(Solution) GE’s approach to innovation in the past

Question

To what extent Jeff Imelt’s strategy aligned with

1. The requirements of the 21st century business environment?825 words

2. GE’s resources & capabilities? 825 words

   With correct mode use

2. What organisational changes has the new strategy necessitated? Will GE be able to successfully execute the new strategy?  600 words

With the correct models used

3. What has been GE’s approach to innovation in the past, how is it changing and do you think it will continue to be successful?  750 word

With correct models used for this

Discussion/Conclusion

Solution

Question 3

Innovation in the Past

In the past, GE has invested up to 6% of its revenues in research and new product development. The exceptional products that they have produced in the past in different industries where they have ventured are significantly attributed to their substantial investment in research and innovation and strategic acquisitions. Another approach to innovation has been an environment-friendly technology. This is regarding reduction in energy consumption and reduced emissions harnessing, improving the overall GE’s product demands. Further, GE has had options in pursuing acquisitions in the segments where they lacked sufficient competencies, including water and biotechnology. Lastly, an adaptation to technologies in their local markets is equally noted as an approach GE has used in the past to enhance innovation. This has similarly led to an improved relevance of GE’s products in their particular markets.

GE’s past strategy on innovation has been through diversification. The organisation has significantly diversified with leading products and services in multiple industries and sectors. In specific, the organisation has innovations in the sectors of the media, finance, energy, avionics, appliances, and automotive. All these units have been operating in complementary since innovations advanced in one division are applicable in the development of products in the other division. Also, the innovations the organisation develops in the other markets are often applied in different markets. Through this innovation, GE has been in a position of extracting immense value from its clients through offering products across diverse divisions targeting the same customers. There also has a possibility of GE minimizing their risks linked with a single sector operation. For instance, if the organisation was not innovative in events such as the 9/11 bomb attack in New York, which significantly impacted the aviation industry. Nevertheless, GE maintained on its innovativeness regardless of the events negatively affecting the industry

The extent of Change and how it will continue to be Successful

To describe the extent of change in the future, Ansoff’s Matrix can be adopted as the ideal model for evaluating how it will continue to be successful.

Product Development

The current GE’s highly diversified portfolio comprised of product lines targeting markets in a continuous evolvement can be considered. Also, the organisation operates in a substantially competitive environment, with majority of the players investing holistically in the development of the next revolutionary products and technologies. Currently, the R&D portfolio for GE is robust and inclusive of more than 37,000 technologists and taking 6% of the overall revenue. In 2012, for instance, despite launching more than 880 products, their financial service division portfolio was accounting for half of GE’s revenues. This is an indicator that their innovation products are insufficient in terms of their alignment to future market trends.

Hence, the approach by GE on innovation will not continue to be successful as Hussain et al. (2013) noted that new product development (NPD) must be based on structured approaches intended to manage all processes and activities to create new products for existing or new markets. Past studies have equally noted on the extent to which NPD ought to be in alignment with its business strategy and market needs (Aarnio & Hamalainen, 2008; Li & Gima, 2001). Hence, for GE to be successful in their innovation in the future, they need to focus on solving the customer challenges (Aarnio & Hamalainen, 2008), which would demand a holistic awareness of prevailing customer needs (Li & Gima, 2001). Also, as GE moves into the future, they should not continue basing their products and technologies from the R&D facilities in the US and the issues of technology transfer to their emerging markets. It is recommended in this report that GE’s R&D is based and works with individuals from its growth markets and developing products in these markets.

Market Development

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