Question

GE is know as a diversified conglomerate, operating in a number of different industries, including Power, Aviation, Healthcare, Transportation, etc. In 2016 GE sold its Appliances division to Haier. From GE's perspective, this is an example of a _______ strategy, and it is also an example of a ______ strategy decision.

Answer 1

GE's sale of its Appliances division to Haier in 2016 is an example of a divestiture strategy and also represents a conglomerate strategy decision. It reflects GE's effort to focus on its core operations and manage its diverse business portfolio by exiting from markets where it may have a less strong presence.

Step-by-step explanation:

From General Electric's (GE) perspective, selling its Appliances division to Haier in 2016 can be considered an example of a divestiture strategy. Divestiture involves a company selling or liquidating a portion of its business or a subsidiary.

This move is often made to focus on the core competencies of a business, raise capital, or as a strategic maneuver to exit an underperforming or non-core business segment. In addition, this can also be seen as an example of a conglomerate strategy decision.

Conglomerate strategy involves managing a portfolio of businesses that operate in diverse industry sectors, which allows the parent company to spread risk and leverage synergies among the varied businesses. By selling this division, GE was effectively streamlining its operations and perhaps refocusing on those areas where it has stronger business offerings such as Power, Aviation, Healthcare, and Transportation.