Case Study 1: GE Healthcare (A): Innovating for Emerging Markets

GE Healthcare

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GE Healthcare

One of the emerging trends in the external environment has led to the development of a new strategy by the General Electric (GE) Healthcare for its production activities as well as marketing of cheap Electroencephalography (EEG) machine. This undeveloped market comprises people who are in the middle class in India. Even though they are still considered as poor per the western standards, they can afford the products that are sold at a price that is lower as compared to that set in the Western countries.

The other emerging trend in the external environment that has led to the development of a new strategy by the (GE) Healthcare is the large populations existing in the BOP markets. Most of the countries existing in the market have their governments responsible for the procurement of the medical equipment used in the hospitals. The GE Healthcare thus wanted to indulge in the large populations that are found in the BOP markets and those who are willing to implement the use of products that are affordable and those which can meet the desired performance (Herhausen, 2011).

One of the internal barriers that GE Healthcare faced in the process of its development of its BOP market in India was not being able to tap into the vast market fully (Insead, 2015). This is because the sales that were made in India only comprised a small fraction of the total sales made by the company. Also, the needs of the people in the Indian market were not given much attention in this global organization which was highly centralized. The second internal barrier that GE Healthcare faced in the process of its development of its BOP market in India is the R&D initiatives carried out in India. This was an obstacle to the development process of GE healthcare because they had the tendency of gravitating towards fulfilling the needs of the customers who are said to be in the high-end segment which was familiar to the developed customers in the GE's market. This hindered the growth of the GE Healthcare in the market since it produced and sold products that were not meeting the needs of the customers.

One of the external barriers that the GE Healthcare faced in the process of trying to achieve its goals in marketing in the Indian market is the heart disease which causes death to a large number of people in the country. The deaths resulting from this disease makes the testing of the ECG be of significant impact in the early detection. The machines produced were only designed to meet the needs of the large and the modern hospitals since they were highly priced. One of the ways to address this barrier is ensuring that the company offers machines at an affordable price to make them meet the needs of the old hospitals in the market. The second external barrier is that only a few people in the country could afford to undergo the testing using these machines which were considered to be high end since they were very expensive. In addition to this, it was not possible for the people living in the rural areas as well as the small towns to access the hospitals (Insead, 2015). One of the approaches that can be employed to address this barrier is reducing the cost incurred in the conducting of the tests using the high-end machines and also ensuring access to the people in the rural areas and small towns through the market penetration in the interior.

There are many steps that GE took with an aim of developing a long-term strategy to expand to the BOP markets. The organizations used the thought that for it to be able to expand to the markets of the developing world, it required to manage to produce useful products that will be highly competitive in the market, and thus through those products, the organization will be introduced into the BOP markets and begin making sales within them. The steps that this organization took to obtain the market access of the BOP organizations related directly to strategic thinking. This is because the organization, to begin with, formulated a single product to act as an experiment in providing the organization with information on how the market of the BOP operates. Despite the fact that the Indian market did not provide revenue that could be considered successful with the GE standards, it could be regarded as successful in the Indian Markets (Insead, 2015).

The GE's healthcare's strategy in improving its BOP market's position contributed significantly to both developed and developing markets. For the case of developing markets, to begin with, the organization managed to formulate means through which it could penetrate their market. Through the first product, ECG for the Indian market that it formulated, it obtained the basics of the BOP market on how to penetrate these markets. For the case of the developed markets, on the other hand, the organization managed to increase its market area and thus increased its market value and abilities to obtain more capital (Hutt, & Speh, 2013).

References

Herhausen, D. (2011). Understanding proactive customer orientation: construct development and managerial implications. Wiesbaden: Gabler Verlag.

Hutt, M. & Speh, T. (2013). Business marketing management: B2B. Australia Mason, OH: South-Western, Cengage Learning.