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General Electric's Joint Ventures

General Electric's change in strategy. For years, General Electric entered new markets using wholly owned operations that it built from the ground up. Today however, the company has moved to a joint venture approach. The following questions can be helpful in directing the discussion.

1. GE used to have a preference for acquisitions or greenfield ventures as an entry mode, rather than joint ventures. Why do you think this was the case?

2. Why do you think that GE has come to prefer joint ventures in recent years? Do you think that the global economic crisis of 2008-2009 might have impacted upon this preference in any way? If so, how?

3. What are the risks that GE must assume when it enters into a joint venture? Is there any way for GE to reduce these risks?

4. The case mentions that GE has a well-earned reputation for being a good partner. What are the likely benefits of this reputation to GE? If GE were to tarnish its reputation by, for example, opportunistically taking advantage of a partner, how might this impact the company going forward?

5. In addition to its reputation for being a good partner, what other assets do you think GE brings to the table that make it an attractive joint venture partner?

Solution Preview

1. I believe that GE utilizes acquisitions or greenfield entry ventures as an entry mode instead of joint ventures, due to the fact that these methods would provide GE with a means by which to gain a tremendous amount of control of the market within this industry, and or within a given area without having to share the profits with other companies, as it would in a joint venture. In addition, these methods would allow GE almost total decision-making power within the marketing area in which the acquisitions or Greenfield entry occurred, without having to share this decision-making power with a joint venture organization etc.

2. I think that GE has come to prefer joint ventures in recent years, due to the fact that it has found that the company assumes ...