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Globalization at General ElectricChapter 1 p.g:36
Why do you think GE has invested so aggressively in foreign expansion? What opportunities is it trying to exploit?
GE has invested aggressively in Globalization because the company has realised there is much more than shipping products in foreign countries. The need to invest in globalization to GE is made simpler by remaining committed to guaranteeing that the capabilities and relationships in the market where one needs to succeed are strong enough for the company to invest.
With this offensive investment, the company’s CEO, realised that the European Economy had a weak point in the year 1989 to 1995 which he took advantage of and invested about $17.5 billion in European market. With these amounts, half went to the acquisition of 50 new companies.
What is GE trying to achieve by moving some of the headquarters of its global business to foreign locations? How might such moves benefit the company? Do these moves benefit the United States?
In acquiring globalisation in Latin America, the unpredictability of the economy worsened during the collapse of Mexican Peso. This made GE gain increased advantage to buy even more companies. In 1997 and 1998, Asia went in to an economic crisis with the currency going into turmoil. This made it easy for GE to acquire opportunities in Japan and other Asian countries. In the end, the company was in a position to attain 40% of its revenues from global sales with an up to 20% increase from 1985. Increasing sales, increasing market share, reduction of budgets and acquiring economy of scale are some reasons why GE went global.
In moving some of the headquarters from United States, GE is trying to escape the sluggish domestic spending in US hence turning more of their focus in overseas to get hold of the increasing demand for its products. The current state of the US economy is uncertain making it worth the while for multinationals to shift some of their headquarters to other... Read Full Essay
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