General Electric's Expansion in the Middle East SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of General Electric's Expansion in the Middle East
In July 2012, a senior manager in the corporate strategy team of General Electric (GE) was wondering what changes he should recommend for its strategic plans in the MENAT region (the Middle East, North Africa, Turkey and Pakistan). First, the senior corporate strategist wanted to get a better understanding of how regional management had succeeded in growing its business despite the barriers it had faced, such as political instability, difficulties in dealing with family-owned firms with affiliate relationships, and institutional corruption. Second, given predictions of sluggish growth in developed markets, it was clear that GE MENAT would be an increasingly large part of GE's revenue base. The key challenge was how to continue to sustain GE MENAT's growth rate while maintaining the high corporate standards for which GE was known. Assem Safieddine is affiliated with American University of Beirut.
Authors :: Assem Safieddine, Shadi Rhayem, Ken Mark
Swot Analysis of "General Electric's Expansion in the Middle East" written by Assem Safieddine, Shadi Rhayem, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ge Menat facing as an external strategic factors. Some of the topics covered in General Electric's Expansion in the Middle East case study are - Strategic Management Strategies, Emerging markets, Public relations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the General Electric's Expansion in the Middle East casestudy better are - – wage bills are increasing, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption, there is increasing trade war between United States & China,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of General Electric's Expansion in the Middle East
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in General Electric's Expansion in the Middle East case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ge Menat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ge Menat operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of General Electric's Expansion in the Middle East can be done for the following purposes –
1. Strategic planning using facts provided in General Electric's Expansion in the Middle East case study
2. Improving business portfolio management of Ge Menat
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ge Menat
Strengths General Electric's Expansion in the Middle East | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ge Menat in General Electric's Expansion in the Middle East Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ge Menat are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Ge Menat is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ge Menat is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in General Electric's Expansion in the Middle East Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Ge Menat is one of the most innovative firm in sector. Manager in General Electric's Expansion in the Middle East Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– General Electric's Expansion in the Middle East firm has clearly differentiated products in the market place. This has enabled Ge Menat to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ge Menat to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Ge Menat has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study General Electric's Expansion in the Middle East - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Ge Menat has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in General Electric's Expansion in the Middle East HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Ge Menat has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ge Menat has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Ge Menat
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ge Menat does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ge Menat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ge Menat has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Ge Menat is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Ge Menat in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Ge Menat has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in General Electric's Expansion in the Middle East Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses General Electric's Expansion in the Middle East | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of General Electric's Expansion in the Middle East are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study General Electric's Expansion in the Middle East, in the dynamic environment Ge Menat has struggled to respond to the nimble upstart competition. Ge Menat has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Ge Menat has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Aligning sales with marketing
– It come across in the case study General Electric's Expansion in the Middle East that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case General Electric's Expansion in the Middle East can leverage the sales team experience to cultivate customer relationships as Ge Menat is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study General Electric's Expansion in the Middle East, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Ge Menat has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Ge Menat needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Ge Menat products
– To increase the profitability and margins on the products, Ge Menat needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Assem Safieddine, Shadi Rhayem, Ken Mark suggests that, Ge Menat is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Ge Menat has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ge Menat even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Ge Menat is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ge Menat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ge Menat to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ge Menat is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study General Electric's Expansion in the Middle East can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities General Electric's Expansion in the Middle East | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study General Electric's Expansion in the Middle East are -
Creating value in data economy
– The success of analytics program of Ge Menat has opened avenues for new revenue streams for the organization in the industry. This can help Ge Menat to build a more holistic ecosystem as suggested in the General Electric's Expansion in the Middle East case study. Ge Menat can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Ge Menat to increase its market reach. Ge Menat will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ge Menat can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, General Electric's Expansion in the Middle East, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Ge Menat has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ge Menat can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ge Menat to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Ge Menat can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ge Menat can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ge Menat can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Ge Menat can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ge Menat can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ge Menat is facing challenges because of the dominance of functional experts in the organization. General Electric's Expansion in the Middle East case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Ge Menat can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ge Menat in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Threats General Electric's Expansion in the Middle East External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study General Electric's Expansion in the Middle East are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ge Menat in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ge Menat business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Ge Menat has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ge Menat needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Ge Menat demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Ge Menat is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Ge Menat high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ge Menat can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Ge Menat needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ge Menat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study General Electric's Expansion in the Middle East, Ge Menat may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ge Menat in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Ge Menat
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ge Menat.
Weighted SWOT Analysis of General Electric's Expansion in the Middle East Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study General Electric's Expansion in the Middle East needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study General Electric's Expansion in the Middle East is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study General Electric's Expansion in the Middle East is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of General Electric's Expansion in the Middle East is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ge Menat needs to make to build a sustainable competitive advantage.
