Luquitas

Name: Lucas Mascarenhas
Student ID: 1294208

MTY.NI3010.2.1113.32782: Administración estratégica internacional (Ago 11 Gpo 2)

1 Analyzing an MNE's Strategic Move

In December of 2009, General Electric, an American multinational conglomerate founded by Thomas Edison, officially announced the sale of 51% of their assets of NBC, a radio and television broadcasting network to COMCAST, a cableoperator, home internet service provider and telephone company.

Intuiting to analyze the strategies in action by General Electric, its indispensable to know about this MNE activities worldwide.

General Electric general data and global activities:

GE produces large-scale industrial products, and in a smaller proportion, it provides services.
General Electric operates in six differentsegments:

GE Technology Infrastructure: Produces technology for transportation infrastructure, mostly parts of commercial and military aircraft’s (GE Aviation), engines and other parts for locomotives and marine (GE Water).

GE Healthcare: Offers healthcare and another medical services and goods. Its also a part of GE Technology Infrastructure, working with more independence.

GE EnergyInfrastructure: This segment produces equipment for electric companies, such a gas turbines, generators, and steam turbine. GE Oil and Gas, an emerging GE industry is also included in this segment.

GE Capital: It groups all the GE financial services. All the financial services offers loans and leases for clients. GE Money provides banking and credit services (it also suffered divestiture in the 2008recession) , GE Commercial Finance services the healthcare industries, transportation, civil construction, manufacturing and telecommunications.

GE Consumer and Industrial: It produces home appliances, lighting and industrial equipment. GE Enterprise Solutions is a part of this segment, it offers security systems and services needed by industries.

And there was the GE owned NBC Universal,the object of study: NBC Universal is one of the majors radio-television networks in the US. It includes cable channels such as USA, CNBC, ScFi Chanel, UniHD, Bravo, Sundance Channel, Oxygen and many others which they have a partnership as affiliates all over the world (203 affiliates). In December 2009 GE sold to COMCAST a 51% stake in NBC Universal assets.

With this diversification of productsand services GE total assets are over US$ 750,000 billion, employing more than 300,000 people in more than 100 countries in the world. In 2010, GE was ranked by Forbes the world second largest company in the world1

In the other hand COMCAST is the fourth largest American cable operator (TV, internet, telephone), employing 102,000 people and having Us$ 118.584 in total assets.

GeneralElectric NBC Divestiture Strategy Analysis:

A sizable company like GE, can take advantages of it high-level diversification and acquiring/selling (divestiture strategies) companies in good market opportunities. The divestiture strategy was chose by GE in the context of the 2008 crisis, that had a huge effect on GE's service business (mostly the financial ones) and the company was doing thatbecause of three reasons: NBC poor performance, to become lees diverse and to raise capital for other investments.

GE did the divestiture because them were trying to do an retrenchment strategy to rid the company of a poor performance that not fit well with the firm's other activities, and to raise money to invest in their main business, becoming less diversified.i

GE was operating NBC with apoor performance, mostly because of the new lack in the advertising business opened by YouTube and other internet enterprises. Through nine months of 2009, NBC's sales and profit have declined 11 percent and 27 percent, respectively2

The GE managers were also trying to become less diverse, to invest more and give priority to the manufacturing area. General Electric after the crises took a new...