GE - Moreover improving firm infrastructure helps in...

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GE’s future business-level strategy GE’s plan is to build New Capabilities by Investing in Technology and Marketing. GE wants to concentrate more on internal investments to grow bigger by expanding its R&D and long term product development. In order to complete the plan, GE needs 5 main things, which are an external focus, an ability to think clearly, imagination and courageinclusiveness and connection with people and, in-depth expertise. Therefore, its future business-level strategy is “Cost Leadership” or CL. To invest in new technology, GE hopes to decrease cost of producing products and become more efficient, which can be done by using CL strategy. Technology development advantages are easy-to-use manufacturing technologies and lowering costs associated with a firm’s manufacturing processes. CL strategy allows the company to continuously improve levels of efficiency and cost reduction.
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Unformatted text preview: Moreover, improving firm infrastructure helps in cost-effective management information systems and relatively few managerial layers in order to reduce overhead costs and simplified planning practices to reduce planning costs. The advantage of CL is that it makes the firm hold an attractive position in term of product substitutes, with the flexibility to lower prices. However, GE must be aware of the risks, which are the source of cost advantage may become obsolete, focusing on cost reduction may cause GE to overlook the importance of customer preferences, and imitation. If CL strategy works, the company will become more competitive against its existing competitors because those competitors may hesitate to complete with GE’s low prices. It also will gain more customers with low prices....
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