General Electric Porter’s 5 Five Forces Model: Detailed Analysis (2021)


 

Company Overview:

General Electric has transformed itself over the past years. The company now builds everything from jet engines to nuclear power, windmills, and electric grids. But its biggest business is still making gas-fired turbines for electricity generation at power plants. Founded in 1892, the company is based in Boston and has more than 300K employees. In 2021, the company had a revenue of $117.5 billion. General Electric’s primary business segments are Power, Renewable Energy, Aviation, Healthcare, and Oil & Gas. The company’s Power segment provides gas and steam turbines for electric power generation, as well as parts and services for the renewable energy industry. Let’s go over GE Porter’s Five Forces,

 

 

General Electric Competitive Rivalry:

 

General Electric faces competition from other large energy companies such as Siemens and Mitsubishi. GE, however, seems to win the battle by using aggressive marketing techniques combined with lower prices. Although many competitors exist in the energy industry, none of them pose a real threat at this point in time since General Electric has been able to diversify its business lines.

 

 

General Electric Bargaining Power of Suppliers:

 

 

For the past years, GE has been mainly focused on purchasing raw materials from other companies in order to manufacture their products. No matter how much energy they put into reducing prices for suppliers, it will never be enough because suppliers can always decide to sell their products to other companies.

 

 

General Electric Bargaining Power of Buyers:

 

 

The company’s main buyers are utility companies, which are typically very large and have a lot of bargaining power. In addition, GE has also been selling more products and services to developing countries, which gives them even more leverage in price negotiations. However, buyers could switch to other suppliers like Siemens or Mitsubishi if they feel like GE is overcharging them.

 

 

General Electric Threat of New Entrants:

 

Even though new technologies are being invented every day, it is still very hard for a new company to compete with such an established and diversified one. However, GE is not immune to this and has been feeling the heat from new entrants in the renewable energy market. Competitors like SunPower and First Solar have been eating into GE’s market share.

 

 

General Electric Threat of Substitutes:

 

The primary threat to GE comes from alternative energy sources such as solar and wind. These substitutes are becoming more popular as technology improves and they become more cost-effective. Companies like SunPower and First Solar are leading the way in this market.

 

 

Porter’s 5 Forces Conclusion:

 

Even though General Electric is facing several challenges, it has been able to create a strong competitive advantage over its competitors by diversifying itself and using aggressive marketing techniques. In addition to that, GE has been expanding into new markets such as windmill production which will. One thing to note is that GE’s oil & gas division has been struggling lately, however it’s not big enough to pose any real threat at this point in time. Even if its operations were to become profitable,

 

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