General Electric (GE)’s e-commerce strategy 1. Overview of GE General Electric Company (GE) is a diversified global conglomerate whose history can be traced back to its founding by Thomas A. Edison in 1878. of the Edison Electric Lighting Company. In 1892, Edison General Electric Company and Thomson-Houston Electric Company merged to create General Electric Company. For more than 100 years, General Electric has adhered to the concept of using technology to bring a better life, always maintained technological innovation, and maintained its world-leading technological advantages. Currently, GE holds 24,414 patents, ranking first in the world cumulatively. GE integrates technology, manufacturing and services and is committed to achieving global leadership in every industry in which it operates. In January 2004, GE reorganized its 13 original industrial groups into its current 11 business groups: Energy Group, High-Tech Materials Group, Consumer Financial Services Group, Business Financing Group, Medical Health Group, and Consumer and Industrial Products Group, Infrastructure Group, NBC, Transportation Group, Equipment Services Group, Insurance Group. If ranked individually, at least nine business groups can be ranked among the world's 500 largest companies. GE operates in 160 countries around the world, including 270 manufacturing plants operating in 26 countries, and employs more than 300,000 people worldwide. GE's overseas revenue has increased year by year. In 1999, the company's revenue outside the United States accounted for 41% of its total revenue of more than 107 billion U.S. dollars, reaching 43.9 billion U.S. dollars. Sales revenue in 2003 reached US$134.2 billion. GE has a long history in China. At present, 11 of its business groups have started operations in China, and it has established 20 offices and nearly 30 joint ventures or wholly-owned enterprises, with a total investment of more than 1.5 billion US dollars. GE remains one of only seven Class 3-A industrial companies in the world. It has been awarded the title of "The World's Most Admired Company" by the Financial Times for six consecutive years. 2. GE's e-commerce strategy has been listed as the focus of GE's development from a traditional industrial company to a new e-commerce enterprise. In 1999, GE officially listed e-commerce as another development strategy for the company's business growth based on its original three strategies of Six Sigma quality, globalization and service. In the first year of e-commerce implementation, the company achieved online revenue of US$1 billion. This enables GE, a company with a century of glory, to maintain the power of sustained and rapid development in the new century. This change has had a huge impact across the Western corporate world. GE hopes that by promoting e-commerce, it will find and establish a future business development model for a company that has been a leader for a century. In 2000, GE's e-commerce strategic direction had three aspects: ensuring that each GE enterprise group has a customer network center to provide the highest quality online services, sales and support; transferring internal procurement and supplier resources online , to give full play to the advantages of high efficiency and low cost; continuously develop new technologies and services to increase online sales. In fact, GE, which has always been a leader in technology, is not a latecomer to e-commerce. Its information services group has always been a global leader in fields such as electronic data interchange (EDI) and virtual trade environments based on the Internet. In recent years, GE's finance, plastics, medical equipment, aircraft engines, power systems and other departments have conducted online sales, customer service, information release, remote equipment monitoring and maintenance, employee recruitment, internal management, etc. through the Internet based on their own businesses. Among them, Polymerland.com, a sales website of GE Group, had a transaction volume of US$5 million in one week in 2000, and achieved US$1.5 to US$2 billion in 2001. The reason why GE has elevated its e-commerce strategy to an important level in determining corporate development is that GE's senior management fully foresees the impact that the development of the Internet will have on all economic entities. The development of the Internet has made all relationships between enterprises and customers, enterprises and employees, and employees and employees transparent. Knowledge is power, becoming a thing of the past.
Because everyone can easily obtain a large amount of information at the same time, the traditional business methods of enterprises will inevitably be affected, including the disintegration of middlemen, collective competition, virtual business communities, complete penetration of customers, dynamic prices, targeted products, and collaboration. Changes in business models such as markets and partner services have initially emerged. GE advocates e-commerce precisely to grasp and participate in these changes in a timely manner. Through changes in sellers (customers), buyers (suppliers), investment operations, and internal procedures, it continues to "make faster and better use of products". "Customer satisfaction" to maintain the leadership, thereby maintaining the vitality of corporate development and consolidating its leading position. This is also another tangible manifestation of GE's corporate spirit of viewing change as an opportunity. GE is still the best company in the world so far, and it is promoting the e-commerce revolution with the greatest enthusiasm. This not only determines the future fate of this century-old giant, but will also have a profound global impact. Internet Weekly, the most famous Internet and information technology magazine in the United States, conducted a survey on major American companies for the first time with the theme of "Internet Weekly Top 100" and selected the leading e-commerce companies in 10 major industrial fields. GE was named "E-Commerce Company of the Year" in 2000. 3. GE’s electronic procurement system GE actively promotes the strategic transformation into an e-commerce enterprise and has achieved very obvious benefits. The following only takes the situation after the lighting engineering group under GE (note: the group's business was merged into GE Energy Group after January 2004) adopted an Internet-based electronic procurement system as an example: GE's raw material costs between 1982 and 1992 increased by 16, while prices during the same period remained unchanged or even began to decline. In order to offset the adverse factors caused by rising costs, GE went all out to improve its procurement methods. After analyzing the procurement process, it was found that the procurement methods were inefficient and had too many intermediate transactions. Because the data on the order, receipt, and delivery note do not match, more than 1/4 of the delivery notes need to be filled out again. GE Lighting Engineering Group used to send inquiry requests to the company's purchasing department for many low-priced mechanical parts every day. The purchasing department sends hundreds or thousands of inquiries to partners every day to obtain the lowest raw material prices. In the past, manual procurement procedures were as follows: for each inquiry application, the purchasing department had to attach a design drawing to each inquiry application; the design drawing had to be retrieved from the company's technical data files, taken to the copy room, copied, and folded. Then put it into the envelope and send it together with the inquiry application. The process takes 7 days to complete and is very complex and time-consuming. Due to cumbersome procedures and tight time constraints, the company's purchasing department usually only sends bidding documents to two or three suppliers at a time. Since GE launched its first online purchasing system (TPN Post) in 1996, the purchasing process has become simpler and faster. Today's electronic procurement practice of GE Lighting Engineering Group is to issue an electronic inquiry request to the purchasing department via email, and the purchasing department issues bidding documents to global suppliers through the Internet. The system automatically retrieves accurate design drawings and automatically attaches the correct diagrams and attachments to the electronic inquiry form. Within two hours after the procurement department starts processing the procurement process, suppliers around the world will receive the inquiry form by email, fax or EDI, and have 7 days to prepare the bid and send the bid document back through the Internet , GE can complete the bid evaluation work the same day it receives the bid, and finally select the winning bidder. After the Lighting Engineering Group implemented an online procurement system (TPN), it gained a series of benefits: The online procurement system freed up and rearranged 60 of the company's procurement personnel. The purchasing department is freed from a large amount of paper, copying and mailing work, and can free up at least 6 to 8 extra days per month to focus on development strategy issues. Due to the ability to connect with a wider range of suppliers online, labor costs in procurement have been saved by 30%, and raw material costs have also dropped by 50% to 20%. In the past, it usually took 18 to 23 days to identify suppliers, prepare bid requests, negotiate prices with suppliers, and sign contracts. Now it only takes 9 to 11 days. The transaction process is conducted electronically from start to finish, and receipts are automatically aligned with purchase orders, reflecting all changes that occurred throughout the process. Purchasing departments around the world exchange information about the best suppliers.
In February 1997, GE Lighting Engineering Group discovered seven new suppliers through the Internet, one of which quoted a price that was even 20 lower than the other. GE estimates that a comprehensive shift in procurement alone could save the company between $500 million and $700 million annually.