A Strategic Analysis of GE Healthcare Essay Example for Free

A Strategic Analysis of GE Healthcare Essay GE Healthcare is a unit of the wider General Electric Company. It has a global orientation, employing more than 46, 000 staff committed to serving healthcare professionals and patients in over 100 countries. It is headquartered in the United Kingdom (UK)-the first GE business segment outside the United States. It has a turnover of approximately $ 17 billion. The headquarters hosts GE healthcare corporate offices as well as finance, sales, global sourcing departments, X-Ray marketing, manufacturing, design and shipping. The finance and sales departments at the headquarters handle GE Healthcare’s high level decisions, but each modality often has its own similar departments. The global sourcing department handles all purchasing for the firm. GE Healthcare provides a variety of products services namely Technologies in medical imaging, diagnostics in medicine, systems for monitoring patients, solutions for improving performance, discovering drugs, and technologies to manufacture biopharmaceuticals. It also provides X-Ray products which include; radiography, fluoroscopy, vascular, cardiology, and the Mobile C-Arm machine. At present, GE Healthcare has six major business units; Global Diagnostic Imaging Unit: with its headquarters in the US, its business includes; digital mammography, X-ray services, Magnetic Resonance, Computed Tomography and technologies in Molecular Imaging. Integrated IT Solutions (IITS). Also headquartered in Barrington USA, IITS offers solutions in clinical and monetary information technologies, such as IT Products and service for departments, systems for picture Archiving and Communications, Information System solutions in Radiology and Cardiovascular in addition to practices and systems for managing revenue cycles. Medical Diagnostics Business Unit. This is headquartered in USA and its business includes; Researches in Medical Diagnostics, manufacturing and marketing imaging agents used in medical scanning techniques to view human body organs and tissues. Clinical Systems Unit. Also Headquartered in the US, this business offers a variety of healthcare services and technological solutions for medical officers and managers of healthcare systems. These include; Ultrasound, technologies for monitoring patients, bone densitometry, incubators, respiratory care and management of anesthesia. GE Healthcare Life Sciences Unit. This is headquartered in Sweden. It produces technologies for discovering drugs, biopharmaceutical manufacturing and cellular technologies. This division also manufactures equipment for the purifying biopharmaceuticals. GE Healthcare Surgery Business Unit. This division offers equipment and technologies for surgical care interventions, cardiac, systems and technologies for diagnostic monitoring, systems and data management technologies, to systems for mobile fluoroscopic imaging, instrumentations on 3D visual systems and navigation. Its headquarters are in Utah, USA, GE Healthcare has offices in different parts of the world. It also has primary regional operation centers in Paris, Japan, and India. (GE Healthcare Website; Retrieved December 2010) Business Strategy and Organizational Structure Analysis The world business environment is constantly changing, presenting new opportunities and challenges. This calls for competitive strategies in order to remain competitive. This section evaluates the opportunities and challenges presented by GE Healthcare organizational structure. In the Financial Year (FY) ending December 2007, the company recorded revenues of $16, 997 million; an increase of 2.7% over 2006. The operating profit was $3,056 million in 2007; drop of 2.7% from 2006. This GE business unit recorded revenues of $16,015 million, during the Financial Year (FY) ended December 2009. This reflected a decrease of 7.9% over FY 2008. The operating profit for the FY ended December 2009 was $2,240 million a decrease of 15.1% over FY 2008. Analysts attribute to both the complex internal and external environments of the company. I evaluate this argument by undertaking a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the company and integrating it to the Porters Fiv e Forces Model. Internal Analysis GE healthcare is one of the best firms in leadership development. The firm’s Human Resources Department is keen in developing a strong workforce that responds to changing global needs. It employs strategically employs and motivates the best qualified talents globally. It invests more than $100 million annually on educational training and staff development. The GE Healthcare Institute provides advanced training for GEHC employees and customers. It combines Technical training, Applications and Leadership trainings. More than 70 laboratories with the latest equipment provide GE and customers world class instruction in all areas of equipment maintenance and operation. The Training in Partnership curriculum provides a full range of training programs. GE managers are considered one of the firm’s distinctive competencies and strengths. The challenge is maintaining employee motivation through better remuneration in a time of global economic meltdown and declining profits for the firm. GE Healthcare is capable of changing and constantly re-inventing itself to deal with changing business needs. Setting new standards for management, organizational design, Research and Development has been the pillar of the firm. This is evidenced by the establishment of the six distinctive business units stated above. Exploiting the resources that the firm has, this competency can be meant un-substitutable. The firm is continually innovating to develop solutions to customer changing needs. As Jeffrey Immelt stated, the firms’ employees â€Å"have an ability to live in the moment†. This quality is rare and not easily imitated. This organizational culture ensures that employees continue with innovation and development of new ideas. The firm has a global orientation, with production facilities outside the US and UK, a wider customer base, a superior brand, sales, marketing, IT and Production departments within every modality. This ensures efficiency of service within each business unit. To ensure financial accountability in outsourcing and procurement, decisions regarding this are handled by offices at the headquarters. GE Healthcare operates within the Rubric of the well known and established General Electric; this promotes sharing of management knowledge and experiences. General Electric is a well known Brand with a global touch. This strong internal structure has been at the core of the firm’s success. However Organizations function as systems, they interact and respond to the surrounding environment (Barnard 1938). This calls for an external analysis of this firm. External Analysis Competitor Analysis Analysts argue that competitors can ensure that similar firms remain productive. Though this can be healthy for consumers, small competitors and substitute product can drive giants out of the market. Siemens AG competes against GE group in communications, power, transportation, medical, and lighting industries. Siemens and HE Healthcare are most competitive in the healthcare industry. Siemens Medical Solutions happens to be largest supplier of healthcare equipment globally. Siemens AG is distinctive in its innovativeness and provision of complete solutions to its customers. Siemens is actually larger, with close to 440,000 employees, 70,000 of which are located in the U.S. Despite the fact that GE Healthcare outdoes Siemens AG in healthcare ($9.4 billion) and energy ($15.3 billion) it is a competitor that cannot be ignored. Both operate at virtually global scale. Other competitors include FUJIFILM Medical Systems USA, Inc. Hitachi Medical Corporation Nihon Kohden Corporation Schiller AG TOSHIBA Medical Systems Corporation Philips Healthcare Philips Respironics, Inc. Industry Analysis General Electric’s firms including the Healthcare unit have been analyzed using porters five forces model to determine which industry is more attractive. GE Healthcare industry is challenged by competitors and new market entrants. Consumers constantly demand low prices at a high quality leading to intensive bargaining. Retailers have to bargain with suppliers to fix the prices of their products. The GE retail industry also faces the threat of substitute products. For more on the competency strategy, SWOT analysis an the forces model see Appendix 1 and 2. Recommendations GE Healthcare already has a global orientation, large customer base. The success of GE Healthcare lies at how best it chooses its business focus. There is need to focus on a specific market niche. Too much diversification and provision of a wide variety of products may be a step forward but it can also become a mechanism for reversal. Much diversification can lead to lose of business focus. It is evident that new technology and the creation of a global virtual market offer an opportunity for the firm to grow its business. African and some Asian markets are still virgins to the firm. There is need to identify and exploit this business markets. Where favorable, establish production facilities. Advertising and strategic marketing remains a superior option to strengthen the firm’s brand identity. With increasing human rights concerns and demands for accountability, there is need for education and corporate social responsibility, as consumers are becoming more sensitive to scientific information. Nevertheless challenges of environmental accountability abound and cannot be ignored. Works Cited Barnard, C.I. The Functions of the Executive, Cambridge, MA: Harvard University Press, 1938. Print. Barnard, C.I. Organization and Management: Selected Papers, Cambridge, MA: Harvard University Press. 1948. Print. Brady, Diane. GE: When Execs Outperform the Stock. Business Week 17 Apr. 2006. Goel Sanjay et al .General Electric: Strategic Management.