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

General Electric GE generic strategy, Porter’s, competitive advantage, intensive growth strategies, electric lighting case study analysis
General Electric’s (GE) F-110 turbofan engine used in an F-16 aircraft. General Electric Company’s generic strategy (Porter’s model) for competitive advantage and intensive strategies for growth lead to business competitiveness in the energy, oil and gas, electric lighting, healthcare, aviation/aerospace, and transportation industries. (Photo: Public Domain)

General Electric Company (GE) has a generic strategy for competitive advantage that, along with intensive growth strategies, ensures the conglomerate’s growth in global markets. Michael Porter’s generic strategies are used to develop and maintain firms’ competitive advantage. In this case, GE uses its generic strategy for competitive advantage in the energy, oil and gas, aerospace/aviation, transportation, healthcare, and electric lighting industries. On the other hand, a company’s intensive growth strategies are employed to support and sustain business growth. For example, General Electric relies on diversification as a major growth factor through the years. The combination of intensive strategies used in GE’s business facilitates continued growth despite changing economic conditions and competitive challenges, considering competitors like 3M and Siemens. These strategies boost the company’s resilience as one of the biggest diversified businesses in the world. Nonetheless, for long-term growth and competitiveness in its industries, General Electric’s intensive strategies and generic competitive strategy must remain relevant to industry situations.

General Electric’s management personnel use the company’s generic strategy and intensive strategies to determine the appropriateness of 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, such as Siemens and 3M.

General Electric Company’s Generic Strategy (Porter’s 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 special and unique through research and development that GE is known for. For example, the company has advanced research and development processes for products in the healthcare and aviation industries. Because of its focus on research and development, General Electric Company is among the firms that have the highest number of company-owned patents in the United States. Also, this generic competitive strategy involves offering products to many market segments. In this way, GE maximizes sales based on a larger customer base. This generic strategy influences other strategies and tactics in the business, such as General Electric’s marketing mix or 4Ps. Also, 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 Company’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 electric lighting industry. Moreover, a strategic objective is to implement intensive strategies that contribute to General Electric’s business growth while enabling the successful application of the differentiation generic competitive strategy.

General Electric Company’s Intensive Strategies (Intensive Growth Strategies)

Product Development (Primary). Product development is the primary intensive growth strategy in General Electric Company’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, energy, oil and gas and other industries, 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 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 electric lighting, healthcare, and aerospace/aviation industries. A strategic objective based on market penetration is to increase General Electric’s aggressiveness in marketing its products against the products of competitors like 3M and Siemens.

Diversification. Diversification is a minor or supporting intensive growth strategy in General Electric Company’s operations. In diversification, growth occurs through new businesses. For example, through this intensive strategy, General Electric has entered multiple industries throughout its history. As a result, the company now operates in the energy, aerospace/aviation, healthcare, electric lighting, oil and gas, and transportation industries. However, 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 considerations. 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. 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 supporting or 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 strategy of differentiation helps facilitate market development for GE products. For instance, differentiation creates competitive advantage 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.