GE China Technology Center: Evolving Role in Global Innovation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of GE China Technology Center: Evolving Role in Global Innovation
This case describes how General Electric has developed its China Technology Center over the past decade. The case also elaborates on the changing role of the China Technology Center in General Electric's global research and development strategy. In 2000, General Electric set up its China Technology Center in Shanghai after bringing its technologies and products to China. In the first few years, the focus of the China Technology Center was to build local engineering teams, learn about customer needs, determine successful marketing strategies, and to develop relationships with local suppliers in order to reduce costs. Over time, the China Technology Center developed its "In China for China" strategy by adjusting its own products and designs to adapt to the local market, while still developing innovative technologies and products to address China's toughest challenges - such as those encountered in the healthcare industry. This strategy was very successful; some innovations from the China Technology Center were used in other emerging markets as well as in U.S. and European markets - a process that is known as reverse innovation. Haiyang Li is affiliated with Rice University.
Swot Analysis of "GE China Technology Center: Evolving Role in Global Innovation" written by Haiyang Li, Rebecca Y. Chung includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that China Center facing as an external strategic factors. Some of the topics covered in GE China Technology Center: Evolving Role in Global Innovation case study are - Strategic Management Strategies, Market research and Strategy & Execution.
Some of the macro environment factors that can be used to understand the GE China Technology Center: Evolving Role in Global Innovation casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, increasing energy prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, etc
Introduction to SWOT Analysis of GE China Technology Center: Evolving Role in Global Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GE China Technology Center: Evolving Role in Global Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Center, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Center 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 GE China Technology Center: Evolving Role in Global Innovation can be done for the following purposes –
1. Strategic planning using facts provided in GE China Technology Center: Evolving Role in Global Innovation case study
2. Improving business portfolio management of China Center
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 China Center
Strengths GE China Technology Center: Evolving Role in Global Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Center in GE China Technology Center: Evolving Role in Global Innovation Harvard Business Review case study are -
High brand equity
– China Center has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Center to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that China Center has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the China Center 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.
Training and development
– China Center has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in GE China Technology Center: Evolving Role in Global Innovation 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For China Center digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Center 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.
Diverse revenue streams
– China Center is present in almost all the verticals within the industry. This has provided firm in GE China Technology Center: Evolving Role in Global Innovation case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– China Center has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Center 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.
Learning organization
- China Center 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 China Center is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GE China Technology Center: Evolving Role in Global Innovation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Strategy & Execution industry
– GE China Technology Center: Evolving Role in Global Innovation firm has clearly differentiated products in the market place. This has enabled China Center to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped China Center to invest into research and development (R&D) and innovation.
Organizational Resilience of China Center
– The covid-19 pandemic has put organizational resilience at the centre of everthing that China Center does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– China Center is one of the most innovative firm in sector. Manager in GE China Technology Center: Evolving Role in Global Innovation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– China Center is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Haiyang Li, Rebecca Y. Chung can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses GE China Technology Center: Evolving Role in Global Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GE China Technology Center: Evolving Role in Global Innovation are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study GE China Technology Center: Evolving Role in Global Innovation, it seems that the employees of China Center don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– After analyzing the HBR case study GE China Technology Center: Evolving Role in Global Innovation, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study GE China Technology Center: Evolving Role in Global Innovation, in the dynamic environment China Center has struggled to respond to the nimble upstart competition. China Center has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study GE China Technology Center: Evolving Role in Global Innovation 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 GE China Technology Center: Evolving Role in Global Innovation can leverage the sales team experience to cultivate customer relationships as China Center is planning to shift buying processes online.
High cash cycle compare to competitors
China Center has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the GE China Technology Center: Evolving Role in Global Innovation HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though China Center has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of China Center is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. China Center needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Center to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– China Center has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, China Center 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.
Low market penetration in new markets
– Outside its home market of China Center, firm in the HBR case study GE China Technology Center: Evolving Role in Global Innovation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study GE China Technology Center: Evolving Role in Global Innovation, is just above the industry average. China Center needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities GE China Technology Center: Evolving Role in Global Innovation | 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 GE China Technology Center: Evolving Role in Global Innovation are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. China Center can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Center can use these opportunities to build new business models that can help the communities that China Center operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– China Center can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GE China Technology Center: Evolving Role in Global Innovation suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– China Center has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study GE China Technology Center: Evolving Role in Global Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Center to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– China Center 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. China Center can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. China Center 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. China Center 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Center 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, GE China Technology Center: Evolving Role in Global Innovation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at China Center 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.
Manufacturing automation
– China Center can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Center to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for China Center to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help China Center to increase its market reach. China Center 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Center can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats GE China Technology Center: Evolving Role in Global Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GE China Technology Center: Evolving Role in Global Innovation are -
Technology acceleration in Forth Industrial Revolution
– China Center has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, China Center 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents China Center with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. China Center will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– China Center 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of China Center.
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 China Center in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of China Center
– 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 China Center.
Stagnating economy with rate increase
– China Center can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. China Center can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study GE China Technology Center: Evolving Role in Global Innovation, China Center 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 .
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. China Center needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 China Center business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of GE China Technology Center: Evolving Role in Global Innovation 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 GE China Technology Center: Evolving Role in Global Innovation 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 GE China Technology Center: Evolving Role in Global Innovation 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 GE China Technology Center: Evolving Role in Global Innovation 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 GE China Technology Center: Evolving Role in Global Innovation 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 China Center needs to make to build a sustainable competitive advantage.
