Environmental Analysis Paper
Strategies for Competitive Advantage
Environmental Analysis Paper
Introduction
“A host of external factors influence a firms choice of direction and action and, ultimately,
its organizational structure and internal processes” (Pearce and Robinson, 2004). These
factors are the basis for the forces and trends research. This essay presents the research on
forces and trends as they affect specific businesses. This research will allow businesses to
identify not only forces and trends, but also challenges and opportunities.
General Electric-
Technical
In the energy/utility industry, technological forces and trends are important factors to
identify and understand. This may include creative technological adaptations or
technological breakthroughs. The competitive climate is characterized by changing
technology that requires continued research and development.
“Creative technological adaptations can suggest possibilities for new products, for
improvements in existing products, or in manufacturing and marketing techniques” (Pearce
and Robinson, 2004).
The ability to notice trends early has provided the competitive edge for General Electric.
Rising costs for energy, water, global warming and greening, trends bring concerns to
General Electric. They realize issues regarding energy efficiency policies and emission
standards need to be addressed. The worlds energy market is changing. To meet the
challenges, technology will pay a huge role for GE. Breakthroughs in renewable energy,
fuel cells, nuclear energy and coal gasification will have a tremendous impact on the
environment and GE customers.
Ecomagination is GEs commitment to address challenges such as the need for cleaner,
more efficient sources of energy, reduced emissions, and abundant sources of clean water.
It is GEs commitment to help their customers and society at-large solve environmental
challenges and drive future growth for their company through a diverse portfolio of new
technologies and research initiatives. The goals announced by GE include:
Investing $1.5 billion annually in cleaner technologies researched by 2010, up from $700
million in 2004.
Introducing new products and services that offer significant and measurable performance
advantages to its customers.
Doubling by 2010 revenues from products and services that provide significant and
measurable performance advantages to customers. There are 17 products that meet its
criteria, ranging from renewable energy to water purification and cleaner transportation.
Reducing GEs own emissions tied to global warming by one percent by 2012.
“We think green means green. This is a time period where environmental improvements
are going to lead us toward profitability. This is not a hobby to make people feel good,”
stated GE Chief Executive Officer Jeffery Immelt (Lavelle). According to Immelt,
ecomagination is GEs commitment to address challenges such as the need for cleaner,
more efficient sources of energy, reduced emissions and abundant sources of clean water.
And they plan to make money doing it.
Economic
The impact on policy on long term investment decisions represents one of the most critical
aspects in the utility industrys current strategy and its future structure. The global energy
and utility markets have never been this acute. Consumption has increased, volatile fuel
costs and a major focus on environmental presence brings major challenges to the industry.
“Economic factor or forces that need to be considered for examination may include the
availability of credit, the level of disposable income, the ability of people to spend their
money, prime interest rates, inflation rate, trends in the Gross Domestic Product (GDP),
and the direction of the economy which the company operates”(Pearce and Robinson
2004). It is projected that the world electricity consumption will double between now and
2030.
GE has in place an Integrated Gasification Combined Cycle (IGCC) system that
successfully converts coal into a cleaner burning energy. This system makes it easier to
separate CO2 which helps reduce sulfur dioxides, nitrogen oxides, mercury and other
products that would be omitted into the air.
GE has started a solid oxide fuel program which will enable more cost effective solutions
in energy generation. This program provides a continuous flow of power at high
temperatures which greatly enhances energy efficiency. In addition, GE has more than 35
years of experience in design, supply and support of geothermal plants. This is another
option to drive energy at a lower temperature heat at a reduced cost.
Hydroelectric power is yet another source of energy that is widespread across the world.
GE is determined to improve efficiency and make it a more cost-effective source of power.
Researchers are working on cutting-edge technologies that will provide better
hydroelectric turbines to do the job.
Developing and maintaining load capacity flexibility by meeting current and future
consumption is just one of the major key challenges. In addition, there are growing
environmental concerns that need to be integrated into the overall strategy along with
infrastructure requirements and capital availability.
Major environmental concerns to the public, policy makers and industrial executives are
the substantial increase in carbon dioxide emissions related to fossil fuel consumption.
Coal represents the most available and economical commodity. These demands will
provide challenges that will lead to operational, policy and technical innovations.
Social
More and more utilities provide both electricity and related services to help customers
reduce their electric bills more than ever before. These services are a social benefit and
include controlling the energy demand, reducing the emissions of carbon dioxide and
slowing global warming. The social factors affecting a company “involve the beliefs,
values, attitudes, opinions, and lifestyles of persons in the firms external environment, as
developed from cultural, ecological, demographic, religious, educational, and ethic
conditioning”(Pearce and Robinson, 2004).
These services are called demand-side management or DSM programs. DSM programs
can reduce the amount of electricity used by improving the technical and operational
efficiency for their customers. The timing of electricity is done by direct-load control
