General Electric and International Involvement
GE Product Divisions:– Light bulbs– Aircraft engines– Appliances– Power-generation
GE Market Opportunity:– North America– Europe– Pacific rim / Asia– Emerging markets
GE’s Markets, Entry and Strategy ChoicesP
rodu
ct L
ines
Pro
duct
Lin
es
Country-MarketsCountry-Markets Internatio
nal
Internatio
nal
Strateg
y
Strateg
y
4
3
2
1
A B C D
Entry Mode Decision Matrix
Hi
Lo
HiLo
Str
ateg
ic I
mpo
rtan
ce
Str
ateg
ic I
mpo
rtan
ce
of C
ount
ryof
Cou
ntry
Stand-alone AttractivenessStand-alone Attractivenessof Countryof Country
Lo
Hi
Resource
s,
Resource
s,
Control,
Control,
RiskRisk
Foreign Market Entry Modes
ExportLicensingJoint VentureWOS
–Acquisition
–Greenfield
Entry Mode Framework
MindsetCountry-market opportunity/cost analysis
– Stand-alone Attractiveness
– Strategic ImportanceResources-Control-Risk tradeoff
Mindset and International Activity International
– Overseas activities support / subordinate to domestic activities
Multinational– Flexibly adapting value-creating activities on
country-by-country basis; nationally-responsive
Global– The world is the market; standardization
Transnational– “Glocalization” – Some value-creating activities
standardized/globalized, others localized
Country-Market AnalysisStand-alone attractiveness:
– Size
– Growth
– Product acceptance / segmentation
– Cultural similarity
– Risk
– Policy incentives
– Other factors? ….MNC “power”?
Country-Market AnalysisStrategic importance:
– Home market of global customer
– Home market of global rivals
– Significant market of global rivals
– Major source of innovation
– Demanding/sophisticated customers
– Factor-cost advantages
Resources-Control-RisksResources
– $$, time, technology, machinery, people, organizational, strategy
Control– Operational and strategic discretion over
value-creating activitiesRisks
– Political, F/X, economic, cultural, dissemination
Control Extent of involvement:
Channel control / ownership:
Ship Product
Marketing
Distribution
After-salesSupport
Mfg.
ExportAgent
ImportAgent
RegionalWhsle.
LocalWhsle.
Retail
Entry Mode Decision Framework
Licensing
Exporting Intermediaries
Direct
Joint Venture
Wholly-owned Subsidiary
ControlControl ResourcesResources RiskRisk Dissem. LowLow LowLowLowLow
HighHigh HighHighHighHigh Low
High
Entry Mode Decision Matrix
Hi
Lo
HiLo
Str
ateg
ic I
mpo
rtan
ce
Str
ateg
ic I
mpo
rtan
ce
of C
ount
ryof
Cou
ntry
Stand-alone AttractivenessStand-alone Attractivenessof Countryof Country
Lo
Hi
Resource
s,
Resource
s,
Control,
Control,
RiskRisk