Gems Case

1299 Words Aug 24th, 2015 6 Pages
General Electric medical systems, 2002

General Electric medical systems, 2002

Q 1. What is the underlying logic behind the global product idea? What are the costs and the benefits that are expected?

Answer- Global Electric Medical Systems (GEMS) had built a global presence on the backs of the Global Product Company (GPC) concept .This philosophy concentrated on manufacturing and then carry out activities anywhere in the world, where it could be carried out to GE’s Standards and cost effectively without compromising on quality.
Medical equipment are globally standardized product which don’t require to be tweaked or adapted to local market needs.

GEMS in terms of Adaptation, had invested heavily in country-based sales and
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However GPC concept was also accompanied by certain costs
Transferring the entire manufacturing setup and facility from a developed country to developing economies. Involved high setup costs. Offsetting the gains mentioned earlier were GPC-specific costs such as inventory, logistics, documentation and import-duty costs, could not rely on less experienced workforce in new locations hence the HQ and old location workforce had to make long trips from home to these new locations. Another such costs involved was developing a long term strategic relationship with local suppliers as well as seeking quality products from local suppliers was an issue as purchased parts weren’t low valued items and firm’s strategy was to maintain quality of the product.

2. Should the global product philosophy be changed or altered to suit the China market? Please identify both sides of the argument and take a position explaining the rationale behind your stand.
Answer- Chinese market is indeed a very promising market as it is third largest for medical diagnosis after U.S. and Japan and is fastest growing of the three. China is one of the low cost country and is GEMS’ Center of Excellence. But, the major question is that since GEMS has COE in China and China itself is a huge market should GEMS go for “In China for China” model or should it work as it is doing now?
Factors favouring alteration in GPC policy- * It has huge demand for low-end