In their heyday, when the auto companies of Detr
oit ruled the world, their financial services arms were the talk of Motown. The finance arms not only extended credit to eager consumers out to buy their cars, they also made even more money for General Motors and Ford Motors through assorted activities like asset management, strategic equity investment and dabbling in markets. Once and out and out manufacturing giant, General Electric appeared to have aped a fashionable trend when it launched a financial services subsidiary. Today, it is a multi-billion dollar enterprise of its own, one of the most profitable divisions of General Electric and handles more than 130 million customers every year. No wonder, the other 800 pound Gorilla of America Inc, Wal-Mart too decided that retail alone is not enough to be a global leader; it has to be in the business of money, credit cards et al. In fact, the entire banking and consumer finance industry in the United States was up in arms when Wal-Mart expressed a desire to get into consumer banking and finance. Potential rivals felt that Wal-Mart’s financial services arm could well crush competition the way the behemoth had crushed competition in the retail sector in the US.
For Complete IIPM Article, Click on IIPM Article
oit ruled the world, their financial services arms were the talk of Motown. The finance arms not only extended credit to eager consumers out to buy their cars, they also made even more money for General Motors and Ford Motors through assorted activities like asset management, strategic equity investment and dabbling in markets. Once and out and out manufacturing giant, General Electric appeared to have aped a fashionable trend when it launched a financial services subsidiary. Today, it is a multi-billion dollar enterprise of its own, one of the most profitable divisions of General Electric and handles more than 130 million customers every year. No wonder, the other 800 pound Gorilla of America Inc, Wal-Mart too decided that retail alone is not enough to be a global leader; it has to be in the business of money, credit cards et al. In fact, the entire banking and consumer finance industry in the United States was up in arms when Wal-Mart expressed a desire to get into consumer banking and finance. Potential rivals felt that Wal-Mart’s financial services arm could well crush competition the way the behemoth had crushed competition in the retail sector in the US.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2007
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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