Question: please respond to the following discussion post gm entered the...
Please respond to the following discussion post:
GM entered the Chinese market for several reasons. One being that the market was tiny but experiencing rapid economic growth. 1 billion potential car owners is a pretty big deal. The other reason they joined with SAIC is the fact that they couldn’t actually break through the market without SAIC. GM did not have the connections or knowledge in addition to the Chinese government making it impossible for foreigners to break in to the market. The venture also resulted in establishing the Pan-Asian Technical Automotive center, which designed cars for other Asian markets. I think a risk that the chapter mentions about joint ventures is that it can lead to a fight for control between the firms if their goals changes. The text says that If the joint venture is of different nationalities (GM being American, SAIC being Chinese), they often end in dissolution of the venture (Hill, pg 459). I think that the venture is successful because they were moderately aggressive in the investment while other companies were more cautious. They also got to the market before a lot of other companies. If there is anything that I have learned through school and Shark Tank, it’s that you want to invest early. The other reason is that they designed vehicles for the Chinese lifestyle as opposed to bringing the American lifestyle to the Chinese. Large monster trucks and SUVs don’t work for the Chinese market, so they built a van that was lighter and cheaper but still effective.