General Electric's (GE) e-business strategy

General Electric (GE) e-commerce strategy 1.GE Overview General Electric (GE) is a diversified global conglomerate, its history can be traced back to 1878 Thomas A. Edison created the Edison Electric Lighting Company. 1892, Edison General Electric and Thomson-Houston Electric merged, the creation of General Electric Company. Over the past one hundred years, General Electric Company has adhered to the concept of bringing a better life through science and technology, and has always maintained its technological innovation and its global leading technological advantage. Currently, GE owns 24,414 patents, cumulatively ranking first in the world. GE integrates technology, manufacturing and services, and is committed to achieving global leadership in each of the industries in which it operates.GE reorganized its original 13 subordinate industrial groups into the current 11 business groups in January 2004: Energy Group, High-Tech Materials Group, Consumer Financial Services Group, Business Financing Group, Healthcare Group, Consumer and Industrial Products Group, Infrastructure Group, National Broadcasting Company, Transportation Group, Equipment Services Group, and Insurance Group. If ranked individually, at least nine of the business groups would rank among the world's 500 largest companies.GE operates in 160 countries around the world, including 270 manufacturing plants operating in 26 countries, and employs more than 300,000 people worldwide.GE's foreign revenues have risen each year, and in 1999, the company's revenues outside the U.S. accounted for 41 percent of its more than $107 billion in total revenues, which amounted to $43.9 billion. GE has a long history in China, with 11 business groups currently operating in the country, 20 offices and nearly 30 joint ventures or wholly owned enterprises, with a total investment of more than $1.5 billion. GE remains one of only seven 3-A rated industrial companies in the world. For six consecutive years, GE has been named one of the "World's Most Admired Companies" by the Financial Times. 2. GE's e-commerce strategy Transforming from a traditional industrial company into a new e-commerce enterprise has been listed as one of the company's key development priorities by GE. 1999, GE added e-commerce to its original three strategies of six sigma quality, globalization, and service. In 1999, GE formalized e-commerce as an additional growth strategy for the company, building on its previous six strategies of quality, globalization, and service. In the first year of implementation, e-commerce generated $1 billion in online revenue for the company. This has enabled GE, a century-old company, to maintain the momentum of rapid development in the new century. This change had a huge impact throughout the Western corporate world, and GE hoped that by promoting e-business, it would be able to find and establish a future business model for a company that had been a leader for over a century. In 2000, GE's strategic direction for e-business was threefold: to ensure that every GE business group had a customer network center to provide the highest quality of online service, sales, and support; to move internal purchasing and supplier resources online to take full advantage of high efficiencies and low costs; and to continually develop new technologies and services to increase online sales. In fact, GE, which has always been a technology leader, is not a latecomer to e-commerce. Its Information Services Group has been a global leader in the fields of electronic data interchange (EDI) and Internet-based virtual trade environment. In recent years, GE's finance, plastics, medical equipment, aircraft engines, power systems and other departments have conducted online sales, customer service, information dissemination, remote equipment monitoring and maintenance, as well as employee recruitment, internal management and other activities through the Internet according to their own business, in which Polymerland.com, a sales website of the GE Group, had a one-week trading volume in 2000 The reason why GE raises the e-commerce strategy to the important height of deciding the development of the enterprise is that GE's senior management fully foresee the development of the Internet will bring the influence to all economic entities. The development of the Internet makes all relationships between enterprises and customers, enterprises and employees, employees and employees become transparent, and knowledge is power becomes the past. Because all people can easily access a large amount of information at the same time, the traditional way of doing business will inevitably be impacted, including the disintegration of intermediaries, pooled competition, virtual business community, full penetration of customers, dynamic pricing, targeted products, collaborative markets, partner services, etc. has been initially apparent changes in the business model. GE pushes the e-commerce, it is in order to grasp in a timely manner and participate in these changes GE's promotion of e-business is precisely to grasp and participate in these changes in a timely manner, to continue to stay ahead of the curve in the area of "faster and better customer satisfaction" through changes in the seller (customer), buyer (supplier), investment business, and internal processes, thus maintaining the vitality of the company's development and consolidating its leadership position, which is another practical manifestation of GE's entrepreneurial spirit of viewing change as an opportunity. GE is still the best company in the world, and it is driving the e-commerce revolution with the greatest enthusiasm. This will not only determine the future fate of this century-old giant, but will also have far-reaching global implications. Internet Week, the most famous Internet and information technology magazine in the U.S., for the first time ever surveyed major U.S. companies on the theme of "Internet Week 100", and selected the most leading e-commerce companies in 10 major industrial sectors, and GE was named "E-Commerce Company of the Year" for 2000. 3. GE's e-procurement system GE has been actively promoting the strategic transformation to an e-business enterprise, and has achieved very obvious benefits. The following is only an example of the situation after GE's Lighting Engineering Group (Note: the group's business was merged into GE Energy Group after January 2004) adopted an Internet-based e-procurement system: GE's raw material costs increased by 16% during 1982-1992, while prices remained unchanged or even began to decline during the same period. In order to offset the disadvantages due to rising costs, GE went all out to improve its purchasing methods, which were analyzed and found to be inefficient with too many intermediate transactions. More than a quarter of the shipments had to be refilled because of discrepancies between the data on the orders, receipts, and shipment orders. GE Lighting Engineering Group used to send requests for quotations to the corporate purchasing department for many low-priced mechanical parts on a daily basis. Purchasing sent hundreds of RFQs to partners every day to get the lowest price for raw materials. The manual purchasing process used to be that the purchasing department had to attach a design to each RFQ; the design had to be retrieved from the company's technical data files, photocopied in the copy room, folded and sent in an envelope with the RFQ. This process takes 7 days to complete and is very complex and time consuming. Due to the cumbersome process and time constraints, the company's purchasing department usually sends the bidding documents to only two or three suppliers at a time. Since 1996, when GE launched its first online purchasing system (TPN Post), the process has become much simpler and faster. Today, GE Lighting Engineering Group's e-procurement practice is to send an electronic request for quotation by e-mail to the Purchasing Department, which then sends out the tender documents to suppliers worldwide via the Internet. The system automatically retrieves accurate design drawings and automatically attaches the correct diagrams and attachments to the RFQ. Within two hours of the Purchasing Department beginning to process the procurement process, suppliers worldwide receive the RFQ by e-mail, fax or EDI, have seven days to prepare their bids and send them back over the Internet, and the bid evaluation process is completed and the winner is ultimately selected the same day GE receives the bids. Lighting Engineering Group has realized a number of benefits from the implementation of the online purchasing system (TPN): the online purchasing system has freed up and reassigned 60% of the company's personnel responsible for purchasing. The purchasing department was freed from a lot of paper, copying and mailing and was able to free up at least six to eight extra days a month to focus on strategic development issues. Being able to contact a wider range of suppliers online has resulted in a 30% savings in labor costs in purchasing and a 5% to 20% reduction in raw material costs. Whereas it used to take 18 to 23 days to identify suppliers, prepare tender requests, negotiate prices with suppliers and sign contracts, it now takes only 9 to 11 days. The transaction process is conducted electronically from start to finish, and receipts are automatically aligned with purchase orders, reflecting all changes that occur throughout the process. Purchasing departments around the world on the best suppliers to share information with each other. 1997 February, GE Lighting Engineering Group through the Internet found seven new suppliers, one of them even 20% lower than the other's offer. GE estimates that the overall change in purchasing methods alone can save the company between $ 500 million and $ 700 million a year.