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