Digitization of an Industrial Giant: GE Takes on Industrial Analytics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Digitization of an Industrial Giant: GE Takes on Industrial Analytics
The case describes General Electric's transformation from an industrial manufacturer to an industrial analytics giant. It opens in 2009 when CEO Jeff Immelt decides that GE, a hardware maker, needs to be more capable in software. The narrative traces his early efforts to consolidate and coordinate software capabilities in a central unit (GE Software Center) headed by Bill Ruh in Silicon Valley. It documents the realization of the potential for big data and analytics for customers to which GE has sold industrial equipment for decades. Opportunities related to 'predictive maintenance' seem attractive given the significant economic costs of unplanned maintenance and repair for GE customers. Equipment optimization through analytics also has potential to increase their margins, especially for those that face increased competition and lack pricing power. As GE roars down the runway to becoming the leading player in the digitization of industry,the question is can it reach the critical speed to break free of the tarmac and sustain flight?
Swot Analysis of "Digitization of an Industrial Giant: GE Takes on Industrial Analytics" written by J. Stewart Black, Anne-Marie Carrick includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ge Industrial facing as an external strategic factors. Some of the topics covered in Digitization of an Industrial Giant: GE Takes on Industrial Analytics case study are - Strategic Management Strategies, Change management, International business, Internet, Manufacturing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Digitization of an Industrial Giant: GE Takes on Industrial Analytics casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Digitization of an Industrial Giant: GE Takes on Industrial Analytics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Digitization of an Industrial Giant: GE Takes on Industrial Analytics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ge Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ge Industrial 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics can be done for the following purposes –
1. Strategic planning using facts provided in Digitization of an Industrial Giant: GE Takes on Industrial Analytics case study
2. Improving business portfolio management of Ge Industrial
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 Industrial
Strengths Digitization of an Industrial Giant: GE Takes on Industrial Analytics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ge Industrial in Digitization of an Industrial Giant: GE Takes on Industrial Analytics Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ge Industrial 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.
Ability to lead change in Strategy & Execution field
– Ge Industrial is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ge Industrial in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Ge Industrial is one of the leading recruiters in the industry. Managers in the Digitization of an Industrial Giant: GE Takes on Industrial Analytics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Digitization of an Industrial Giant: GE Takes on Industrial Analytics firm has clearly differentiated products in the market place. This has enabled Ge Industrial to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ge Industrial to invest into research and development (R&D) and innovation.
Analytics focus
– Ge Industrial 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 J. Stewart Black, Anne-Marie Carrick 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.
Strong track record of project management
– Ge Industrial is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Ge Industrial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ge Industrial 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.
Operational resilience
– The operational resilience strategy in the Digitization of an Industrial Giant: GE Takes on Industrial Analytics Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Ge Industrial is one of the most innovative firm in sector. Manager in Digitization of an Industrial Giant: GE Takes on Industrial Analytics Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Ge Industrial 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.
Effective Research and Development (R&D)
– Ge Industrial 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Ge Industrial has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ge Industrial to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Digitization of an Industrial Giant: GE Takes on Industrial Analytics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Digitization of an Industrial Giant: GE Takes on Industrial Analytics are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Digitization of an Industrial Giant: GE Takes on Industrial Analytics, is just above the industry average. Ge Industrial 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.
Low market penetration in new markets
– Outside its home market of Ge Industrial, firm in the HBR case study Digitization of an Industrial Giant: GE Takes on Industrial Analytics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Ge Industrial 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Digitization of an Industrial Giant: GE Takes on Industrial Analytics, it seems that the employees of Ge Industrial 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.
Lack of clear differentiation of Ge Industrial products
– To increase the profitability and margins on the products, Ge Industrial needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Digitization of an Industrial Giant: GE Takes on Industrial Analytics has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ge Industrial 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ge Industrial supply chain. Even after few cautionary changes mentioned in the HBR case study - Digitization of an Industrial Giant: GE Takes on Industrial Analytics, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ge Industrial vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Ge Industrial 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.
Skills based hiring
– The stress on hiring functional specialists at Ge Industrial has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Digitization of an Industrial Giant: GE Takes on Industrial Analytics 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics can leverage the sales team experience to cultivate customer relationships as Ge Industrial is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Ge Industrial is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ge Industrial needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ge Industrial to focus more on services rather than just following the product oriented approach.
Opportunities Digitization of an Industrial Giant: GE Takes on Industrial Analytics | 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics are -
Better consumer reach
– The expansion of the 5G network will help Ge Industrial to increase its market reach. Ge Industrial 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.
Building a culture of innovation
– managers at Ge Industrial 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.
Leveraging digital technologies
– Ge Industrial 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.
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. Ge Industrial can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Ge Industrial 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 Ge Industrial 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 Ge Industrial to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ge Industrial in the consumer business. Now Ge Industrial can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Ge Industrial has opened avenues for new revenue streams for the organization in the industry. This can help Ge Industrial to build a more holistic ecosystem as suggested in the Digitization of an Industrial Giant: GE Takes on Industrial Analytics case study. Ge Industrial can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ge Industrial can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ge Industrial 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, Digitization of an Industrial Giant: GE Takes on Industrial Analytics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ge Industrial 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.
Using analytics as competitive advantage
– Ge Industrial 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ge Industrial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ge Industrial 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.
Threats Digitization of an Industrial Giant: GE Takes on Industrial Analytics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Digitization of an Industrial Giant: GE Takes on Industrial Analytics are -
Shortening product life cycle
– it is one of the major threat that Ge Industrial is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Ge Industrial 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.
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.
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. Ge Industrial 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.
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 Industrial business can come under increasing regulations regarding data privacy, data security, etc.
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 Ge Industrial.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ge Industrial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Industrial in the Strategy & Execution sector and impact the bottomline 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. Ge Industrial needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Ge Industrial 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Industrial 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 Industrial 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.
Weighted SWOT Analysis of Digitization of an Industrial Giant: GE Takes on Industrial Analytics 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics 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 Digitization of an Industrial Giant: GE Takes on Industrial Analytics 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 Industrial needs to make to build a sustainable competitive advantage.
