Environmental Analysis Paper

Environmental Analysis Paper

Strategies for Competitive Advantage

Environmental Analysis Paper

Introduction

"A host of external factors influence a firm's 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 world's 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 GE's 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 GE's 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:

Ð'* Investing $1.5 billion annually in cleaner technologies researched by 2010, up from $700 million in 2004.

Ð'* Introducing new products and services that offer significant and measurable performance advantages to its customers.

Ð'* 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.

Ð'* Reducing GE's 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 GE's 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 industry's 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 firm's 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