Digital Transformation Failure
$GE Aerospace(GE.US$
This is some old news but it is important to understand what went wrong. In 2015, General Electric created a subdivision called GE Digital. They hoped to dominate the industrial internet. However, GE was slow to digitally transform. Most companies transformed in the ‘90s and mid-2000. GE dumped billions of dollars into this project and appointed thousands of employees to oversee the transformation. So where did they go wrong? GE moved away from its core business and spread its resources too thin. They focused on quantity instead of quality. Well-knownGE’s companies like Apple, Microsoft, and Google who dominate the tech industry, made it hard to compete.
This is some old news but it is important to understand what went wrong. In 2015, General Electric created a subdivision called GE Digital. They hoped to dominate the industrial internet. However, GE was slow to digitally transform. Most companies transformed in the ‘90s and mid-2000. GE dumped billions of dollars into this project and appointed thousands of employees to oversee the transformation. So where did they go wrong? GE moved away from its core business and spread its resources too thin. They focused on quantity instead of quality. Well-knownGE’s companies like Apple, Microsoft, and Google who dominate the tech industry, made it hard to compete.
Porter’s Five Forces Model
1. Threats of New Entrants
a. Increased competition in the aviation industry
b. Barrier to Entry (Healthcare): Regulation from HIPAA and FDA
c. Barriers to Entry (Renewable Energy): Lack of infrastructure, fewer government subsidies compared to fossil fuels
d. The overall threat of new entrants is weak due to the high cost of entry
a. Increased competition in the aviation industry
b. Barrier to Entry (Healthcare): Regulation from HIPAA and FDA
c. Barriers to Entry (Renewable Energy): Lack of infrastructure, fewer government subsidies compared to fossil fuels
d. The overall threat of new entrants is weak due to the high cost of entry
2. Supplier Bargaining Power
a. GE has an extensive list of suppliers. The most notable ones are: $3M(MMM.US$, $Honeywell(HON.US$ , $Boeing(BA.US$, $Exxon Mobil(XOM.US$, and $Berkshire Hathaway-A(BRK.A.US$
A lot of these suppliers products overlap with each other, meaning, GE has many options
a. GE has an extensive list of suppliers. The most notable ones are: $3M(MMM.US$, $Honeywell(HON.US$ , $Boeing(BA.US$, $Exxon Mobil(XOM.US$, and $Berkshire Hathaway-A(BRK.A.US$
A lot of these suppliers products overlap with each other, meaning, GE has many options
3. International Competition
Competition is stiff from companies like Siemens and 3M
Competition is stiff from companies like Siemens and 3M
4. Threat of Substitutes
There are few substitutes in the market so the threat is minimal
There are few substitutes in the market so the threat is minimal
5. Customer Bargaining Power
GE has a wide range of customers. The most notable ones are: $DISH Network Corp(DISH.US$ , $Emerson Electric(EMR.US$ , $Caterpillar(CAT.US$, $ABB Ltd(ABB.US$ , $Honda Motor(HMC.US$
It is interesting to note that a couple of GE suppliers are also GE customers
GE has a wide range of customers. The most notable ones are: $DISH Network Corp(DISH.US$ , $Emerson Electric(EMR.US$ , $Caterpillar(CAT.US$, $ABB Ltd(ABB.US$ , $Honda Motor(HMC.US$
It is interesting to note that a couple of GE suppliers are also GE customers
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