GE Healthcare: Innovating for Emerging Markets - Case Study Example

Running Head: GE HEALTHCARE GE Healthcare: Innovating for emerging Markets Determine two(2) emerging trends in the external environment that prompted general electric (GE) healthcare to develop a new strategy for the production and marketing of a low cost electroencephalography (EEG) machine in bottom of the pyramid markets (BOP): Healthcare industry is a continuously growing industry of the world. Almost in all the countries there is demand for different healthcare products and companies are now starting to concentrate on this sector and want to make an impact. The healthcare market is divided into various parts where the developed countries are on the top of the layer followed by the developing and less developed countries. Here the factor based on which the division has been made are not only the economic ones but also the knowledge of the people about the importance of healthcare in daily life. GE is one of the leading organizations in the world in the healthcare market and they consider India as a great prospect in terms of healthcare product and services. As the consumer good companies already started to gain huge profit from the bottom of the pyramid, and now, it is an opportunity for the medical technology and device manufacturers to grab that opportunity by reaching out to the segment with the low-cost products that can help them to capture the high percentage of untapped rural, semi urban market in India. Since the rural markets and under-penetrated semi urban markets continue to hold a promise, GE wants to the pioneer in capturing this market. This trend has been driven by the fact that getting help from the healthcare services and avail the opportunity of getting treated by the high technology product is a challenge in the rural and semi urban part of the country, particularly for the low socio-economic class and rural customers (Mukherjee, 2011). At present in the world most of the people dies due to cardiovascular disease. More than 80% of the patient sufferings from heart disease in the world are from the low income countries and in India only; over 2 million people are suffering from heart disease. Report suggested that by the 2015 India will be having over half of the world heart patient. The expensive EEG machine is only for the top end customers and countries, but as in India most of the heart patients are from semi urban or rural areas, low cost product to detect their disease can easily capture the market. So for GE it is a best opportunity and right time to look capitalizes on the bottom of the pyramid. As they are having the biggest R & D center in India and can also able to have the privilege of using most educated and skilled manpower so it is easy for them to get the opportunity of first mover (Cardiovascular Disease in India, 2011, pp.9-11) 2. Examine two(2) internal barriers GE healthcare faced when developing its BOP market in India and determine the manner in which they hindered GE healthcare growth in this market segment. For GE, there are few internal barriers which may prevent their initial movement in the BOP. First of all India is a developing country where the people who used to stay in the rural and semi urban areas don’t have enough money to spent in the treatment for heart disease. So availing the high technology in order to recognize disease or making treatment is hard for them. For that low cost product of GE is essential for those areas. Secondly, India is a challenging market where the profit margins can be low for different organization, along with present a huge amount of uncertainty—from care provider community to economy of the nation. If GE as an organization compare the market of India with China it is more smaller one with less number of people have the coverage of medical insurance and very nominal percentage of people have the power to spent money for high end treatment (Singh, 2013). In order to overcome this challenges GE launched low cost product to determine the heart disease in the rural and semi urban areas of India. The low cost technology will enable the health center in those areas to ensure proper treatment of more number of people. While developing this new machine GE also have to make it sure that the new technology is easy to use for the less experience doctors in the rural areas so that they can easily use those technology to determine the heart disease for the people in rural areas. As par the report published in the Times of India, GE Healthcare has bring together a host of products under its way of marketing strategy In India, for India , and at a segment of the different low cost ECG devices (Mukherjee, 2011). 3. Analyze two (2) of the significant external barriers that GE healthcare faced when trying to meet its marketing goals in the Indian market. Purpose two (2) ways to address these barriers. Apart from the internal barriers GE as an organization also have some external barriers in order to have an impact on the base of the pyramid (BOP), in the Indian rural and Semi urban Market. In Indian market the major external barrier for GE in expanding market is the low per capita income of the rural and semi urban community in Indian market. People from rural and semi urban areas cannot spend more in order to treatment of critical disease. Another external barrier is the competition with the other companies. In order to overcome these two barriers GE has developed a new ECG machine MAC 400ECG Device, a low cost one to get access of the mass population in the bottom of the pyramid. Apart from that, they have also launched a new campaign Healthymagination, a $6 billion campaign. The main objective of this campaign is to reduce the cost and also increase the access and quality of the healthcare in for the people who are at the bottom of the pyramid (GE Healthcare Press Release, 2010). 4. Analyze the specific steps GE took in developing its strategy to grow its BOP market. Determine the manner in which those actions apply to the principles of strategic thinking and strategic planning. The approach taken by the GE as an organization to capture the BOP market is an effective and most thoughtful one. GE as an organization have their presence in the entire top nation of this world and from those nation, they are able to generate business easily as in those countries people are more cautious about their health. But in the developing countries like India etc, there is a huge untapped market to capture. GE as a healthcare organization has targeted these nations, specially the people who do not have the money for expensive treatment. Setting up new R & D center in India, considering it a separate unit like USA and China, making separate business strategies to capture the rural and the semi urban market- all these different strategies have been taken by the organization in order to reach their target and capture the BOP market in the healthcare industry. Different campaigns like Healthymagination etc.are also launched by the organization. To capture the BOP market, GE changed their mode of functioning also;re organized the organization structure and redesigns their R & D system, set up new R & D center in India which is devoted to develop low cost machinery that can capture the BOP market not only in India but also in other less developed countries (International health protection Summit, 2011). 5. Determine the manner in which GE healthcares strategy to improve its position in BOP markets contributed to the organizations value chain in both emerging and developed markets. The strategy implemented by the GE to capture the BOP market has helped the organization to develop its position not only in the developing countries but also in the developed countries as well. The low cost machinery not only helped them to capture the BOP market but also helped them to develop the existing system and technology which are in place in other developed countries. The new R & D center in India help the organization to get an access to more bright employees who can help them in not only developing the low cost machines but also make fine adjustments, development in existing high cost ones. The launch of different campaigns in order to promote health care in different industries also helped them to increase their CSR or corporate social responsibility and make a better brand image all across the globe (International health protection Summit, 2011). From the above analysis it is very clear that GE as an organization in order to get advantage of fast mover in the bottom of the pyramid adopted new organization strategy that is to decentralize the operation in India. New organization structure in India, setting up new R & D center, developing low cost machines all different strategies are adopted by organization to ensure that they get the advantage of fast movers in the semi urban and rural areas of India and other low income countries. References Cardiovascular Disease in India: Challenges and Way Ahead, (2011), International health protection Summit, Ascham India GE healthcare Press Release, (2010), GE healthcare Recognized for its efforts to take healthcare to the masses in India, Retrieved on 29.1.2014 from http://www.healthymagination.com/ Mukherjee, R. (2011), Med device makers eye bottom of pyramid, The Times of India, Retrieved on 29.1.2014 fromhttp://articles.timesofindia.indiatimes.com/2011-12-03/india-business/30471522_1_ge-healthcare-medical-technology-rural-markets Singh, S. (2013), Medtech Giants Philips and GE Fight Over India, Forbes India, Retrieved from http://forbesindia.com/article/boardroom/medtech-giants-philips-and-ge-fight-over-india/36099/1 Read More