The Impact of Globalization on General Electric (GE), With Recommendations

The PEST factors can be considered as push factors for globalisation. Convergence of political, economical, social and technological factors has caused the growth of globalisation.

These PEST factors merit strategic attention in various ways. Political factors include development of free trade and liberalization of global markets which promotes investments and trade across boundaries. This has opened global markets that could have otherwise been inaccessible. Technological factors include transport improvement, information technology enhancement and advancement in communications technologies. The internet and other forms of technology have enhanced trade across borders and boosted the sourcing of services and components from low-cost countries. Social factors that drive globalisation include consumer needs. There is always a trend in globalisation of consumers; the less cultural and more technical a product is, the more the standardized appeal of the product in the global market. Competitive factors are also part of the push factors for globalization. A global approach gives cost benefits.

General Electric (GE) has many opportunities due to globalisation. Global expansion is part of the company’s strategies to enhance growth. The company acquires other companies and transforms their business models using its own growth models, one of which is globalisation. Due to globalisation, the company managed to take advantage of global research infrastructure to attain good results with a common culture (Inkpen, 2009). Globalisation has also increased the market reach for the company, giving it an opportunity to capture international/global markets in order to ensure that the company’s portfolio of businesses generate growth and competitive advantage for the business.

There are some challenges though. The company has to experience about 20 to 30 percent failures in their global acquisitions. Furthermore, competition for the company in global markets is high.

However, the company can use some of its key competences and some business development approaches (strategies). The company uses diversification, market development and product development as key strategies to grow. It may also use market penetration to attain growth in existing markets. Furthermore, it was noted that the company has key competences in terms of personnel skills and financial resources. The problem of competition may be solved if the company provides differentiated offerings in the market. Differentiated offering may be considered as a source of competitive advantage for companies operating in a highly turbulent and volatile environment.

Therefore, as a general advice for the company, it is important that the firm should use is financial strength and the competency of its employees in terms of skills to enhance its product development, diversification and market penetration as well as providing differentiated offerings for its customers across the world.

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