Topic > Case Analysis: General Electric - 1524

GE uses a two-part strategy for sales in the energy segment using both a differentiation and cost leadership style. Selling current power generators requires the use of a cost strategy that has had both negative and positive results. The negative impact created a small profit margin due to rival Siemens (Bromels, 2016). The positive impact is due to the company's innovation which should reduce the threat of a substitute. Power plant generators are larger purchased items with some models selling for up to 125 million each; this reduces the threat of entry into the industry due to the costs associated with producing these units, allowing GE to use its economies of scale as a cost driver (Eaton, 2014). Now GE uses a differentiation strategy with its electric division as a whole. A positive take offered by the corporate strategy is that the threat of entry into industries is reduced due to GE's reputation for innovation; the expansion into digital technology also expands the quality and services offered to its consumers. GE survived its completion by leading with leadership that allowed the company to retain its employees allowing for decreased turnover, maintaining knowledge and positive productivity within the organization (Stephans, 2016). GE is also attracting new young talent to expand its digital technology. Having a wide range of differentiation in the energy industry allows GE to increase its service and even expand into servicing its rivals' equipment. A negative aspect that can be found in this strategy concerns the rivalry between its main existing competitor, Siemens. GE has managed to obtain revenue from Siemens with its service contracts, however some services are in the power of buyers. If buyers don't want to expand their services in the digital transition, GE could see their erosion