Essay about GE's joint venture case

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General Electric’s Joint Ventures
General Electric (GE) formerly entered a foreign market by either acquiring an established firm or establishing a greenfield subsidiary (which is a wholly owned from ground up turnkey project). Joint ventures with a local company were almost never considered. The prevailing philosophy was that without full control, the company didn’t do the deal. However, times have changed. Since the early 2000s joint ventures have become one of the most powerful strategic tools in GE’s arsenal. To enter the South Korean market, for example, GE Money, the retail lending arm of GE’s financial services business, formed joint ventures with Hyundai to offer auto loans, mortgages, and credit cards. GE has a 43 percent stake
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Finally under the leadership of CEO Jeffrey Immelt, GE has adopted aggressive growth goals, and it believes that entering via joint ventures into nations where it lacks a presence is the only way of attaining these goals. Fueled by the large number of joint ventures, GE has rapidly expanded its international presence over the past decade. For the first time, in 2007 the company derived the majority of its revenues from foreign operations.

Of course, General Electric has done joint ventures in the past. It has a long standing 50/50 joint venture with the French company Snecma to make engines for commercial jet aircraft, another with Fanuc of Japan to make controls for electric equipment, and third with Sea Containers of United Kingdom, which has become one of the world’s largest companies leasing shipping containers. But all these ventures came about only after GE has explored other ways to gain access to particular markets or technology. Once the last option for GE, establishing joint ventures is now often the preferred entry strategy.

GE managers also note there is no shortage of partners willing to enter into a joint venture with the company. The company has a well-earned reputation for being a good partner. GE is also well known for its innovative management techniques and excellent management development programs. Many partners are happy to team up with GE to get access to this know-how. The knowledge flow goes
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