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General Electric and International Involvement

General Electric and International Involvement GE Product Divisions : Light bulbs Aircraft engines Appliances Power-generation GE Market Opportunity : North America Europe Pacific rim / Asia Emerging markets GE’s Markets, Entry and Strategy Choices 4 3 Product Lines 2  1 

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General Electric and International Involvement

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  1. General Electric and International Involvement • GE Product Divisions: • Light bulbs • Aircraft engines • Appliances • Power-generation • GE Market Opportunity: • North America • Europe • Pacific rim / Asia • Emerging markets

  2. GE’s Markets, Entry and Strategy Choices 4 3 Product Lines 2  1  International Strategy A B C D Country-Markets

  3. Entry Mode Decision Matrix Hi Strategic Importance of Country Lo Hi Resources, Control, Risk Lo Lo Hi Stand-alone Attractiveness of Country

  4. Foreign Market Entry Modes • Export • Licensing • Joint Venture • WOS • Acquisition • Greenfield

  5. Entry Mode Framework • Mindset • Country-market opportunity/cost analysis • Stand-alone Attractiveness • Strategic Importance • Resources-Control-Risk tradeoff

  6. Mindset and International Activity • International • Overseas activities support / subordinate to domestic activities • Multinational • Flexibly adapting value-creating activities on country-by-country basis; nationally-responsive • Global • The world is the market; standardization • Transnational • “Glocalization” – Some value-creating activities standardized/globalized, others localized

  7. Country-Market Analysis • Stand-alone attractiveness: • Size • Growth • Product acceptance / segmentation • Cultural similarity • Risk • Policy incentives • Other factors? ….MNC “power”?

  8. Country-Market Analysis • Strategic importance: • Home market of global customer • Home market of global rivals • Significant market of global rivals • Major source of innovation • Demanding/sophisticated customers • Factor-cost advantages

  9. Resources-Control-Risks • Resources • $$, time, technology, machinery, people, organizational, strategy • Control • Operational and strategic discretion over value-creating activities • Risks • Political, F/X, economic, cultural, dissemination

  10. Control • Extent of involvement: Ship Product Distribution After-sales Support Marketing • Channel control / ownership: Retail Local Whsle. Regional Whsle. Import Agent Export Agent Mfg.

  11. Entry Mode Decision Framework ControlResourcesRiskDissem. Low Low Low High Licensing Exporting Intermediaries Direct Joint Venture Wholly-owned Subsidiary High High High Low

  12. Entry Mode Decision Matrix Hi Strategic Importance of Country Lo Hi Resources, Control, Risk Lo Lo Hi Stand-alone Attractiveness of Country

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