General Electric’s (GE) Generic Competitive Strategy & Growth Strategies

General Electric GE generic competitive strategy, competitive advantage, intensive growth strategies, aviation business analysis case study
General Electric’s (GE) F-110 turbofan engine used in an F-16 aircraft. General Electric Company’s generic competitive strategy (Porter’s model) and intensive growth strategies (Ansoff matrix) lead to business competitive advantages in the aviation/aerospace industry. (Photo: Public Domain)

General Electric Company (GE) has a generic competitive strategy that, along with intensive growth strategies, ensures business growth in global markets. Michael Porter’s generic strategies are used to develop and maintain firms’ competitive advantages. In this case, GE uses its generic strategy for competitive advantage in the aerospace/aviation industry. On the other hand, based on the Ansoff Matrix, a company’s intensive growth strategies are employed to support and sustain business growth. General Electric relies on product development as a major growth factor through the years. The combination of intensive growth strategies used in GE’s business facilitates continued growth despite changing economic conditions and challenges involving competitors, like Rolls-Royce and Siemens. These strategies boost business resilience to reach the strategic goals of General Electric’s mission statement and vision statement. For long-term growth and competitiveness, General Electric’s generic competitive strategy and intensive growth strategies must remain relevant to industry conditions.

General Electric’s management uses the company’s generic competitive strategy and intensive growth strategies to determine business tactics and operational approaches. For example, GE’s operations management approaches are evaluated based on how they contribute to the competitive advantage and growth of the business. The managerial aim is to address the external forces coming from General Electric’s competitors.

General Electric’s Generic Competitive Strategy (Porter Model)

General Electric’s main generic strategy for competitive advantage is differentiation. In this strategy, the company’s goal is to attract target customers to products that are special and unique. These products are made through research and development that GE is known for. For example, the company has advanced research and development processes for products in the aviation industry. Because of its focus on research and development, General Electric Company has one of the biggest portfolios of company-owned patents in the United States. Also, this generic competitive strategy involves offering products to many market segments. GE maximizes sales based on a larger customer base. This generic competitive strategy influences other strategies and tactics in the business, such as General Electric’s marketing mix or 4Ps. GE aligns its intensive growth strategies with the competitive advantage targets based on strategic differentiation objectives.

One of the strategic objectives in using the differentiation generic competitive strategy is to intensify General Electric’s research and development programs. This objective supports product uniqueness necessary to capture and retain customers in GE’s target markets. Another strategic objective based on this generic strategy is to strengthen the company’s presence in market segments. For example, General Electric can utilize its competitive advantage to maximize customer loyalty to the GE brand in the avionics market. Moreover, an additional strategic objective is to implement intensive growth strategies that contribute to General Electric’s business growth while enabling the successful application of the differentiation generic competitive strategy.

General Electric’s Intensive Growth Strategies

Product Development (Primary). Product development is the primary intensive growth strategy in General Electric’s business. Growth is achieved through new products that increase the company’s sales revenues. For example, under this intensive strategy, GE maintains high-productivity research and development processes. These processes ensure a leading edge against competitors in the aerospace industry, thereby contributing to the strengths identified in the SWOT analysis of General Electric. The differentiation generic competitive strategy requires that product development must focus on product uniqueness. In this regard, a strategic objective based on product development is to integrate cutting-edge technologies in every new product that General Electric develops.

Market Penetration (Secondary). General Electric Company implements market penetration as its secondary intensive growth strategy. In market penetration, the company grows by increasing its customer base in current markets. For example, General Electric applies this intensive strategy through marketing campaigns that aim to add new customers and corresponding accounts. In this way, GE grows its revenue base despite competitive forces. The generic competitive strategy of differentiation enables General Electric to succeed in implementing market penetration. For instance, through competitive advantages based on product uniqueness and advanced features, GE penetrates the market for jet engines. A strategic objective based on market penetration is to increase General Electric’s aggressiveness in marketing its products against the products of competitors, like Rolls-Royce, 3M, and Siemens.

Diversification. Diversification is a minor intensive growth strategy in General Electric’s operations. In diversification, growth occurs through new businesses. For example, through this intensive strategy, General Electric entered multiple industries throughout its business history, with operations in the energy, aerospace/aviation, healthcare, electric lighting, oil and gas, and transportation industries. However, the company is currently in a spin-off process. Diversification has only a minor role in contributing to GE’s growth because it is applied only infrequently, as it entails major investment and organizational change, among other challenges. General Electric’s differentiation generic competitive strategy is applied every time diversification happens, such as when the company develops new products upon adding a new industry to its portfolio. A strategic objective based on diversification is to spread risk across various industries and markets to minimize market-specific risk exposure. The PESTEL/PESTLE analysis of General Electric shows that various industries develop business opportunities based on technological advancement. In diversification, GE continuously searches for such opportunities in industries where it currently does not operate.

Market Development. General Electric Company implements market development as a minor intensive growth strategy. In this strategy, the company grows by establishing new applications, new markets, or new market segments for its current products. For example, this intensive strategy is applied whenever GE introduces its aviation technologies into the transportation industry and creates a new market or market segment, accordingly. However, market development has a minor role in the business because General Electric focuses on advancing products in its current industries of operations. The generic competitive strategy of differentiation helps facilitate market development for GE products. Differentiation creates competitive advantages that General Electric uses to successfully enter new markets or market segments. A strategic objective based on market development is to create new revenue streams by developing hybrid or new applications of General Electric’s current products.