GE NBC Universal is one of the world’s leading media and entertainment companies owning a television network, world-renowned theme parks, Motion Picture Company and other various media outlets. While GE NBC produces lower revenue than its competitors, such as Disney and Time Warner Inc., GE maintains a relatively competitive profit.
Another large competitor GE faces is Koninklijke Philips Electronics competing on more of a technological battlefield. Phillips is a global company that generates more than 39 billion in sales and employees 161,000 people in over 60 countries. Phillips is one of General Electric’s smaller competitors though Philips Medical Systems is increasingly creating more competition in that business segment of General Electric. General Electric’s main advantage is the fact that they are so diversified. The competition is steep in each of their individual companies, but there are few companies that can compete with General Electric as a whole.
- New Entrants
The threat of new entrants for General Electric is small due to the vast size of the company. Many of GE's companies require a great deal of brand recognition to stay successful. The scale of economy that GE operates in places a hardship on new entrants to any of the three major segments of GE.
The financial services industry would require an extremely large amount of start up cost and capital making it difficult for small companies to compete. The finance industry also hinges on an established and trusted name for success. The threat of new entrants to the finance industry competing on the scale that GE competes in is very small.
GE’s NBC also has little threat of new entrants imposing competition. In the world of broadcast and entertainment there is also a great deal of monetary value that must be expended in order to even have hopes of competing with such networks as NBC. New entrants must also face the legal barriers licensing regulations created by the government to limit entry into the broadcast industry. Not only must new entrants have a mass amount of capital and legal issues but they must also compete with the NBC name.
Technology is yet another industry that requires large capital and expense. It would be difficult for new entrants to obtain the cash and development that is essential in this industry. Also, new companies must take into realized the channels of distribution for the production of technologies are difficult to achieve without an already established relationship. The threat of new entrants in all aspects of GE is low due to the repeating trends of the market requirements that GE employs. People already have a solid relationship with the brand name GE, and it would be very expensive for a new company to try and compete with it. It would require a great deal of capital in advertising to get a new companies brand name out to the public. All of GE's companies are in very large-scale economies, which are difficult to break into.
- Threat of Substitute Products
Every company has to worry about the threat of new products being created which would make their product obsolete. GE is no exception. Just about every product that General Electric creates has the threat of substitute products.
The financial segment of GE is not as susceptible to a threat of substitutes as other units of GE. A consumer is not as likely to switch their financial provider, as they are their light bulb brand.
GE NBC is one segment that could be prone to substitutes. Substitution for 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 at-risk industry to threats of substitutions. From their consumer products to their healthcare technologies, everything has the ability to be taken over by a newer technology or a more efficient product.
General electric’s advantage in this field is their strength of brand name. With new products coming out all of the time, consumers may be reluctant to switch due to their loyalty to the GE brand name.
- Bargaining Power of Buyers
Due to the size of General electric, they have considerable bargaining power for most of their products. For many of their companies, the switching cost for buyer is extremely high. This is true with the financial, broadcasting and technology industry. For many companies, such as GE Healthcare, the volume per buyer is very large in both quantity of goods and cost of goods. This makes the switching cost for buyers high, giving GE yet another advantage over their buyers. This is true for most of their companies, but not all. Some of General Electric’s companies, such as GE Consumer and Industrial, the switching cost of buying a different product is minimal. In these few scenarios, GE must stay competitive in the price wars with their competition.
- Bargaining Power of Suppliers
The bargaining power of suppliers is relatively low for General Electric’s many industries. Due to the sheer volume of goods that GE buys from their suppliers, the suppliers have no ability to bargain with GE. Most of GE's suppliers could not survive if they lost GE's business. General Electric is also very flexible in who they choose to be their suppliers. This gives them the advantage of having suppliers fight for their business.