General Electric Company: Information and Communication Technologies - Essay Example

? Electronic Business Strategies and ICT use in General Electric Company Table of Contents Executive Summary 3 Introduction 3 Theory and Analysis 4 Synthesis/Conclusions and Recommendations 9 References 10 Executive Summary Today, businesses have incorporated ICT in their business so as improve on the efficiency and deliver enhanced customer value. This has been so because ICT provides a platform for businesses to gain competitive advantage as it ascertains that operations are handled in fast and efficient manner. This report looks into the General Electric Company, and how the company has developed an e-business strategy and utilized ICT so as to enhance customer relations and improve on its performance. Introduction General electric Inc. (GE) is a fleet management company with operations in United Kingdom and the US among other markets. GE has been using a platform computer based applications platform for fleet management over the years but over, better versions of the platform were developed were available in the market. E-Business strategies provide firms with growth opportunities (Hanna, 2010). GE adopted a growth e-business strategy in order to boost sales and avoid the risk of stagnating at the global market as Bhusry (2008) explains. To achieve success for its strategy GE decided, to adopt an ICT tool procured from Micro-strategies, an independent software vendor. The new tool is basically an upgrade on its existing fleet management software with additional functionality of supporting a Decision Support System(DSS). Theory and Analysis Evolution of the internet has enabled firms that embrace technology reap benefits related to better efficiency and effectiveness, increased sales, better customer relations, new market discoveries as well as higher profitability in the event that the strategy was value driven(Cheung, 2007). Through the internet, GE has been able to access the global, targeting a larger potential market for its product offering. GE uses its ICT tools to provide information to the drivers of its fleet as well as the fleet managers with broken down easy to read reports. The reports assist in enabling a faster decision making process and response time to operational inefficiency encountered at the work place. The DSS systems provided the reports via email or text message service, thus regardless of location, a mobile phone is all a driver or fleet manager needs to have. Businesses can only realize benefits of adopting e-business strategies if they are keen enough to research, develop, and successfully execute these strategies (Kamel, 2006). In addition to this, (Kotleret al.2006) explain that only firms that adopt strategies that are relevant to the demand of clients and value driven can successfully reap the benefits of e-business. In order for the strategies to be relevant, a firm has to identify its value drivers and match this with the best e- business strategies it has, where possible merging the two with the internet, especially so for firms operating globally like GE in this case. Value drivers vary according to the different models of businesses different enterprises adopt. The drivers are key to operation of an enterprise and have a direct impact on how the business operates (Beynon, 2004) Opportunities Existent to GE GE, as at the time of adopting this e-business strategy was handling management of over a million commercial vehicles for its corporate clientele. According to Hitchcock & Willard (2006) a strategy drives the daily operations of a firm. GE, before adoption of the strategy, was using an e-commerce platform for fleet management that was functional and efficient in managing the fleet and relaying data back to the fleet managers. According to Hitchcock & Willard (2006), an ICT platform forms the foundation for the operations of an organization. GE has chosen the DSS platform to help in achieving success of their growth. The DSS system was to allow for faster decision making process to create value for customers by enhancing the quality of service delivery. The REAN model involves reaching, engaging, activating and nurturing their potential clients. Reaching involves attracting potential clients to a firm’s product (Galvin, 2004). GE does this through constantly engaging in advertising and marketing activities. Through engaging with potential clients, GE tries to convince the customer to allow GE provide fleet management services to the individual/ firm. If engaging result to activation, assuming that the advertising and marketing campaign was good enough, a client is activate to purchase the product and as a firm, GE ties to nurture that client, to maintain customer loyalty. To measure growth of GE and to a large extent the success of GE’s e-business strategy of growth, the marketing strategies of GE’s were developed through the REAN and measured through the same model using the website statistics. According to Kehal & Singh (2005), opportunities such as enhanced efficiency, increase in sales volumes, better customer relation and therefore customer loyalty exist only if a business enterprise is able to successfully implement its e-business strategies successfully, For this case, GE being a globally operating firm in fleet management, some of the opportunities that were existent to the organization that enabled GE come up with the e-business strategies include the prospects for new markets, changes in technology, population patterns, purchasing power and the growth of the global market To evaluate the current position GE was in against the position it was aiming to be at upon successful execution of the strategy, Porters five forces tool is used to analyze supplier power, threat of new entrants into the market, buyer power, the threat of substitution as well as competitive rivalry (Porter, 2008). To understand the tool and its relation to execution of GE’s strategy, each of the five forces individually is checked against factors such as the number of competitors involved and quality of substitutes in the market. Relating to GE’s e-business strategy of growth, focus is aimed at GE’s client’s purchasing power and its supplier’s power to influence the success of the strategy. Purchasing power according to Rahman, (2008) relates to the quantity of goods or services one is willing and able to purchase. GE’s core market consists of mainly corporate clients who have enough resources to purchase the service of fleet management GE was offering. With a willing and able buyer, GE’s main concern with regard to achievement of the strategy was creation of value for its customers through quality service provision. Provision of the quality of service, according to Hitchcock & Willard (2006), involves constant process improvement ad embracing change within that organization. Suppliers have a direct impact on the operations of an enterprise. Without them, a business enterprise cannot operate (Jackson, 2008). GE’s suppliers form its core raw materials. These suppliers include those that supply it with software for running the firm; firms providing training services for drivers for the fleet as well as other suppliers meant that GE could not survive without their services. The number of these suppliers, the unique service they offered to GE as well as the cost to GE for changing from a particular supplier meant success or failure of GE’s strategy. According to Porter (20080 supplier form part of the core to a business and therefore GE had to include the suppliers to ensure success in growth. In the fleet management business GE faces completion from firms such as ABS national Auto in the US as well as VMS in the UK. In a business environment, competition always exists according to Porter (2008). Apart from these competitors, GE also faces the threat of entrants into the fleet management business. According to Porter (2008), rivalry among competitors involves the number of competitors involved in the market, costs of GE leaving a particular market due to many competitors as well as the difference of quality in service difference firms in the industry offer. GE’s strategy included expansion too. Expansion plans are faced by challenges among them cost of entry, economies of scale as well as barriers to entry in the new markets. This considerations formed part of GE’s strategy. Kehal & Singh (2005) argue that market share and sales revenues are directly related. For GE, being a global company meant that it could increase its market presence and market share by simply adopting e-business strategies that increased efficiency of operations. According to Rahman (2008), efficiency and effectiveness go hand in hand in giving an enterprise the much needed operational efficiency when expanding its operations. For GE, the new e-business strategy of growth gave it strong foundation for remaining competitive in the global fleet management business as well as expansion plans of going into new markets. Better customer value was another opportunity. GE needed to ensure that its clients were getting value for their money. In order to do this, GE had to look for ways of enhancing customer satisfaction. According to Schroeder (2008), customer value is achieved when an enterprise puts emphasis on customer satisfaction. The value a customer realizes from consumption of a commodity reflects on the satisfaction the individual gains as well as brand loyalty (Kehal & Singh, 2005). For GE, there was the need for enhancing customer value. If well implemented, the strategy would result in customer satisfaction. The underlying objective to achieving customer satisfaction was the realization of customer loyalty to GE’s products. Strengths and Weaknesses of GE’sCurrent Use of ICT Tools to Support the Organization’s Overall Business Offering For GE, it had the strength of already being in operation in the domestic and global markets, with experience in trends in sales, technology as well as the already existent infrastructure in the markets it was in. GE already has a unique selling point given that it was among the leading brands worldwide in the fleet management business. Being a leading brand meant that potential customers see the company as a viable fleet management service provider (Jackson, 2008). Weaknesses within the firm concerned what GE could improve on, for the example the technologies it uses, as well as the avoiding factors that make the company lose sales and appear weak in the eyes of its client and competitors. According to Jackson (2008), ICT tools in a business enterprise plays a core role in cost reduction and efficiency maximization. GE mangers thus decided to improve the existing ICT component of GE’s business by adopting the new DSS software. Business processes requires continued process improvement (Kehal & Singh 2005) and to ensure systems change with the constantly evolving business environment. For GE, there was need to build on its strengths, explore opportunities available as well as minimize threats and weaknesses. Carrying out the SWOT analysis was therefore essential if the strategy was to execute successfully. In much of the developed countries, ICT continues being a leading factor that influences growth (Green &Yoram, 2004). Through firms such as Micro strategies that have available and tailor made ICT solutions readymade, the current platform GE was relying upon was much needed in the operations of GE. Added to the fact that firms are available offering support services as well as maintenance to the ICT platforms meant that GE would be able to compete operate with other industry players in the fleet management business on a level playing field. Availability of support systems for business firms according to Kehal & Singh (2005) affects the efficiency of operation of an enterprise. The current ICT tools GE was using were upgradeable. This meant that with proper vision and planning by the GE management team, the tools could be upgraded to cater for increased functions for GE. Being a global means a will always be in the search of new niches to enter (Unhelkar, 2011). GE being global means that it had to have a stable ICT platform that would support its worldwide operations. The current ICT tools GE was using supported its global operations well and with the additional upgrade, the new platform would go a long way in ensuring GE maintained its market share as well as operate efficiently in new markets it enters into. According to (Ernst & Young, 2008), in the current global market a firm cannot operate effectively without an effective ICT component in its operations. Thus, the existence of the current tools was a plus to GE. The existing platform of ICT tools was already aiding the sustainability of GE in the global market. Accordingly GE was operating in the global market and therefore the existing tool was effective enough to sustain GE operations. This presented the opportunity that GE could sustain its operation with the current tools. According to Schroeder (2008), the development of a sustainable capability of doing business is important as it encompasses how companies buy sells its products. A company needs to make its employees and customers become an integral part of its operations (Drucker, & Joseph, 2008)). For GE, the existing ICT tools gave it the ability to enable its fleet managers and drivers worldwide interact and thus feel as a core component of GE. When decision making is inclusive of the employees, better decisions are made. Synthesis/Conclusions and Recommendations There exists a gap between strategy execution and the end results of the strategy. While most companies come with excellent strategies, execution becomes a major problem. Most strategies are developed at board room level by the top executives leaving out the lower cadre workers such as the drivers and fleet managers for the GE case. Much as the drivers would fail to understand the components of a working DSS system, their input in the upgrade of the current tools to the new ones would be essential in building an effective e-business strategy by EG. Having procured the system from Micro-strategies means that chances are the lower cadre’s input on how the new DSS works was not taken into account. The e-business strategy should have been broken down into individual departments, teams and individuals working in GE. This process should have been inclusive of research and development for the ICT tools as well as the execution of the strategy. It is essential to involve the organization's work force if a strategy is to be properly executed to achieve its intended objective (Schroeder, 2008), Therefore, GE should break down strategy implementation to the various organizational levels. This is to ensure that everyone in the organization gets involved in implementing the strategy (Bensoussan, Babette & Craig, 2008). This way, the employees own the strategy and take it upon themselves to seeing its successful implementation. In conclusion, how the organization’s business and / or supply chain management practices changed with the development of the internet. GE adopted an E-business strategy and used DSS tools as a way of enhancing service provision for its customers through better service delivery by improving how the decision making process in the organization was. Businesses need to adopt strategies aimed for growth and profitability in order to remain relevant in the market place (Bensoussan, Babette, & Craig, 2008). References Bensoussan, Babette E., and Craig S. Fleisher (2008).Analysis without paralysis: 10 tools to make better strategic decisions. Upper Saddle River, N.J.: FT Press. Beynon- Davies P. (2004). E- business. Palgrave Macmillan. New York USA. Bhusry, Manta (2008). E- commerce. Firewall Media. Boston, USA. Cheung, S. C. (2007). 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