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INTRODUCTION:
General electric is one of the world's largest and most diversified companies. With eleven different segments of the company, ranging from Advanced Materials to NBC Universal, General electric has a strong hold on many separate markets. As a whole, General Electrics' main competitor on a conglomerate level consists of Siemens.
Siemens AG (SI) is a leading diversified company offering products and services in information and communications, automation and control, power, transportation, medical, water and wastewater treatment, lighting, financing, real estate, and home appliances. Siemens' is one of the largest markets in the world, with thirteen worldwide businesses and annual sales of $97 billion. Siemens companies in the U.S. employ approximately 70,000 people and 430,000 people globally. Siemens most closely mirrors General Electrics size and structure, making it their largest competitor.
Breaking GE down into individual segments reveals a more accurate depiction of the companys competition. Each separate venture of GE has its own degree of competition. While all eleven segments of the company are important, the largest and most profitable areas of business are GEs finance, media, and technology businesses.
GEs Consumer Finance and Commercial Finance are GEs most lucrative businesses producing 39 billion dollars in revenue for 2004. These financial institutes offer a wide array of services and products such as commercial loans, home loans, bank cards, auto loans, leasing and financing inventory, debt consolidation loans, and home equity loans. Citigroup, a GE competitor, provides financial services for more than 200 million people in over 100 countries with revenues of over 66 billion. Citigroup competes with General Electrics financial service business segment with their four business groups in the financial services. These segments consist of Global Consumer Group, Global Corporate & Investment Banking Group, Global Investment Management, and Global Wealth Management. The competition in this area is high between GE and Citigroup.
GE NBC Universal is one of the worlds leading media and entertainment companies owning a television network, world-renowned theme parks, Motion Picture Company and other various media outlets. While GE NBC produces lower revenue than its competitors, such as Disney and Time Warner Inc., GE maintains a relatively competitive profit.
General electrics main advantage is the fact that they are so diversified. The competition is steep in each of their individual companies, but there are few companies that can compete with General Electric as a whole.
Substitute has lower performance: A lower performance product means a customer is less likely to switch from General Electric to another product or service. Substitute is lower quality: A lower quality product means a customer is less likely to switch from General Electric to another product or service. Substitute product is inferior: An inferior product means a customer is less likely to switch from General Electric to another product or service. High cost of switching to substitutes: Limited number of substitutes means that customers cannot easily switch to other products or services of similar price and still receive the same benefits. High switching costs positively affect General Electric.
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