INTRODUCTION…………………………………………………………………………..

STRATEGIC POSITION OF GE AVIATION …………………………………………..3

RESOURCE AUDIT……………………………………………………………………….4

EVALUATION OF THE VALUE SYSTEM AND RESOURCES EVALUATION OF THE

GE’s AVAITION COMPANY…………………………………………………………….7

VALUE SYSTEM OF GE’S AVIATION………………………………………………...7

GE AVIATION COMPETENCE MODEL………………………………………………7

GE AVIATION VALUE CHAIN……………………………………………………….8

PRODUCT/PORTFOLIO MIX WITHIN THE AVIATION UNIT OF GE USING THE

BCG MATRIX………………………………………………………………………………10

ANALYSIS AND EVALUATION OF FUTURE STRATEGIC GROWTH IN GE

AVIATION USING GE-McKINSEY MATRIX…………………………………………..12

POTENTIAL AREAS OF FUTURE DEVELOPMENT………………………………….13

RECOMMENDATION AND CONCLUSION…………………………………………….14

REFRENCES…………………………………………………………………………………..14
INTRODUCTION

Globalization may seem to be a new thing in this current world, but the truth is some
organizations such as General Electric has been operating in this realm for decades.

General Electric Company (GE), a world’s Digital Industrial Company known for revolutionary
products with Software innovative machines and solutions that are linked, concurring and
anticipating. GE has been able to maintain a competitive edge with constant innovative
technologies, improved products and services with well-trained staffs. www.geaviation.com/dig.

In this report we will critically analyze the Aviation unit of this conglomerate using resource
Audit, Value Systems, BCG Matrix, Potential future strategic growth.

Information gathered from the business value chain, analysis of tangible and intangible assets,
intellectual capital aggregately will formulate the resource audit. This analysis will arguably
explain the differentiation strategy and value system uniquely designed for aviation segment of
the conglomerate.

The business world is becoming increasingly focused on its investment decisions as resources
become scarce, with the use of BCG, GE/ Mckinsey and Ansoff Matrix, this report will be
suggest necessary area that requires future development.
STRATEGIC POSITION OF GE AVIATION

GE Aviation, a world class provider of both commercial and military Jet engines, digital
solutions, avionics and electrical power systems for aircrafts, they even provide replaceable
proxy parts for both military and commercial aircrafts another service line GE is known for
provision of overhaul and regular maintenance of all types of aircrafts ranging from local and
presidential aircrafts, bombers, and fighters, marine operations, investigations. The vigorous
manufacturing procedure adapted produces fuel efficient engines with long lasting maintenance
and warranty. This special strategic technique offers the aviation business u nit a competitive
advantage position in the aviation industry to several commercial and military institutes that
couples and produces aircrafts, fighter jets, tankers and bombers. This company has been able to
strategically position growth and increase in revenue using Differentiation position as against her
competitors; this has broken ground for higher pricing and increase in profit.

GE has delivered more than 2,800 GE90 -94B and upgraded -115B engines to 70 operators
around the world. The engine family powers all Boeing 777 models and is the exclusive power
plant on the 777-300ER, -200LR, and 777F. www.geaviation.com/digital.

The aviation company experienced increase in revenue from US$24.2 billion in 2015 to US $
25.5 billion in 2016, showing an increase of about 5.3% in 2016, Market Line 2017, stated that
the reason for this upsurge is due to higher services volumes, Leap shipments of engines and
higher engines and servicing pricing.

GE conglomerate operates in different segments; Healthcare, renewable energy, power, aviation,

digital industry, additive manufacturing and venture capital and finance. Aviation, health care
and renewable energy have been argued to be the most successful of the firm, owning to the 70%
operating profit recorded by the organization in the 4th quarter of 2015, compared to other sector
of the organization the trio has been argued to be the most profitable and growth potential as
against the other business units.
RESOURCE AUDIT

As at 2016 the Aviation unit was able generate about 16% sales for GE with profit margin of
20.75% compared to other units of the conglomerate. In 2016 and 2017, income of 26.3billon
USD and Profit of 6.1 billon USD, income of 13.34billion USD and profit of 2.82 respectively
while the closest in success was the Power sector which able to record income of 26.8 billion
USD and profit of 4.979 USD, income of 11.843 billion USD and profit of 1.1714 USD by 2016
and middle of 2017 respectively. Below are the assets that aggregately formulate the resource
audit

Tangible Assets:

These are the physical aspects of the company. The GE Aviation unit is globally recognized as
main suppliers of jet engines, turbine engines and other related equipment internationally, this
machinery play important roles in aircraft production, fighters jets and bombers, tankers for
different commercial and military institute worldwide.

Leadership:

Prahalad and Hamel (1990) states that ability to enter new market is as a result of core
competence which is unique and inimitable and a value added service to the company.

According to Grant 2010, The leadership style of Jeff Immelt changed the leadership culture in
the company which resulted in an innovative culture called “Imagination at Work” Immelt was
noted to be motivational and demonstrates a democratic style of leadership which was the core
attribute that reshaped the leadership norm into an innovative culture within the industry, his
high level of empathy helped to be able to relate and communicate with all employee within the
unit, he was open to motivating and providing opportunities, high standards of quality
management practices .

Magee 2009 also indicated. Other notable competence of Immelt were his customer relationship
and loyalty to the investors and third parties within the company, his approach to environmental
opportunity seeks for continuous requests of the key stake holders in other to keep up its
competitive position within the market.

Human Resource

International standard training called GE Global Learning and equipment are used to empower
their 40,000 workforce, this standard training enable the employees to be able to operate, build ,
refurbish and reconstruct equipment globally (GE 2017), these trainings avail the employees
with topnotch skills and capabilities such as business knowledge, leadership grooming, personal
growth, interpersonal skills such (critical thinking, external focus etc) Magee 2009. Furthermore
Immelt as change the norm by contracting a fresh workforce with unique skills with the intent of
changing existing progression, by adding pressure on the current resource of the company.
Bucaifal 2009, confirms that despite the fact the training cost about 1 billion USD, the result of
this inspiration is effective and also economical as it will on the long run advances GE’s
organizational Model.

Infrastructure

Companies should structure based on their core competence rather than the portfolio of their
units . Prahalad and Hamel (1990)

Immelt re structured from result oriented to open, less difficult structure which re structured and
reduced management unit from twelve to six smaller wide based segments (Bucifal 2009), this
stratregy enables direct reporting to the CEO for easier communication , efficiency between the
Units heads and the CEO, increasing control span, reducing level of reporting, opportunities for
job delegations, encouragement, reduction in level of bureaucracy.

Innovation and Technology:

According to Hitt et.al., 2009 GE’s culture has changed from six sigma bean counter and bottom-
line management to innovative organization. Immelt was able to restructure the 125 year old
organization and its future has used innovative competence to tie together its diversified services
(Gonzalez, 2010). Technology and innovation has been a major focus for GE, which lead the
organization to more innovation, for example the institute of workforce shop policy plotting and
creativity has aided the organization to handle the eagerness, complexity in the industry by
expansion., prospects in the market as well as benefiting the customers. According to Bucifal
2009, an estimation of 100miion USD was invested towards the advancement of technology
which aided penetration into several markets profitably, improvement in product quality and
delivery of superior value to customers. The advent of artificial intelligence and new
technologies has improved and drastically expanded the Aviation unit’s financial projects.

Diversified Portfolio:

The diversification of GE allows shared core competencies that include shared knowledge,
copyrights, resources and skilled labour that are common in different GE businesses. GE build
strong relationships in both India and China and the potential access to diversify its markets in
those countries have, improved brand reputation, exploit work force resources, increase
efficiency and profitability, while customer satisfaction and logically develop within the
organization (Grant, 2010). Therefore, GE is competent to provide its numerous segments with
solid financial, strategic resource and reveal future growth opportunities.

Customer Service:

The Aviation company’s marketing strategy is in line with GE’s which was fashioned to focus
on out via the consumer’s satisfaction, focused on efficiency and enhancement procedures which
also improve productive training environment. GE delivers better results to customers by
speaking the language of industry
EVALUATION OF THE VALUE SYSTEM AND RESOURCES EVALUATION OF THE
GE’s AVAITION COMPANY

The key objective for GE’s R&D is a core competence and asset for the Aviation Company.

According to General Electric 2016, about $5 billion USD was disbursed to plant and technology
development. The use of addictive parts and 3D printing to cut down on several piece
applications by 30% is an extra resource, this will further enhance fuel economy rate above the
industry standard. Over 800 parts were withdrawn from the manufacture of advanced turbo
engines as a result advance technology during the development of jet engines with expense of
more than 1 billion USD.

The core competence and resource that has given the GE Aviation its competitive edge is
Innovation, for instance the FOQA (Flight Operations Quality Assurance) also referred to as
FDM (Flight Data Monitoring) which is used to review and analyze flight data records routinely
in other to avoid flight hazards during flight operations, also the use of additive tools and 3D
printing engineering process will help increase their market share with introduction of digital
solutions which will be incorporated in the manufacture of high powered jet engines. According
to GE, 2016, p.13 The GE capital business segment will provide the finances required to develop
these new solutions which will eventually be an advantage to the Aviation Company.

VALUE SYSTEM OF GE’S AVIATION

Innovation is the principal value of GE, This attribute can be linked to GE culture which support
continuous improvement without interruption. This strategic plan for evolution aligns with the
United States government stands on placing preference towards organizations that are related to
the country. GE guarantees a remarkable standard in its manufacturing plant; they also maintain
a strong and vigorous competitive edge in their manufacturing facilities. According to GE
Annual report 2016, GE operates in the era where real, major ideas about global economy is been
reviewed. GE has also made forecast that will place it in the view and most established in
American Multinational Corporation; their target is to be a globally relevant brand which is
relevant now and years to come, also to stay winning globally as American brand. According to
GE (2017), Smart innovations emerge the top of values in GE, In 2000 61% of revenue was
generated globally while 70% was from US market. Consistent growth of about 5-10% annually.

GE AVIATION COMPETENCE MODEL

In 2017 GE Aviation indicated no obvious weakness. GE has about 3000 patent right in its
authority which most are connected to the Aviation business. The Physical structure,
manufacturing plant are some of the Aviation’s business resources located in the US. The
Aviation unit also engages additive manufacturing process which is been financed by sponsors
within the company, procurement is also hassle free. The ultimate resources for GE is Human
capital which is incorporated in the stance of the organizations culture; that is to always hire
experts and innovative individuals which always add innovations to the of knowledge within the
organization.

AVIATION Intellectual Financial Physical HR

RESOURCES capital Resources Resources
Over 3000 They are the 2nd Additive Well trained
copyrights most profitable Manufacturing staffs and highly
unit with plants located on skilled new hire
sponsors within US soil
the company
FIG: 1 Resource Model of the Aviation Division
GE AVIATION VALUE CHAIN:

According to Porter 2001, value chain is a strategic plan that transforms an organizations inputs
into outputs, in way that permits better results than the initial procedure for creating
outputs.Figure 2 shows the main value chain for organizations,this value chain include 3
elements namely Prime Elements ( inbound logistics, outbound logistic, services, marketing and
sales), Support agreement ( HR, procurement , technology development, physical infrastrucre)
and margin.

Fig2: Source: business-to-you.com.

The primary activities are connected to the creation/manufacturing, sales, maintenance and
support of the Aviation unit products, this consist of every feature as it connected to the
aviation’s unit; manufacturing plants to its additive 3D manufacturing processes and its
reputation forerunner within aviation technology, the global sales of its jet engines and
maintenance services after purchase

The support activities support the primary activities. The dotted lines in the diagram above show
that every other role such as human resource management supports the primary role.
The amount of value created minus the cost of creating is referred to as Margin, which means the
greater the value the lesser the cost and the greater margin created.

In Bound Logistics:

The Inbound logistics comprises of a heterogeneous operations they are; procurement of

different categories of materials, sources of tools , services in an innovative way that increase
the efficiency of suppliers. With this, healthy relationship is sustained with main suppliers.

Operations:

Operational costs include production and energy salaries. According to GE 2018, Power cost,
Inc. an energy organization owned by an individual in collaborated with GE Aviation to link
energy operations to Energy trading for continuous software solution.

Outbound Logistics

With their innovative technologies GE Aviation has produced fuel efficient engines that has long
lasting maintenance plan.

Sales and Marketing:

The strategic market position for GE Aviation focuses on differentiation market strategy and cost
effectiveness with these, unique product has been proffered to clients also they have been able to
stay at advantage over their competitors, R &D and Innovations also contributed to their success
in meeting clients’ needs.

PRODUCT/PORTFOLIO MIX WITHIN THE AVIATION UNIT OF GE USING THE

BCG MATRIX

Evaluating the strategic position, potential and strength of GE Aviation business brands and its
portfolio using BCG Matrix. It specifies how the unit is placed to produce an over reach of
growth and future profits. This business unit has been able to attain a competitive advantage in
the global aviation industry by providing a combination of cutting-edge turbo prop, LEAP
engines, additive 3D production and an advanced military jet fighters procurement.
 Provision of Leap engine,
Advanced Turbo Prop engine, fast Work” PROJECT,
Additive 3D manufacturing and Post service Contracts
acquisition of military jet
fighters QUESTION MARKS
High STARS

Low
CASH COWS DOGS

GROWT
H RATE
Low High
MARKET SHARE
Fig 3: BCG Matrix for GE Aviation

According to GE 2016, p.23, Within GE, an effective corporation exists between Aviation and
other units. An example is a relationship between the GE Oil and gas, Aviation creates an aero
derivative engine, LM9000, which the Oil and gas unit uses for generating power and oil
compression, this initiative is called “fast Work” they are able to reduce the sequence Of cycles
by 40% and 30% increase in investments.

The GE Capital Aviation unit also provides financial service for its customers which in turn
profits the aviation unit. The aviation unit can construct agreements and contracts for after
service of their products. The use of additives has birth R&D for 3D production technology
potentials.
USING GE-McKINSEY MATRIX TO ANALYZE AND EVALUATION THE FUTURE
STRATEGIC GROWTH IN GE AVIATION

Mckinsey and company in consensus with GE designed a 9 cell portfolio in other to strategically
segment the GE BU

Aviation unit Grow Hold

High

Medium Hold Harvest

Grow

Hold Harvest Harvest

Low

High Medium Low

COMPETITIVE BUSINESS UNIT STRENGTH
INDUSTRY APPEAL

FIG: 4; GE-McKinsey Matrix for the Aviation Unit

The difference between the Mckinsey’s matrix and BCG’s is that the former explains further
using industry’s appeal and SBU strengths, here market share explains the SBU strength while
the industry’s appeal indicates the market growth rate. Altogether the Aviation unit is profitable,
integrated and an excellent innovator of aviation products.
POTENTIAL AREAS OF FUTURE DEVELOPMENT

An Organizations culture, idea and effectiveness can be measured through customers

satisfaction, GE Aviation’s Innovative culture has positioned has one of the forerunners in the
industry. According to Proctor and Hassard 1990, over the last 30years The GE/Mckinsey matrix
has been used in general for evaluating future growth perspective of an organization.

In 1981, Pascale and Athos also recorded that the combination of GE/ Mckinsey matrix and
Ansoff product/ Market Matrix for analyzing strategy produces a flawless combination of tools
and method which can give insight into the 7 S of strategic planning.

ANSOFFS PRODUCT DEVELOPMENT:

PRODUCT/MARKE ADDITIVE MANUFACTURING &
PROTECT/BUILD:
T MATRIX 3000+ copyrights
GE CAPITAL AVIATION SERVICES
GE Aviation Unit

MARKET DEVELOPMENT: DIVERSIFICATION:

Existing CHINA LEAP AND ADVANCE TURBO PROP
MILITARY MARKET ENGINE

New

MARKET
Existing New
PRODUCTS

FIG: 5; ANSOFF PRODUCT/MARKET MATRIX FOR AVIATION UNIT

According to Johnson et al, 2014, GE Aviation business is positioned to last long due to its
robust business operation.

GE Aviation is strategically positioned for continuous progress presently and in the future as it
enjoys multiple advantages from functioning within a well-structured multinational
conglomerate.
RECOMMENDATION AND CONCLUSION

The effect of globalization has disrupted the growth of many businesses, GE with the help of its
leaders as been able to meet global recognition, at large GE is a future company.

The Aviation business’s success is dependent on the conglomerate’s evolving strategic choices
from continuous improvement in cost efficiency, high flexibility, highly competitive
maintenance culture and guarantee scheme. It is highly recommended that organization retain
and continue to improve on all strategic plans that brought them this far, GE Aviation should
also fashion a strategy that will position their military equipment to the 180 countries they do
business with, this will greatly increase the profit of the unit and sustain a competitive position in
the aviation industry globally . Advertising and strategic marketing remains a superior option to
strengthen the firm's brand identity. With increasing human rights concerns and demands for
accountability, there is need for education and corporate social responsibility, as consumers are
becoming more sensitive to scientific information.

Nevertheless there are certain events that cannot be helped such as the recent pandemic that shut
down worldwide businesses and other environmental challenges.

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