Essay about General Electric
General Electric can afford this venture if it sells well enough early to overcome the initial investment. In order to successfully do this 400 aircraft would have to be sold within the first seven or eight years of productions, allowing the company to break even on its investment. Once the company can break even, then it can be put in a position to turn a good profit.
They would also lose or face diminished relationships with those that could provide valuable resources to GE and its other divisions.
At the current time, I feel that the UDF project is a logical venture to pursue for General Electric. If General Electric launches the new UDF engine design, then they would immediately move to the front of the pack in terms of leading the industry as an innovator. At the current time, Pratt and Whitney, the Allison Division of General Motors, and Rolls Royce are all engaged in some type of development of the UDF engine. However, these companies all have entirely too much on their current plate and are very skeptical about launching the new engine design due to an uncertainty in it feasibility and acceptance into the market. Because of these potential threats, these companies (GE’s direct competitors) have put these ventures on hold, giving them little attention. If General Electric and its AEBG go full blast with the UDF project, they will be the first in the industry to do so. This will allow them to be the innovator of the future of aircraft engine design. General Electric is already has major leadership in the commercial jet engine market, and the implementation of the new technology will help only increase its momentum in this area. The executives at General Electric are also very aware that any hesitation in the development of the UDF engine will allow their competitors to take the reins and become the market leader in this area if they choose to do so. Since the development of the UDF engine will produce a major benefit of greater fuel efficiency, it is only a matter of time before commercial airlines are requesting such technology. With the information they have, it would not make much sense to sit back and allow one of their competitors to take control of this particular segment. Then General Electric would spend the majority of their time trying to come up with ways to play catch up and make sure they did not lose the high percent of the market they already have. The General Electric executives are also very aware that if they move forward with the UDF concept, then one of their competitors will be able to bring their own UDF type engine to the market within twenty-four to thirty months of GE’s first shipment. The down side to this is that it would be GE spending all the money in research and development, and then one of the competitors will be able to purchase one, strip it down, and replicate one for much cheaper. In order to prevent this, General Electric needs to make sure that the patents it has for their design are good enough that the bulk of their concept cannot be replicated. If they make sure that their design stays theirs, then they will be able to put the UDF on the market and still remain the market leader even if their competitors come up with their own version. Pursuing the UDF project at the current time would also allow General Electric to establish great relationships with companies they supply. They would be able to establish great relationships with new companies as well as expand on the ones that they already have. GE also has the opportunity to gain entrance into the UDF market by simply upgrading one of the engines it already has in place. If they were to do this, they would receive up to $1 million from the government for funding for the development. This gives them 2 avenues to take in order to implement the new UDF engine. Once more analysis is done, I think that it will be clear which route they should take, and they will be able to move forward and become the leader in new aircraft engine technology.