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General Electric Healthcare 2006 Case Solution

Solution Id Length Case Author Case Publisher
2752 1370 Words (5 Pages) Tarun Khanna, Elizabeth A. Raabe Harvard Business School : 706478
This solution includes: A Word File A Word File

GE makes diagnostic medical equipment. The company has two major competitors, and they are Siemens and Philips. The company invests a lot in its R&D so it will be able to improvise its technology and stay ahead of its competitors. The company operates worldwide, and they do realize that each country has different demands, and they have to customize their product and they have to alter their strategy according to the need of that particular country. The company has realized much potential for diagnostic medical equipment in China and Latin America, and the demand in such countries has been growing. Also, China has the highest demand for low-end diagnostic equipment. GE has adopted a few strategies to cater to such markets, and the company is continuously working to make their product better and to come up with strategies through which they will be able to perform better in countries like China.

Following questions are answered in this case study solution

  1. What’s the global potential of the diagnostic imaging systems industry?

  2. Does GE Healthcare have a coherent strategy-structure configuration?

  3. What should GE Healthcare do in order to compete in China against its rivals?

Case Analysis for General Electric Healthcare 2006 Case Solution

1. What's the global potential of the diagnostic imaging systems industry? 

The GE medical system believes that customers and patients worldwide are the same. But each country requires customization when it comes to the product. The rich and developed countries tend to buy more sophisticated equipment, but also, when it comes to such products, cultural differences may arise in some countries as some countries, due to health concerns, use less nuclear medicine. Though globally, there are a lot of potential and GEMS products can be adapted by other countries, there is one major complication engineers from one country cannot design the product for another country as engineers in the US won't be able to understand the needs of China. The company has a gold seal program through which GEMS manages its used equipment market. They acquire used equipment from one location and then place it in another, and another strategy is refurbishing the equipment. The global market has a lot of potentials, and the market is growing at a rate of 8-10% per year; the global market is worth $1.3 billion. There are a few major players in the market; Siemens, Philips and GE and these players hold 50% of the market share. 

For GE, the company has observed a lot of growth, especially in Asia and Latin America, focusing more on refurbishment. The company has also observed 100% annual growth in areas like Asia and Latin America. GE has refurbishment facilities in Japan, America, Europe and China. The company has observed that when it comes to cross-border sales, the fraction of used business is around 30%. The biggest challenge for GE in terms of cross-border business is the involvement of brokers, as these brokers have low overheads and they don't have a passion for six sigma quality. GEMS also launched signa, its latest MRI technology, worldwide; the company invested around $50 million and around 2.5 years to develop this technology.

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