A REPORT ON THE INTERNATIONAL MARKETING STRATEGIES USED BY GE COMPANY

TABLE OF CONTENTS

ABSTRACT……………………………………………………………………..……ii

EXECUTIVE SUMMARY…………………………………………………………..iv

INTRODUCTION……………………………………………………… ………….1

REPORT PROCEDURE…………………………………………………………..…1

THE 4 P’S……………………………………………………………………………2

PRODUCT……………………………………………… …….……2

PRICE………………………………………………………………..2

PLACE…………………………………………………………….…2

PROMOTION…………………………………………………….….2

SWOT ANALYSIS………………………………………………………………….3

STRENGTHS………………………………………………………..3

WEAKNESSES……………………………………………………..3

OPPORTUNITIES…………………………………………………..4

THREATS……………………………………………………………5

INTERNATIONAL MARKETING STRATEGIES BEING USED…………… …5

WAYS THAT CAN IMPROVE INTERNATIONAL STRATEGY………………..9

IMPORTANCE OF INTERNATIONAL MARKETING………………………….10

WAYS OF IMPROVING THE STRATEGIES……………………………………10

RECOMMENDATIONS……………………………………………………………11

CONCLUSION……………………………………………………………………..11

BIBILIOGRAPHY…………………………………………………………………13

EXECUTIVE SUMMARY

This report examines the international marketing strategies used by General Electric Company in its quest to tap the international market. The purpose of the report is to provide the company with the information necessary to amend and improve on their marketing strategy. Over the years GER has highly diversified its operations and is now operating 11 major lines of businesses which include transportation, consumer finance, commercial finance, insurance and energy. It is also involved in healthcare, consumer and industrial products, advanced materials and NBC-Universal. The objective of this report is to;

  • Assess the 4 P’s of the company
  • Perform a SWOT analysis for the company
  • To assess international marketing strategies used by the company
  • To evaluate the importance of international marketing for GE Company
  • To evaluate the weakness of the strategies adopted
  • To recommend necessary action to be taken

The information necessary for this report was obtained by scrutinizing company information from their website which is amply updated. Based on the conclusion made in the report, recommendations for an effective international marketing strategy are to fully utilize the internal and external market environment through employee appreciation, relationship marketing and utilization of local professionals in foreign regions.

This report is an examination of the international marketing strategies used by General Electric Company, London to access international foreign markets handled by Boston Consulting group officers during the year 2009. The purpose of this report is to provide the company with the information necessary for them to improve their presence in the international market. The strategies used by the company previously were analyzed and a SWOT analysis was done on the company. The report examines the importance of international marketing to GE and several recommendations to tap into more foreign market. The recommendations proposed in this report are 1) to fully utilize the internal market environment 2) to adopt strategic measures to enhance the external market 3) To utilize local professionals in the different regions.

During the preparation of the report, different team members adopted different responsibilities as follows;

Derrick Aston – To identify the 4 P’s for GE Company

James Stephen – To identify international strategies employed by GE in the past

Symon Ahmed – To explore possibilities of improving international marketing strategies for the company

Introduction

This is the report on the international marketing strategies adopted by General Electric Company, London. The company is one of the largest and extensively diversified corporations in the world. It’s organized along 11 business lines which include transportation, consumer finance, commercial finance, insurance and energy. It is also involved in healthcare, consumer and industrial products, advanced materials and NBC-Universal. Its symbol in the London’s stock exchange is GE and it employs over 315,000 employees in over 160 countries, with headquarters in Fairfield, Connecticut. The company has for a long time aimed at promoting both the internal and external marketing environments. Its primary marketing strategy has been a concentration on promoting customer consciousness on all employees in all its branches. This has been based on the growing awareness in today’s market that a strategy can only be marketed successfully in the market place once it’s marketed internally.

Report Procedure

Effective September 30, 2009, the Director of International marketing at Boston Consulting group requested consultants in the company to evaluate the international marketing strategy for General Electric Company, a highly diversified company with operations in over 160 countries. The report was to evaluate the 4p’s of the company and perform a SWOT analysis of the company. The report was also to evaluate the existing international marketing strategies adopted by the company as well as assess the importance of international marketing to the company. It was also intended to evaluate the weakness of the adopted strategies as well as making recommendations for more effective strategies. The report duration was given as two weeks.

The 4 P’s for the company

  • Product

The company has maintained a culture of producing high quality products aimed at providing the best value to the customer. It also engages in continual improvement of the existing products through thorough and high-tech research (Gary and Veronica, 2008, p 13).

  • Price

In recognition of existing competition in the global market, the company is involved in regular evaluation of its price to ensure that customers attain optimum value for their products using least resources. The company is hence involved in provision of discounts and promotional items from time to time.

  • Place

The company has adopted an ambitious global plan over the years to distribute its products to its consumers in a considerably convenient manner. In pursuit of this goal, the company has opened branches in over 160 countries which exclusively merchandise GE’s products (Kotabe and Helsen, 2006, p 36).

  • Promotion

The company has a vigorous promotion culture aimed at maximizing communication to the consumers. The company has a state of the art website which is updated continuously to reflect the products, their benefits and how they can be accessed. Communication is amply up to date with a professional and articulate customer services online (Dennis 1964, p 26). The company also pays great attention to all it’s stakeholders including employees and customers who are treated as critical in the company’s internal business environment.

SWOT Analysis for GE

  1. Strengths
    • Global recognition and strength-The company is positioned 5th in Fortune 500 list, with a massive operation base in over 160 countries. The products of the company are well distributed in all major markets making the company a household name for its products.
    • Diverse product range-The Company has invested heavily in 11 major business fields giving it a wide range of products. These products are categorized into both long and short term products (Kotler and Gary, 2008, p 11). Among the long term products are long term aircraft engines while short term products include lighting products, plastics and NBC.
    • A decentralized organizational structure where management is done at the regional levels thereby reducing the burden of cross border transactions and communication (Kotabe and Helsen, 2006, p 36).
    • The company has well established marketing relationships with both customers and employees.
  2. Weaknesses
    • Poor performance in the energy sector- The company sector, which forms a wide financial base for the company, has been underperforming with no signs for improvement in the near future. This has been attributed to the ongoing financial crisis that has massively affected major businesses and economies.
    • Inability to acquire expansion sites for the company- Due to its size, the company faces monumental challenges acquiring new sites for expansion due to existing domestic and foreign policy framework. For instance, the company’s planned purchase of Honeywell International was denied by the European Union. The targeted company is a manufacturing and technology company, with great specialization in the aerospace industry.
    • Poor flexibility-Due to the sheer size of the company, it is increasingly hard to effect essential changes to the business. This means that the company can lose ready market due to its inability to make quick decisions necessary to capture the change.
    • Time to time charges of corruption cases
    • poor history of large scale water and air pollution
  3. Opportunities
    • Increased Geographic growth- The Company has potential to tap into geographically strategic paces such as China and select countries in Africa such as Egypt and South Africa. Improved presence in the global market implies a significant potential for more business opportunities (Gary and Veronica, 2008, p 13).
    • Research and Development- The company massive investment in training and adoption of relevant technology positions it in a strategic position for competing with other major world players.
    • Improved Customer service provision
    • The company has adopted a customer focused strategy where customers are given access to all information needed within the short time possible. Enhancing professional raining for customer service training on its staff is also an immense potential for the company (Kotler and Gary, 2008, p. 51).
    • Mergers- The recent merger between Vivendi and NBC presents more opportunities for the company in the media business.
    • Diversification and innovation of new products such as provision of financial services.
  4. Threats
    • The Global Financial Crisis- Economy slowdown in major economies such as the US and UK is a potential disaster for the company since 40% of its gross revenue is generated overseas.
    • Cut-throat Competition- The constant change in technology raises up great competition as competitors adopts diverse strategies to remain in business. The continuous existence of the business requires smart strategies, which are not always timely. Major competitors to the company includes Philips Electronics, Citi group and AG
    • Intense scrutiny- Huge business attracts a lot of scrutiny from governments, private entities and individuals. Any perceived non performance leads to investor apathy especially in the stock market.
    • The unpredictability of environmental patterns in some potential foreign markets (Kotabe and Helsen, 2006, p 36).

International marketing strategies adopted by the company

The company basically employs two strategies in its international marketing efforts. The first one involves investing and tapping the internal market within the reach of the company (Gary and Veronica, 2008, p 18). This is done in order to utilize the business principle which implies that a business must be employee oriented if it desires to be customer oriented. The internal marketing strategy is a business philosophy that utilizes employee’s potential in helping tap external market for the business (Adcock et al, 2009, p 15). Among major competitors, it has become a widely accepted fact that a strategy cannot work in the market efficiently if it is not well marketed internally (Kotler and Gary, 2008, p. 91). For GE to achieve its objective of reaching the wider world, the internal environment is treated as a prerequisite. The goal in this strategy is to convert employees to adapt and cultivate a culture of relationship marketing (Medha 2009, p 10). For GE to effectively penetrate the international marketing, the requirements of the internal market are first met and are then converted to the external market. In business it is recognized that inability of an organization to meet the needs of the employees leads to employee’s defection which breaks up the relationship that they had built with the customers. In promoting the internal market strategy, GE recognizes its employees as customers of the organization. The idea is that if products supplied by the company are valued by the employees, it is likely that the employees will bring in more customers. To promote this strategy, GE invests in their employees by providing good working environment and providing necessary tools required to perform various tasks in the organization. By being highly valued and appropriately compensated, the employees at GE are usually the first customers to purchase and promote any product rolled in the market. Another important consideration in this strategy is the involvement of employees in developing a quality approach the work they do in the company. Every employee has the responsibility of promoting production of quality products within the business.

The next strategy adopted by GE regards the external environment of the organization (Kotler 2008, p. 28). In the external market, several aspects are considered to be crucial by GE. This market involves the review of the general economy and the likely market for the company’s products. In seeking the external market, the company considers several factors such as fiscal, economic, technological developments, legal requirements and the business environment (Medha 2009, p. 61). Attention is also paid to existing and potential competitors in the business within the external environment (Dennis 1964, p. 42).

The micro and macro environment for the company’s business are also put into consideration. The microenvironment is the combination consisting of customers, suppliers and other stakeholders in the company (Paliwoda and Ryans, 2008 p. 61). GE is a huge company that treats suppliers as insiders and crucial partners in the running of the business. The customers of GE are not seen just as potential people willing to spend their money in the business but the company has put efforts of integrating the company’s view and the view of the customers. Customer service is very core in GE and all multinationals dealing under GE is supposed to adopt this view. Three components are cited as crucial with regard to quality afforded to customers. These include the employees, the process and the customers themselves (Kotabe and Helsen, 2006, p 36).

GE recognizes the needs of customers and invests in meeting their needs. Customers needs identified in GE includes competitive prices, service and correct transaction processing, on time delivery and performance. By analyzing the needs of the customers GE is able to invent new modalities which produces the required satisfaction among the customers.

Another strategy implemented by GE is relationship marketing among its major consumers. This strategy basically aims at retaining existing customers (John 2007, p. 51). This strategy concentrates on building long term relationship with the customers which is regarded as very vital in the running of business. This strategy is based on the business recognition that customers build relationship with people rather than products (Chekitan 2005, p. 35). To build this relationship, frequent contact with the customers is enhanced and the customers are encouraged to keep on making enquiries within the business. In its efforts to build strong relationship with the customers, GE has established a modern state of the art answer centre, which is regarded as one of the best in the world where customer’s gets free personalized attention around the clock. The center has been able to create opportunity for GE to be in contact with customers for longer time and hence creating the opportunity for tapping even customers who may get dissatisfied in the course of doing business. This contact helps the customers of GE to understand the company’s commitment to them and the value they attach to their customers. This has the effect of improving and cementing the very crucial relationship that GE attempts to build. The knowledge obtained from customer’s interactions provides relevant information with regarding to sales and marketing and possibilities of new products development (Adcock et al., 2001, p. 91).

As part of its internal environment, GE makes efforts to ensure that its suppliers adopt practices that comply with its environmental and safety standards. The company has a program for helping their suppliers in new markets to enhance their environment, health and safety standards. This is achieved through conscious efforts to increase awareness of important issues among its suppliers. By doing this, GE is able to protect its international image and integrity as well as safeguarding the quality of products (Kotler and Gary, 2008, p. 90).

Another crucial strategy adopted by GE is diversification. Recently, the company diversified to offering financial services. This diversification is adopted in the company’s efforts to ensure that it can offer all services that its customers deem necessary. This attempt was initially started as a credit financing stream where customers would obtain financing for the products they wanted if they didn’t have enough money.

Importance of International marketing to the Company

International marketing is very important for this company in its quest for generating substantial profits. For today’s businesses, survival depends on their presence on the global world market (Kotler 2008, p. 29). For such a company to effectively participate in global competition, a lot of efforts are needed in improving the effectiveness of the company’s top management in making crucial decisions at the right time. International market for GE means new markets in places and regions that are new and that are not supplied with the products the company offers. Expansion of the company in the international market is important in connecting the company with new sources of raw materials that are needed in their production lines (Selden 1997, p. 42). Since GE is a highly diversified company, there is also a great need for creating a highly diversified market that can absorb the diverse products offered by the company. Marketing is primary to all activities carried out by GE. In the international market, marketing is important to GE since it helps extend the domain for competitive enterprise (Dennis 1964, p. 24).

This implies that this level of marketing helps to break economic and nationalistic barriers and helps build economic unity among different regions economies (Schultz 2006, p. 90). Marketing that is regarded as crucial by GE is that which concerns developing countries such as Africa and Asian giants such as China and Japan. In the upcoming international markets, marketing helps in the innovation of new products that are in line with the upcoming market trends. It also helps in expanding existing market, accumulate more capital, helps in balancing international payments, exchange primary products, increase profits and extend production facilities (Chekitan 2005, p. 35). To achieve working solutions for the international market, the company borrows from other highly diversified companies which have faired well in the international foray. It can however be argued that GE has not completely utilized its potential in tapping the larger world market. Part of the probable reasons why this company has not completely utilized the global market is associated with the high cost required for such ventures and the complexity of diversity due to its highly diversified aspects. There are however several ways through which this company can improve its access to the world market and remain effective despite its diversification.

Ways in which the company can improve its international marketing strategy

The international market is considerably different as compared to local and regional markets. This is because it entails the possibility of meeting different markets dominated by different cultures. To achieve success in effective international penetration, several ways can be adopted and utilized. The first strategy would be comprehensive market survey that would effectively establish the needs that potential customers of that market are (Kotler, 2008, p 28). The survey should be carried out by professionals who should include as part of their team local professionals well oriented with local market. The survey would help the company establish the kind of products that it can offer to such markets. The other consideration would be to use other companies existing in the local markets as frontiers of the company in such markets either as dealers or franchises (Adcock, et al, 2009, p 1). The other strategy would be recruitment and training of employees sourced from the local markets. Such employees would give the company the advantage of being conversant with local languages and the general trends of business within their local environments. Use of print and electronic media would also be very crucial in establishing international markets and this would call for establishment of liaison between major media sources and the company (Nelson 2009, p. 17). Advertisement in the media should be professional and should portray the integrity and presence of the company.

Conclusion

The International market is very important in today’s business. The growth of technology has established the world as a global village and has given businesses a perfect opportunity for reaching to the previously unreachable markets. GE has a well established capital base that ensures that it can reach to more regions than it has done. The strategy that needs to be adopted by this company in these efforts must be based on exploiting the immediate internal market which would effectively open room for wider penetration in the external market. The international market presents great potential for the company since it would assist in expanding production facilities for the company which would effectively help in maximizing the company profitability. One of the challenges facing this company is the adoption of flexible strategies that can be adopted fast and effectively. The company should hence work towards developing working solutions that would help develop strategies that would address this weakness.

Recommendations

GE is a global company. The achievements made by the company over the last couple of decades show the firms commitment to achieving global presence in all corners of the world. Since the company has a wide capital base, it has potentials to reach a wider market than it has currently achieved It is recommended here that;

  • The company should invest in high level business surveys in upcoming markets to expand its market base (Theodore 1983, p. 95).
  • The company should engage local professionals in their targeted regions who would help actualize the real customer needs in such markets.
  • The company should adopt up to date technology to help fast track its services and product logistics in its wide markets. This calls for adequate training for employees on ways and modalities with which new technology should be used. Such technology could be in the area of communication, international money transfer, shipping and logistics and effective diplomacy necessary to maintain budding foreign relations (Adcock et al., 2009, p. 76).

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