General Electric Rivalry

Identify the economic characteristics of the industry (Porter’s Five Forces Classification)

1. Rivalry

In conclusion, GE has high brand recognition, market share, access to assets and competencies and customer loyalty, making it highly competitive within the industry. We can analyze the rivalry as following:

(1) Rivalry with Siemens AG (SI), the biggest competitor

General electric is one of the world's largest and most diversified companies. With eleven different segments of the company, ranging from Advanced Materials to NBC Universal, General electric has a strong hold on many separate markets. As a whole, General Electrics' main competitor on a conglomerate level consists of Siemens.

Siemens AG (SI) is a leading diversified

company offering products and services in information and communications, automation and control, power, transportation, medical, water and wastewater treatment, lighting, financing, real estate, and home appliances. Siemens' is one of the largest markets in the world, with thirteen worldwide businesses and annual sales of $97 billion. Siemens companies in the U.S. employ approximately 70,000 people and 430,000 people globally. Siemens’ most closely mirrors General Electric’s size and structure, making it their largest competitor.
(2) Acquisitions, mergers and joint-ventures
GE has performed several mergers in the recent past. These not only help the company to expand globally but to diversify its activities into new areas thus increasing productivity. Some of the companies include Interbanca S.P.A, Whatman Plc, VetoGrey and Turbomecanica Combustor Products.
(3) Innovation and technological improvements
Intensified research and development characterize GE’s activities to ensure the competitiveness of its products in the industry, thus maintaining a competitive edge over others in the same industry.

(4) Large industry size

Large industries allow multiple firms and produces to prosper without having to steal market share from each other. This increases rivalry because more firm must compete for the same customers and resources.

2. Threat of Substitutes

Each company must worry about the threat of new products being created that can make their product obsolete. Every product of General Electric has the threat of substitute. Being very well-diversified means that GE is spreading the risk of failure in every market.

For example, substitution of GE NBC is as easy as viewers switching a channel and advertisers switching networks. This creates a high level of competition that promotes companies to continually have the edge over their competitors.

The technology industry is also an industry prone to threats of substitutions. From the consumer products to their healthcare technologies, everything can be taken over by a newer technology or a more efficient

product.