Essay about GE's joint venture case

Joint ventures (JV) are a popular method of foreign market entry because they theoretically provide a way to join complementary skills and know-how, as well as a way for the foreign firm to gain an insider’s perspective on the foreign market. Since China began its market opening in 1978, joint ventures have been the most commonly used form of foreign direct investment (FDI), with about 70% of FDI in China in the 1980s and 1990s taking the form of joint ventures (Qui, 2005, p. 47). The Chinese company, as well as the foreign investor, has since 1978 been drawn to the joint venture form. Walsh, Wang & Xin (1999) note that from the Chinese

The business that I chose to research is General Electric. GE is one of the oldest and largest businesses in the United States. They are ranked #26 largest firm in the U.S and the 14th most profitable. GE is a massive, diversified and profitable conglomerate with a lot of very good but unrelated businesses. GE has expanded to incorporate television, airplane engines, medical devices, household appliances and commercial financing. Analyzing GE’s business-level strategy is somewhat difficult being that GE has so many different divisions. Any of these products would serve as a large and viable business on its own but

GE takes different modes of entry in to foreign markets, depending on the market and the competitive environment. Their approach is tailored based on the market and they have taken the right approach more times than not. GE is so adept at analyzing new markets their strategy for such analysis has become something of a business standard. The General Electric/McKinsey

Strategic alliance “combine key resources, cost, risk, technology and people” (Williams, 2010). One of the common denominators of strategic alliance is having a joint venture. This is “when two existing companies collaborate to form a third company. The two founding companies remain intact and unchanged except that together they now own the newly created joint venture” (Williams, 2010). Having a joint venture there are many benefits and risk with global marketing. “For a global model to work, global teams need to develop an understanding of local markets and establish a close relationship with local marketing teams” (Griffith, 2012). There are recommendations that should be followed in order to complete strategic planning and commit to the company perspective and

A joint venture is characterised by the need to achieve a business transaction while remaining separate from each other. Each firm maintains its resources and independence while engaging in an activity, with the objective of achieving certain objectives. The need for joint ventures in the Pharmaceutical industry may be characterised by the need to reduce high R&D costs and by so doing, share costs through common equity (Roijakkers&Hagedoon,2005, p.8). Joint venture as a mode of market entry may

This academic paper will be exploring the key term, joint ventures. This concept is of interest because in today’s business environment due to the economy downfall, many organizations recourse to this strategy in order to easily infiltrate in a foreign market. Companies are seeking more opportunities to expand their market share and a joint venture is an attractive option to do so. Getting involved with a foreign market come with several obstacles and challenges. It is for the same reason that organizations engage in a joint venture whit a partner that knows and understand the culture and preferences of that specific nation.

Also; Citigroup, Inc. another competitor for the GE Company made a total of $64.95 billion in 2011, and when we compare it with GE and SI its earnings where even less in the same year, making General Electric a leader in the industry. With this valuable information GE management can analyze its competitor’s financial statements results and from there they can evaluate their faults and create new ways to increase their annuals earnings and secure their place as one of leading companies in their industry. Another way GE can go forward in the industry is by adapting its services and products to other countries that need them.

Market entry strategy involves the essential requirement for a company to get into international level. The need of involving other companies whereby two companies join together is referred to as joint venture entry. They get into a similar market and make the same production with the aim of sharing risk and at the same time they share the profit according to their terms of agreement (Kretzberg, 2007). Therefore, Lincoln Electric Company has a chance to join with other company to venture in the Indian market.

This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future?

General Electric’s lack of knowledge within foreign markets, because it is unfamiliar with the territory and the business structure, is decreased when the company uses a joint venture. The use of a joint venture in this case decreases the financial and economic risk by not putting so much pressure on General Electric if the company isn’t as successful as General Electric would hope that it could be. A joint venture can be the easiest option when entering into a new market because it allows General Electric to join forces with a company that is already established within the foreign market that General Electric is trying to enter, bringing some knowledge and experience of the foreign market to the table. I think that the global economic crisis of 2008-2009 does have an impact on General Electric’s preference to use joint ventures instead of continuing to use acquisitions or greenfield ventures. The global economic crisis of 2008-2009 may have been an eye opener for General Electric making the company realize that at any point in time the companies that General Electric have put so much time and money into can run into financial problems that could potentially destroy General Electric altogether. Had General Electric

GE's strategic thrusts are those parts of the strategy that allowed the company to deal with changes more effectively. This meant that there was a focus on a number of areas in achieving these objectives to include: transforming the culture, selling off unprofitable business, working on developing effective leadership and focusing on businesses that can diversify profit margins. The combination of these different elements is important, because they help to give the company direction and focus. In many ways, one could argue that this is what made GE one of the most respected firms prior to Jack Welch's departure. ("GE," 2012) (Bartlett, 2005) (Welch, 2007)

number one or two in its industry--in the United States, and later in the world as a

Analysis - GE has likely been so successful over the years because of its ability to foresee major trends and capitalize upon them. In the 1960s, for instance, GE was one of the eight major computer companies. Even recently, since 1986, GE has continued to acquire several organizations; portions of NBC, wind manufacturing, universe pictures, aerospace industries, international firms, software and hardware manufacturing, even oil companies abroad. The company culture describes itself as not one company, but many each unit a vast and complex enterprise in and of itself, with a corporate

Doing these acquisitions at some certain stages were important to diversify GE technologies and maximize its market share (Immelt, 2005), however, the balancing between growing organically by empowering the company from within and acquiring some companies is even more important for setting up the company directions. Since more than half of the company revenue is derived from its financial services (Company Data 2008), this brings the argument onto the table about the nature of the company making it a financial company with a manufacturing arm.

Joint ventures have further benefits. Joint ventures are based on sharing individual ability and resources for the purpose of achieving a mutually beneficial objective. Sony gains access to Ericsson’s market share and their network of infrastructure and handset technology. Ericsson can acquire Sony's experience on consumer electronics, fashionable designs and production processes. Hence, the joint venture overcomes Sony's low market share and strengthens Ericsson's ability of research and product development. Thus joint ventures resolve the opportunism issue with OEM, licensing and franchising.