Assignment 6: GE Case Study



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Assignment 6: GE Case Study

Introduction

The external environmental factors are making number of multinational companies to think in global terms and thus adjust their global strategies accordingly. This assignment takes into account the case analysis of the globalization approach that has been taken by General Electric, a renowned international company.

Identification of key issues

General Electric (GE) enjoys the status of world's largest industrial company and is considered to be an icon of the American capitalism (Morrison, 2006). The company was not able to successfully penetrate in the foreign markets that had made the management realize to revise its global strategies. Thus, in order to deal with the issues being prevalent at the global level, company decided to make an aggressive investment for foreign expansion. The reason that can be attributed to the aggressive investment made by General Electrics in foreign expansion is that the company wanted to accomplish its main objective (to serve as number 1 or 2 organization all over the globe, enhancing the efficiency of all the business in which it is engaged) that is stated as per the organization's management. The economic condition of United States is uncertain so this situation required multinational companies to transfer some of their head offices to the countries that have some potential. The company wanted to escape from the lethargic domestic spending that is made by them in United States that will ultimately turn their focus towards overseas to grasp and better deal with the increasing demand of its products.

Problems and Opportunities

The opportunities that General Electric was trying to capitalize include the exploitation of the countries that were suffering from economic downturn. For Example, the Company used partial part of this investment in the acquisition of around 50 companies. In the context of Latin American downturn situation, when a value collapse was suffered by Mexican peso, General Electric makes purchase of the companies throughout Latin America. The economic crisis that were faced by the Asian currency markets during the year 1997 and 1998 made the company to make an investment of $15 billion on the purchase of companies only in Japan. Resultantly, by the termination of the Welch's tenure in the year 2001, the global sales of the company enhanced from 20 percent to approximately 40 percent.

Articulation and evaluation of an alternative approach

With an aim to move some of the headquarters of the company ...