Ge: Five Force Analysis of Case Study Essay.
The threat of new entry of the firm is somewhat small because the firm is the large company with long and specialized experience. It is difficulty for new entry to complete with existing products and services which need a large amount of investment and cost in order to run the business and develop the products and services. It is very difficult for the new entry because GE has a very strong brand and reputation as well as patents and know-how that has the new entry cannot be done in the short period in order to compete with GE and other major competitors in this industry.
The power of buyers The bargaining power of the buyers is high. This is because, the extremely high of switching cost from competitors such as technology industry where the buyers can find the information easily which will has an impact on them in order to make a decision to purchasing the products. It would benefit of the firm if they can sell a large volume of products.
However, there are not all of businesses in GE that have positive impact from switching cost of buying.
The power of supplier The firm tends to create long-term relationship with suppliers and most of them are work together in strategic alliance by sharing the knowledge and technology. With this relationship, it is win-win situation that GE and their suppliers will get. Therefore, the bargaining power of supplier is not high since they have become interconnected in term of knowledge and technology. Hence, the suppliers have to take this opportunity to build the relationship with the firm in order to compete with their business.
The threats of substitutes The firm has to concern about the threat of new product being produced which will barrier the business performance. There are many products can take the place of the firm products and services.
Competitive rivalry The competition is quite high, because the diversification of the business is high and the number of rivalry in the industry is increasing due to the lucrative profit which will cause more risk to GE. The main competitors of the firm are Siemens AG and Emerson Electric. Because they are also leading diversified firm as well as General Electric.