Case study: General Electrics
Case Questions:
1) Why do you think GE has invested so aggressively in foreign expansion? What are the opportunities that it is trying to exploit?
General Electric (GE) established in 1879 was originally provided the electric power, providing single service. However, GE not only works on energy today, but also health and home, transportation, financial services and even television broadcasting, GE is now the largest industrial conglomerate in America. The reason to make such foreign expansion was forced from its goal, that to be number 1 or 2 globally in every business in which it participated.
Internal opportunities
As the saying goes, chances only favor the prepared minds, GE starts participate in different business in its early business, such as the formed of GE Commercial Finance in 1905, the acquisition of Ken-Rad Tube Manufacturing Corporation in 1952, the formed of MSNBC with partner Microsoft in 1996[1], etc.. The outstanding business achievement, building up GE’s potent background and powerful infrastructure. The increase of market share in different field, GE own more and more local companies in its home country America, in which provided GE a great capability to make such aggressive foreign investment strategy, to fulfill its company goal.
External opportunites
Opportunities seem to be within Jack Welch’s grasps, GE captures every advantage of the economic uncertainty to make acquisitions or capital injections. In the case mentioned “GE took advantage of economic weakness in Europe from 1989 to 1995 to invest $17.5 billion in the region, half of which was used to acquire some 50 companies. When the Mexican peso collapsed in value in 1995, GE took advantage of the economic uncertainty to purchase companies throughout Latin America. And when Asia slipped into a major economic crisis in 1997-1998 due to turmoil in the Asian currency markets, Welch urges his managers to view it as a buying opportunity. In Japan alone, GE spent $15 billion on
1) Why do you think GE has invested so aggressively in foreign expansion? What are the opportunities that it is trying to exploit?
General Electric (GE) established in 1879 was originally provided the electric power, providing single service. However, GE not only works on energy today, but also health and home, transportation, financial services and even television broadcasting, GE is now the largest industrial conglomerate in America. The reason to make such foreign expansion was forced from its goal, that to be number 1 or 2 globally in every business in which it participated.
Internal opportunities
As the saying goes, chances only favor the prepared minds, GE starts participate in different business in its early business, such as the formed of GE Commercial Finance in 1905, the acquisition of Ken-Rad Tube Manufacturing Corporation in 1952, the formed of MSNBC with partner Microsoft in 1996[1], etc.. The outstanding business achievement, building up GE’s potent background and powerful infrastructure. The increase of market share in different field, GE own more and more local companies in its home country America, in which provided GE a great capability to make such aggressive foreign investment strategy, to fulfill its company goal.
External opportunites
Opportunities seem to be within Jack Welch’s grasps, GE captures every advantage of the economic uncertainty to make acquisitions or capital injections. In the case mentioned “GE took advantage of economic weakness in Europe from 1989 to 1995 to invest $17.5 billion in the region, half of which was used to acquire some 50 companies. When the Mexican peso collapsed in value in 1995, GE took advantage of the economic uncertainty to purchase companies throughout Latin America. And when Asia slipped into a major economic crisis in 1997-1998 due to turmoil in the Asian currency markets, Welch urges his managers to view it as a buying opportunity. In Japan alone, GE spent $15 billion on
References: [2] Hill, Clares W L (2012), Internatioanl Business: An Asian Aspectives,,New York: McGraw-Hill, 80.