the company’s ability to attract and retain customers. This SWOT analysis considers the GE brand a success factor in the implementation of the differentiation generic competitive strategy, just as the brand is enhanced through research and development that integrates differentiation (See General Electric’s Generic Competitive Strategy and Intensive Growth Strategies).
Another of the company’s main strengths is its diverse product portfolio. This internal strategic factor aligns with General Electric’s expansion of operations in various markets. In this SWOT analysis case, such an internal factor is a strength that strategically minimizes the company’s business vulnerability to decline or stagnation. This strength determines marketing management and General Electric’s marketing mix or 4Ps. This factor and the other strengths identified in this component of the SWOT analysis of GE indicate business capabilities to continue growing and establishing new operations.
GE’s Weaknesses (Internal Factors)
Weaknesses are internal strategic factors that impose difficulties and limits based on the organizational characteristics of General Electric Company. This component of the SWOT analysis determines the issues most significant to the company’s strategic management. GE’s strategies aim to reduce the impact of organizational weaknesses in penetrating the market for jet engines, avionics, and other products. The following weaknesses affect General Electric:
- Dependence on suppliers of raw materials
- Weak performance in Asian markets
- Increasing dependence on the aviation market
Dependence on suppliers of raw materials imposes limits on General Electric’s performance. This internal strategic factor is a weakness in this SWOT analysis case, affecting the company’s industrial operations, in terms of business vulnerability to price and supply fluctuations of raw materials. For example, General Electric’s aviation manufacturing operations are vulnerable to such market dynamics. In addition, the weak performance in Asian markets influences the company’s overall global performance. This SWOT analysis links such a weakness to General Electric’s management approach that traditionally focuses on the biggest markets, such as the United States. Furthermore, the increasing dependence on the aviation and avionics market is an internal strategic factor resulting from GE’s reorganization involving the spinoff of non-aerospace businesses. The company manages the negative effects of these changes through strategic emphasis on performance improvements. The weaknesses shown in this component of the SWOT analysis of General Electric Company highlight the need for strategies for growing the business despite its limitations.
Opportunities for General Electric (External Factors)
Opportunities are external strategic factors that present potential growth and improvement in General Electric’s business. This component of the SWOT analysis identifies the most relevant opportunities in the company’s external business environment. These opportunities influence the success of strategies for sustaining General Electric’s growth. For example, the long-term success of GE’s avionics operations depends on strategies that exploit opportunities in the aviation market. Management decisions must consider the following opportunities available to General Electric Company:
- Growth based on digital technology adoption in all industries
- Growth based on the renewable energy market
- Growth in developing markets
The adoption of digital technologies in all industries presents opportunities for the further growth of General Electric. For example, the company can strategically grow by satisfying market demand for advanced digital technologies in the air transportation industry. In addition, this external factor presents opportunities for GE to further grow its business in other markets where digital industrial technologies are increasingly needed. In this SWOT analysis case, such opportunities align with management goals to make the business the world’s premier digital industrial company, as highlighted in General Electric’s corporate mission statement and corporate vision statement. On the other hand, this SWOT analysis considers the growth of the renewable energy market an opportunity for the company to grow by innovating its aviation technologies to adapt to this energy trend. Doing so may require adjustments to the divisions or segments of General Electric’s organizational structure (corporate structure). Moreover, the growth of developing markets is an external strategic factor that corresponds to potential increases in the company’s revenues. For example, new strategies to penetrate Asian markets can grow GE’s overall revenues. The opportunities identified in this component of the SWOT analysis indicate General Electric Company’s potential business growth through innovation and market penetration.
Threats Facing GE (External Factors)
Threats are external strategic factors that impose limits and challenges in General Electric’s business. This component of the SWOT analysis determines the kinds of threats that can decrease the company’s capacity and success. The analysis shows growth barriers that GE’s managers must address through strategies that enhance business capabilities and competitiveness. The following threats are considered in the case of General Electric Company:
- Strong competition
- Disruption involving digital technologies
- Instability of the oil and gas industry
General Electric faces strong competition with a wide variety of companies. Strong competitive forces typically arise from the activities of aggressive, popular, or highly innovative firms, as illustrated in the Five Forces analysis of General Electric. The company competes with Rolls-Royce and Pratt & Whitney, as well as 3M and Siemens. IBM’s artificial intelligence and digital services also affect GE’s competitive environment considered in this SWOT analysis. General Electric’s management needs to continually develop strategies that effectively respond to the changing competitive landscape.
Disruption involving digital technologies is another threat that affects GE. In this SWOT analysis case, such a threat pertains to new technological tools that alter market dynamics. For example, publicly available and open-source software influences the market for digital equipment, avionics, and other products. This threat can disrupt the industry and create opportunities for new competitors against General Electric.
Moreover, the instability of the oil and gas industry threatens the company’s revenues, considering that fuel costs influence the market for aircraft engines and components. Nonetheless, GE can benefit from this external strategic factor by innovating for products’ fuel efficiency. This factor and the other threats shown in this component of the SWOT analysis of General Electric Company require managers to develop strategies and solutions for business resilience.
Summary & Recommendations – SWOT Analysis of General Electric Company
Summary. The internal strategic factors identified in this SWOT analysis of General Electric reflect business capabilities that support long-term growth, given current industry conditions. For example, the company’s strong research and development processes are a time-tested strength that supports competitive advantages and leadership in various markets. However, General Electric’s weaknesses present barriers to achieving long-term dominance. Nonetheless, the company can address its weaknesses through market penetration, innovation, partnerships, and other strategies. On the other hand, the external strategic factors identified in this SWOT analysis create conditions wherein General Electric can grow. For example, the company can grow based on innovation that capitalizes on the renewable energy market, despite the threat of issues linked to the oil and gas industry.
Recommendations. The strengths, weaknesses, opportunities, and threats (SWOT) in the case of General Electric emphasize the necessity of a strategic approach for growing and expanding the business in the face of rapidly changing industry environments. Managers need to focus on growth and stability that capitalize on business strengths and opportunities and develop solutions to protect GE from the effects of weaknesses and threats. Based on the internal and external strategic factors determined in this SWOT analysis, it is recommended that General Electric Company:
- Increase its degree of penetration in developing markets.
- Increase R&D for higher efficiency of products.
- Improve the supply chain to prevent disruptions.
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