McGraw-Hill© 2000 The McGraw-Hill Companies 1 S M General Electric Medical Systems

McGraw-Hill© 2000 The McGraw-Hill Companies 2 S M GE Medical Systems: Case Objectives To explore the role of services in a manufacturing context To analyze the effectiveness of GE Medical Systems TiP strategies To understand the pros and cons of bundling and unbundling services and manufactured products To appreciate the challenges and issues in going from a free to fee-based pricing system To understand the tradeoffs in moving a service organization from a cost center to having profit and loss responsibility

McGraw-Hill© 2000 The McGraw-Hill Companies 3 S M Customer Roles in Service Delivery Customer Roles in Service Delivery Productive Resources Contributors to Quality and Satisfaction Competitors

McGraw-Hill© 2000 The McGraw-Hill Companies 4 S M Characteristics of an Effective Service Guarantee Source: Christopher W.L. Hart, “The Power of Unconditional Guarantees,” Harvard Business Review, July-August, 1988, pp

McGraw-Hill© 2000 The McGraw-Hill Companies 5 S M Learnings from GE Readings and GEMS Case Strategic shift at GE to go deeper into services (this is true for many large manufacturers) Implementation of this shift is clearly seen in GE Medical Systems Services in this type of context can encompass: –“break and fix” services including remote system –diagnostics –value-added services like asset management and equipment utilization –customer training and education –consulting on data integration, usage, strategy Importance of understanding what the customer really wants, and customizing offerings to fit Importance of managing customer expectations and defining value from their perspective (e.g. free vs. fee)

McGraw-Hill© 2000 The McGraw-Hill Companies 6 S M A “well-trained customer is a happy customer” Customer education is an ongoing process, occurring throughout the life cycle of the product and the customer Customer needs for education go far beyond technical product application knowledge Technology enables numerous cost-effective delivery alternatives Learnings from GE Readings and GEMS Case (Cont’d)