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International Business 8th Edition by Charles Hill
Edition 8ISBN: 978-0078137198International Business 8th Edition by Charles Hill
Edition 8ISBN: 978-0078137198 Exercise 1
Why do you think GE has invested so aggressively in foreign expansion What opportunities is it trying to exploit
Explanation
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Verified
GE has a goal of being either the largest or second largest participant in every business in which it is involved. So, to achieve this, GE has bought up a large number of companies across the world. By combining similar companies within a certain sector such as jet engines, GE forms a larger unit, which can have competitive advantages when competing with smaller units. By being involved in so many areas, GE remains insulated from company specific risk. Also, GE can move cash from well performing areas of its conglomerate to areas that have potential future revenues. Due to these advantages, GE's management hopes to perform above the market, earning money for its shareholders and management.
By investing in parts of the world, which are undergoing economic downturn, GE hopes to buy companies, whose total stock price is worth less.
By investing in parts of the world, which are undergoing economic downturn, GE hopes to buy companies, whose total stock price is worth less.
International Business 8th Edition by Charles Hill
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