• External Environment Analysis- GE Appliances• Submitted By: Arshdeep Singh Puar (300647849)• Navdeep Mahl (300631852)• Date: November 2, 2011

• GE Appliances is Canada's largest manufacturer and distributor of GE, Hotpoint, Moffat and McClary appliances.

• The kitchen is the hub of homes. GE appliances are not only great products, but are dependable and timeless.

• GE appliances are produced from one largest manufacturers of major appliances in the world.

• GE appliance has a strong set of global businesses in infrastructure.

Strengths

• The company is one most diversified Product Portfolio

• Strong Brand• It is a leading electronic company in the world• It has diversified operations across the different

geographies and product range• It has a partnership with leading companies around

the world• It carries wide range of products• It has Strong R&D

Weakness

• Recalls dishwashers due to fire hazard• Weak credit rating• Increasing instances of product recalls

Opportunities

• Fast growing markets in China, Brazil, China and India

• Introducing new products at different prices • Capitalizing an adjacencies and emerging markets• Investing in product platforms and creating new jobs• Sponsorship agreements to improve brand recall

Threats

• Rising commodity prices and increasing inflation rate in most part of the world.

• High competition• Exposure to global economy• Many consumers view noise level as an indication of

a dishwasher’s quality• Competition from market entry of many competitors

and copy cat brands that pose potential threats.

PEST analysis of GE Appliance

Political (Legal) Aspects• GE appliance is multinational company and has to

deal with political system of different nations. • Different countries provides different working

conditions some are positive whereas some are negative

• Tax system is also different in different countries.• As an example in china and Singapore the taxation

system is different whereas in Canada and USA other tax conditions apply.

Economic Aspects

• Changes in rate of interest, exchange rates in different countries and value of money greatly affects activities and operations of GE.

• Government spending, Inflation and deflation in different countries is also a big factor to influence the business productivity and profitability of GE

• The Energy Efficient and Smart Appliance agreement of 2010 took place to set the minimum energy efficiency standards for home appliances.

• Extend and update tax credit for the development and manufacturing of smart appliances.

Social Aspects

• The culture in a particular country determines the different employment policies, working hours, holidays and the type of goods to be produced.

• So GE has to deal with such issues effectively. • In a different country the inflation may provoke

higher wage demand from employees and can raise the costs.

Technological Aspects

• Innovative products are always being introduced using more advanced technology each day.

• The product of this company has great technology and certainly contributed to the success of the company.

• Technology is advancing at a very high pace globally so therefore GE appliances has to be on the lookout to ensure that their technology is up-to-date when introduced in the market.

Competitive Strategy

• Competitive strategy of GE appliances is the company’s core technology, manufacturing and marketing.

• The new dishwashers are more energy efficient compared to GE dishwashers made between 1999 and 2001

• They are saving 32 percent energy and 43 percent water.

• With operating sound levels as low 48dBA, so family time doesn't need to be disturbed

• The target market for GE appliance dishwashers are restaurants, market brand serving families, active balancer and super mom.

Porter’s Five Forces Models

The bargaining power of buyers

• The most important buyers for the dishwashers are

families, restaurants and some business places. • The profitability of each of these segments

obviously demonstrates the bargaining power of the buyers.

The bargaining power of suppliers

• Due to continuing inflationary pressure in raw material, specifically rare earth elements, the appliance business of GE-Appliances (dishwasher) is confirming its previous general price increase which was announced on June 1, 2011.

• Through a partnership with General Electric and Home Depot, the facility will be able to accept old refrigerators, often those from customers upgrading to new appliances, and convert them to raw materials.

Degree of differentiation

• Marketing and differentiation of a product has become a great significant.

• LG and whirlpool both mainly compete on the advertisement, promotion and differentiation rather than on pricing.

• But GE appliance is recognized as the best-known brand name globally and has great prices with great offers.

The intensity of competitive rivalry

• The industry is almost dominating by Whirlpool and LG.

• This industry has a great completion with these two companies.

• These both companies has a majority of the market shares and rest of the companies has low market shares as compared to them.

• The companies are focusing on advertising and differentiation rather than on pricing,

Threat of forward integration

• There is a very low threat of integration in this industry.

The manufactures of GE appliances has huge manufacturing plants, distribution networks and suppliers don’t have an ability to afford such kind of well establish network.

  Positive or negative implications Political factors :• Canada is very strict about the law especially when

talking about provincial Law. • The health department enforces the inspection of the

material used by dishwashers to prevent the health hazards.

• Furthermore with the provincial tax was replaced with the harmonized tax, which caused in increasing price of the dishwashers.

Economic Factors

• Change in social trends such as labour costs, unemployment and labour supply can be a huge factor in the sales volume.

• Higher national income growth can also boost the demand of the product.

• As an example an economy which will be undergoing recession will have high unemployment, low spending power and will tend to spend low on the product.

• GE appliances product in the developing country will affect the competitiveness from the developed countries which can affect the sales volume.

Social Factor

• Change in the structure of a population in the different country will also affect supply and demand of the product.

• GE appliances have to maintain their stylish products with their great quality.

• The sales volume will be affected if GE appliances will offer its product by aiming to complement and benefit people’s lifestyle and behaviour.

• They will loose the market if they will not respond to change to the market.

Technology Factor

• GE appliances are always introducing the new product which always helps in increasing sales and competition among other competitors.

• A faster exchange of information in the company can benefit the business.

• Access to the internet can help shop online for 24 hours from their home and work.

Competitive strategy

• GE appliance focus on the styles and competitive advantage. • The target market for GE appliance dishwashers are

restaurants, market brand serving families, active balancer and super mom.

• They are really good in prices and great in quality because of which customers spend the money for this product.

• GE appliances are located all around the world which gives an opportunity to GE appliances to sell their product more

• GE appliance focuses on the benefits of efficiency without sacrificing features, performances, styles or convenience.

• We think that GE appliance should think about sustainable competitive advantage which is not easily attainable by competitors.

Market Segment for this product category

• The PDW7900N built-in dishwasher performs an adequate job of cleaning and manually rinses dishware before placed it into the dishwasher.

• It has a large capacity. The only problem in this dishwasher is the lack of stainless steel insert.

• The top rack is adjustable but not removable. • The average price of this dishwasher is about $820

which is affordable.

Recommendation

• We believe that they have to spend a little bit more on the marketing and advertisement to increase the sales.

• GE can increase the sale by providing the guaranteed customer satisfaction.

• Doing follow up on the exciting customers and testing the new products on them will also enhance in the sales volume.

• Promoting strategies like free cleaning and maintenance of purchased dishwasher.

• Customer is most likely attracted to special offers while purchasing a new product. So GE can offer some package with the product

References

• News calculating the future. (n.d.). Retrieved from http://pressroom.geconsumerproducts.com/pr/ge/calculating-the-future-ge-unveils-213599.aspx

• (n.d.). Retrieved from http://www.bizjournals.com/louisville/stories/2009/03/16/story1.html?page=6

• (n.d.). Retrieved from http://www.geappliances.ca/

• Porter’s five forces model of competition. (n.d.). Retrieved from http://www.managementstudyguide.com/porters-model-of-competetion.htm