Ge Medical Systems

GE Medical Systems

Problems and Recommendations

Management 503: Organizational Analysis and Management

Summer 2011

Team A:

Gaurav Singh

Jeremy Chew

Kevin Toth

Marc J Malate

Sage Cho

Executive Summary

GE Medical Systems (GEMS) had made significant progress by the year 2000 due to implementation of Six Sigma, global expansion and overall healthcare improvements. Cost competition and the need to maintain CAGR of 20% drove GEMS to differentiate its organizational structure in order to meet the challenges of doing business in new locations. Although GEMS conducts business in many countries, our report will focus mainly on if and how GEMS should modify its current global business in the context of China. Given China's market potential for medical diagnostic equipment (3rd largest economy in the world[1], large number of hospitals and diagnostic centers), we attempt to analyze and recommend a strategy for a successful penetration into the Chinese market. Successful execution in China is critical for GEMS to achieve its aggressive current and future goals. Besides this, we will analyze the impact of launch of Six Sigma of GE in context of penetrating in the developing markets. Considering that health equipment requirements are modest and hospitals in China and India cannot afford highly priced health equipments, the problem facing executive management lies in identifying the best strategy for developing countries. Previously, GEMs had concentrated on developing products to meet the needs of medical consumers and institutions in developed countries. Another major issue for executive management is to understand what type of management style will work in these countries, since cultural differences will require different motivational strategies and incentive structures that work in America.

Key Change Drivers

Shifting of Manufacturing to Low Cost Countries - Since 1997, GEMS has shifted its manufacturing facilities to various low-cost countries. Estimates...