General Electric Company (GE): Business Model Canvas

Introduction

As we enter into the new decade, the business industry is rapidly evolving with the integration of technology and the increasing demand for sustainable solutions. Industries such as aviation, healthcare, renewable energy, and finance have witnessed notable growth and progress in recent years. The multinational corporation General Electric Company (GE) has been at the forefront of this development, providing innovative and sustainable solutions that enhance productivity while reducing environmental impact.

According to recent statistics, the aviation industry is expected to grow at a CAGR of around 5% in the upcoming years. On the other hand, the healthcare industry is projected to reach $11.9 trillion globally by 2023. Additionally, the renewable energy sector is estimated to witness a CAGR of 13.1% during the forecast period of 2020 to 2025. Meanwhile, the finance industry is embracing technological advancements, with a projected growth of $26.5 billion globally by 2022.

With a strong brand, global network of suppliers, partners, and customers, and advanced technology, GE has positioned itself to capitalize on these growing industries. Its value proposition is to provide sustainable and innovative solutions to enhance productivity and reduce environmental impact. In this blog post, we will be discussing the business model of GE and its key resources, primary activities, revenue streams, cost structure, partnerships, and customer segments.

Key Partnerships

General Electric Company (GE) understands that partnerships play a vital role in sustaining its core competencies while expanding its capabilities to provide value to its customers. To achieve this, GE engages in several partnerships with various organizations that offer expertise that complements its products and services.

• Suppliers: GE relies on its suppliers to provide it with raw materials, spare parts, and other components. The company fosters relationships with suppliers to ensure high-quality materials, timely delivery, and competitive prices.
• Research and Development Partnerships: GE collaborates with research institutions and other companies to advance its research and development agenda, to create new technologies, improve existing products and services, and provide better solutions to customers.
• Channel Partners: GE partners with distributors, resellers, and other organizations to reach new markets, create new distribution channels, and increase sales.
• Affiliates: GE has subsidiaries that provide specialized services to customers in different locations or industries, including GE Healthcare, GE Renewable Energy, and GE Aviation.
• Joint Ventures: GE enters into joint ventures with other companies to expand its capacity or expertise in specific areas. For instance, CFM International, a joint venture between GE and Safran, develops, manufactures, and sells engines for commercial and military aircraft.
• Government Partnerships: GE partners with governments to provide public services, such as infrastructure, healthcare, energy, and transportation, and to comply with regulations, laws, and environmental standards.

By partnering with different organizations, GE can leverage its strengths while minimizing its weaknesses, improve its competitiveness, lower its costs, and enhance its value proposition to customers.

Key Activities

• Research and Development: General Electric invests heavily in research and development to create innovative products and technologies. This includes developing new materials, improving energy efficiency, and innovating new manufacturing processes.
• Manufacturing: GE is a global leader in manufacturing a wide range of products including aircraft engines, power generators, and medical equipment. The company has manufacturing facilities in over 170 countries around the world.
• Sales and Marketing: GE has a global sales and marketing team that promotes the company's products and services to customers around the world. This includes targeting new customers, managing relationships with existing customers, and developing new sales channels.
• Supply Chain Management: GE has a complex supply chain that involves sourcing materials and components from a wide range of suppliers. The company works closely with suppliers to ensure that they meet the company's quality standards and follows ethical business practices.
• Service and Support: After-sales service is a critical part of GE's business model. The company provides maintenance, repair, and other support services to ensure that its products and solutions are operating at peak performance. This includes offering training programs to help customers get the most out of their GE products.
• Financial Management: GE has a diverse financial portfolio that includes financing options for customers, as well as investments in various industries such as healthcare and energy. The company utilizes financial management practices to ensure that it remains profitable and financially stable.
• Human Resources and Talent Management: GE's success depends on the skills and commitment of its employees. The company has a range of programs to recruit, develop, and retain the best talent. This includes offering training and education programs, career development opportunities, and competitive compensation and benefits packages.

These key activities form the foundation of General Electric's business model. By focusing on innovation, manufacturing, sales and marketing, supply chain management, service and support, financial management, and talent management, GE is able to create value for its customers, employees, and shareholders.

Key Resources

General Electric Company (GE) prides itself on being a global leader in various industries, and its success is attributed to its diverse and extensive key resources. The following are the key resources that GE relies on to create sustainable value for its stakeholders.

• Human Capital: GE's people are its most valuable resource. With a global workforce of over 200,000 employees, GE's human capital has diverse skillsets, experiences, and perspectives. The company invests heavily in employee training and development to ensure its people have the knowledge and skills needed to innovate and solve problems.
• R&D: GE invests heavily in research and development activities to create innovative products, services, and solutions that cater to customers' needs. The company has six R&D centres globally, focussed on advancing various fields such as healthcare, energy, aviation, and transportation.
• Brand Equity: GE is a well-established brand globally, and this is a valuable resource for the company. The company has built its brand reputation over the years through a culture of innovation, quality, and reliability. The GE brand is associated with excellence, and customers have trust in the company's products and services.
• Financial Capital: GE's financial resources are a critical component of the company's success. The company has access to significant financial resources that help it fund its various operations, investments, and growth initiatives. With strong cash flows and diverse sources of funding, GE has the financial muscle to remain resilient even during challenging economic times.
• Suppliers: GE's suppliers are an integral part of the company's operations. The company depends on various suppliers for raw materials, components, and other resources needed to manufacture its products. GE has built strong relationships with its suppliers, and this has enabled the company to leverage their capabilities to improve efficiency and reduce costs.
• Intellectual Property: GE's intellectual property is a valuable resource, and the company holds numerous patents and trademarks globally. The company leverages its IP to protect its innovations and prevent competitors from copying its products or services.
• Infrastructure: GE has an extensive infrastructure that includes manufacturing facilities, service centres, and distribution networks globally. The company's infrastructure helps it reach a broad customer base, reduce costs, and improve efficiency.

GE's key resources enable the company to create value for its stakeholders by delivering innovative products and services that meet customers' needs. The company's focus on R&D, human capital, brand equity, financial capital, suppliers, intellectual property, and infrastructure provides a robust foundation for its operations and growth initiatives.

Value Propositions

As a leading industrial conglomerate, GE provides a wide range of cutting-edge solutions that empower businesses and societies to progress and grow. Our commitment to innovation, technology and sustainability has enabled us to strengthen our value proposition and position ourselves as a trusted partner for our customers.

• Advanced Technology: Our portfolio of products and services incorporates some of the most advanced technology in the world. We invest heavily in research and development to ensure that our offerings meet the needs of our clients and create value for their businesses.
• Operational Efficiency: We help our customers streamline their processes and optimize their operations, resulting in significant cost savings and improved productivity.
• Sustainability: At GE, sustainability is at the core of everything we do. Our products and services are designed to help customers reduce their environmental footprint and meet regulatory requirements.
• Collaboration: We work closely with our customers to develop bespoke solutions that best fit their unique requirements. Our collaborative approach ensures that we provide maximum value and impact for our customers.
• Global Reach: With a presence in more than 180 countries, we have the capability to serve our customers wherever they operate, providing them with access to a vast array of products, services and expertise.
• Industry Expertise: With more than a century of experience in a variety of industries, we have developed an unparalleled understanding of the challenges and opportunities facing our customers. This expertise allows us to deliver tailored solutions that address specific needs and drive business success.

Our value proposition is further enhanced by our commitment to quality, safety and integrity. We are dedicated to delivering products and services that meet the highest standards of excellence, and to doing business in a responsible and ethical manner.

Customer Relationships

At General Electric Company, we are committed to building and maintaining long-term relationships with our customers. Our goal is to exceed their expectations by providing exceptional customer service and support throughout the entire customer journey.

Personalized Interaction: Our customer service representatives are trained to provide personalized interactions with customers, understanding their needs and requirements, and working with them to find the best solutions that meet their unique needs.

Customer Education: We believe in educating our customers about our products and services so they can make informed decisions. We offer product demonstrations and training sessions to help customers understand how to use our products to their full potential.

Feedback: We actively seek out feedback from our customers through surveys and other methods. This allows us to understand their needs, preferences, and pain points so we can improve our products and services and better meet our customers' needs.

Continuous Support: We offer continuous support to our customers, even after they have made a purchase. This includes ongoing technical support, maintenance services, and product upgrades.

Community Building: We believe in building communities of customers who can learn from each other, share insights, and support each other. We offer forums, online communities, and other resources where our customers can connect and collaborate.

• Customer Segments: Our customer base includes businesses, governments, and consumers across a variety of industries, including healthcare, energy, transportation, and aviation.
• Customer Channels: We reach our customers through a range of channels, including online sales, direct sales, partners and distributors, and customer service centers.
• Key Activities: Our key activities that support customer relationships include customer service, product demonstrations, technical support, and community building.

Channels:

General Electric Company (GE) utilizes various channels to reach its customers effectively. The following channels are used:

• Distribution Channels: GE has a vast network of distributors and resellers that help in distributing their products and services across different regions. These distributors are responsible for delivering the products to the end-users and provide after-sales services.
• Direct Sales: GE has a dedicated sales team that is responsible for running sales campaigns, interacting with potential customers, and closing deals. The sales team operates through various marketing and promotional channels such as trade shows, advertisements, email marketing, and social media.
• Online Presence: GE has a strong online presence through its website and social media platforms. The website provides information on their products and services and allows customers to purchase products or request services. The social media channels are used for engagement with customers and to provide information on the latest offerings from GE.
• Partner Networks: GE has a network of strategic partners who aid in expanding the company's reach, promoting its brand, and increasing sales. These partners include other companies in the same industry, suppliers, and vendors that offer complementary products and services.
• Service Centers: GE has service centers situated in various locations that cater to customers with repair and maintenance needs. These service centers also provide training to customers who want to learn how to use GE's products effectively.
• Call Centers: GE operates a call center to provide customer support and to handle inquiries on their products and services. The customer support team is trained to resolve complaints and provide technical support to customers.

By using the above channels, GE ensures that its products and services are easily accessible to its customers, and customer satisfaction is achieved.

Customer Segments

General Electric Company (GE) caters to diverse customer segments across a range of industries. The following are the primary customer segments of GE's business model:

• Industrial Customers: GE provides industrial solutions to customers in various sectors such as aviation, power, oil and gas, transportation, and healthcare.
• Commercial Customers: GE's commercial customers include retail and hospitality businesses, financial institutions, and government agencies.
• Consumer Customers: GE manufactures and sells appliances, such as refrigerators and washing machines, to individual consumers.
• Energy Customers: GE provides energy products and services to customers in the renewable energy, electric power, and oil and gas industries.
• Healthcare Customers: GE offers healthcare technologies and solutions to hospitals, clinics, and physician practices.

Each customer segment has unique needs, and GE's business model leverages the company's diverse portfolio to tailor its offerings to these needs. For example, GE's industrial customers demand high-quality products and services that can help them reduce costs and increase efficiency. In contrast, GE's consumer customers are looking for affordable and reliable appliances that can make their lives easier and more convenient.

By understanding the needs of each customer segment and developing specialized solutions that meet those needs, GE has been able to maintain its position as a leader in many of the industries it serves.

Cost Structure

In order for General Electric Company to succeed in its business model, it is essential to have a clear understanding of cost structure. GE's cost structure is broken down into the following categories:

• Fixed Costs: These are the costs that do not vary with the level of output, like office rent, salaries of core employees, and administrative costs.
• Variable Costs: Variable costs are expenses that vary with production levels or sales volume. As GE develops and expands new technologies or product lines, variable costs can include research, labor, and materials used for product manufacturing.
• Operating Costs: Operating costs represent the ongoing expenses incurred in the process of running a business. This includes manufacturing costs, sales and marketing, research and development, and maintenance, among others.
• Direct Costs: Direct costs are costs that can be specifically linked to a particular project or product, such as salaries, raw materials, and production expenses.
• Indirect Costs: Indirect costs are those that are necessary for the production of products or services but cannot be directly attributed to a specific project or product, such as utilities, rent, and other overhead expenses.

GE's cost structure is designed to meet the company's goals and objectives, while keeping costs low and maximizing profits. By carefully managing costs, GE can invest in research and development, expand new product lines, and stay competitive in a rapidly changing business environment.

Revenue Streams

General Electric Company (GE) generates revenue through a variety of streams. These streams are generated through the sale of products and services, and include the following:

• Products: Revenue is generated through the sale of various products including aircraft engines, oil and gas equipment, power generation equipment, and appliances.
• Services: GE offers various services to customers, including repairs and maintenance for its products, as well as consulting and financial services in areas such as healthcare and aviation.
• Software: GE also generates revenue through the sale of software that helps customers optimize their operations, such as data analytics and industrial internet of things (IIoT) technologies.
• Licensing: GE licenses its technology and intellectual property to other companies, which generates revenue through royalties and licensing fees.
• Investments: GE also generates revenue through its investments in various ventures and partnerships, and through its ownership of various businesses and subsidiaries.

In addition to these revenue streams, GE also generates revenue through its global reach, as it operates in over 180 countries around the world.

Overall, GE's diverse range of revenue streams allows it to weather changes in any one particular market, and enables it to continue innovating and investing in new technologies and industries.

Conclusion

GE's Business Model Canvas analysis has shed light on the company's strengths, weaknesses, opportunities, and potential threats. The company's core competencies include its extensive product portfolio, a global presence, financial stability, and a strong brand reputation. However, GE faces several challenges, including declining revenues, increasing competition, and a lack of focus on core businesses.

The canvas has also highlighted areas of improvement for GE, including diversifying its product portfolio, streamlining its business model for better efficiency and profitability, and identifying new revenue streams. GE can leverage its existing strengths to overcome these challenges by investing in technological innovation, exploring new markets and partnerships, and creating a more agile and customer-centric business structure.

• Overall, the Business Model Canvas has provided valuable insights into GE's strategy and potential for growth.
• The canvas can serve as a framework for ongoing analysis and strategic planning, helping GE to adapt to changing market conditions and stay competitive in the long term.
• By leveraging its core competencies and addressing its weaknesses, GE can unlock new opportunities and drive sustainable growth for the future.