General Electric Case Analysis Case Recap General Electric, (GE), is a diversified technology and financial services corporation that has a history of tremendous success. The company’s name is well known across the United States and is recognized by consumers as the “practical innovator” (Crystal & Herskovitz, 2010). In order to continue its achievements, GE’s strategy is to focus its resources in new product innovation and comprehensive brand positioning. It has created the “Profile” and “Monogram” brands to re-invent kitchen appliances and to transform its image to being more upscale.
GE’s marketing leadership would like to continue to conduct significant research to gain cutting edge features that will excite their customers to pay more for innovation to generate a higher profit (Crystal & Herskovitz, 2010). It has a significant advantage over its competition due to its long-lasting and implied trust from its brand that has distinguished itself over the past 100 years. Problem Identification The problem that GE faces is creating an emotional impact and connection with potential customers in order to stimulate an interest to purchase its brands.
Numerous products are bought, not because of intellectual reasons like price or quality, but because of emotional needs and wants. Consumers’ decisions are made with emotions and they justify with logic to support that way of thinking. GE needs to convince potential buyers that these appliances are a necessity for safety, security, and convenience. Certain feelings and emotional drivers need to be triggered so that people will feel happy, comfortable and complete if they buy. The products they are exposed to in stores and on different forms of advertisement need to make them feel safe with knowledge they are getting good value.
GE needs to produce this value in its appliances, but receive a higher price with this emotional connection. Identifying the Root Problem Components While the problem for GE is creating an emotional impact with its potential customers – there are other issues that need to be addressed in this challenge. One important factor is the possibility that new innovations could drive customers to pay more for their appliances. A great deal of resources would need to be dedicated to significant research and development to achieve the necessary results.
Another key issue is to determine which distribution strategy could be developed to protect the brand experience. The best distribution method must be determined to get the appliances into the hands of the customers. SWOT Analysis Opportunities: * Customers will pay more for new innovations. * Areas of higher income or home building may be opportune markets. * A higher quality product could drive a change for higher prices. * New technical features attract tech-savvy clientele. * New kitchen appliances could significantly change a family’s life. Strengths: GE has a long-lasting and implicit trust in the appliance industry. * Commitment and a strong customer base will make it easier with the introduction of new products. * A top-notch research and development division makes design goals achievable. * The market is attractive due to the fact that everyone with a home could be potential customers. Threats: * A negative change in the economy could derail home equity or cash needed to pay for appliances. * To upgrade an entire kitchen to avoid mismatching appliances may lead one to buy from a competitor. Determining the best marketing locations to launch higher-cost products may be challenging. * There is a potential for product obsolescence after development. Weaknesses: * A significant amount of resources is being spent on research and product development. * Expensive appliance sets for home kitchens could narrow the base to a very small target buyer. * Customers shopping for one replacement appliance may resort to a different brand due to feeling obligated to purchase an entire GE set. Evaluation of Alternatives
General Electric has two options in order to achieve marketing success in the kitchen appliance business. The company could spend less money on research and development to target consumers looking for a more traditional and cheaper product in hopes of selling a large quantity. The second option would be to spend a great deal of money on research and development in hopes of attracting potential buyers with additional features and become the trailblazing company that revolutionized the kitchens across the United States.
The first alternative option, requiring the least innovation, would allow GE to save money without extensive research and development. However, this would create a very small emotional connection with the customer as it would only be another new machine or satisfy his or her banking account. Another potential risk is the possibility of having a different company paving the way with new kitchen appliance technologies. The easiest way of getting into someone’s mind is to be first. GE has always been the leader and needs to heavily compete in the race for technological advances and features.
The second option, to spend a majority of resources on research and development, would be risky. GE would be very well advanced, but it would be accepting too much risk in limiting itself to only high-tech appliances. Like cell phones, there will be a great deal of customers that can either only afford the non-advanced unit or they will want to operate something that is very simple and not requiring and technical skills. GE has produced the re-invented and upscale “Monogram” and “Profile” lines in order to push this new product.
These lines provide full kitchen suites with incredible features, energy savings, high-end quality and impeccable results. The target market is wealthier Americans, people with home equity and new construction areas of middle to upper-class people. Recommendation It is likely that a final proposal should try to accomplish a mixture of the two options in order to both revolutionize kitchens with advanced technology and at the same time continue to provide affordable products for those that have limited buying power.
Committing to technological advances, while satisfying the traditionalists, could provide direction to how much value customers are willing to pay for on everyday household appliances. To maintain its place in the market, GE has made an emotional impact on consumers, as it has done in the past. It continues to work very hard on a distribution strategy to protect brand experience. Monogram has limited distribution and Profile has more upscale and elegant settings. GE has shown considerable support for these dealers.
To make this connection and implement this strategy, GE has several advantages: First, the GE brand name is already in the mind of most consumers. Its memorable name and symbol can conjure up images in the minds of customers that help to position its products. GE has been selling products for over a century and its flexible stability has kept its company strong. Second, it has tapped into well accepted archetypes of innovation and entrepreneurship which creates the strength of persona. This can only be better accomplished with implicit trust and loyalty that develops over longer periods of time (Crystal & Herskovitz, 2010).
Competitors offer appliances with more of a generic look, have minimal features, are an overall lower quality and priced cheaper. Finally, because GE has undergone a number of substantial changes over the past few years, but has been able to keep hold of a stable core persona of the “practical innovator,” its chances of success will continue to rise (Crystal & Herskovitz, 2010). Reference Crystal, M. Herskovitz S. (2010). The essential brand persona: storytelling and branding. Journal of Business Strategy, 31(3), 21-24. Retrieved August 31, 2011 from ProQuest Database.