In its attempts at expansion and exertion of greater influence onto its target market, GE has acquired several companies to establish a better presence in its market. Baker Hughes and Ship Express are the largest acquisitions that GE has made in the past few years (Rahadjeng, 2018). The acquisition of Baker Hughes was a necessary step given the rise of the e-market’s influence (Canpanelli, 2016). Baker Hughes, in its turn, has helped GE to enter the digital market safely and become a part of it comparatively fast (Canpanelli, 2016). ShipXpress, GE’s earlier acquisition, was also an important strategic move since it led to the increase in the firm’s supply chain opportunities (“GE acquires ShipXpress to expand digital rail offerings,” 2016). Thus, with the two acquisitions mentioned above, GE has managed to address some of the challenges that it has been facing in the global energy market.
Although the acquisitions mentioned above are quite different in their nature, the reasoning behind each is quite similar for GE. The main reasons for GE to acquire ShipXpress concerned the opportunities for improving the speed of communication and information management across its supply chain (“GE acquires ShipXpress to expand digital rail offerings,” 2016). Indeed, by the time that GE started considering acquiring the company, ShipXpress had already created a rather strong reputation for itself in the global market, having built a unique and very impressive supply chain. Therefore, the rationale behind the acquisition of ShipXpress was the necessity to expand into the e-market and incorporate innovative tools into GE’s system of managing its operations and relationships with its customers. The fact that most competitors of GE had already established innovation-based supply chains also enhanced the transition from the traditional approach toward managing the company’s functions to the use of electronic tools (Gaustad, Krystofik, Bustamante, & Badami, 2018). Thus, GE gained enough momentum in the target market to shape its supply chain and adapt to the new requirements.
Baker Hughes, in turn, had a firmly established framework for navigating the digital market, which GE could not boast of at the time, hence the decision to acquire the organization and establish a presence in the online economy (Canpanelli, 2016). Therefore, both acquisitions were reasonable given the change in the market trends and provided GE with new opportunities in the power generation industry. In addition, the support of Baker Hughes implied additional educational opportunities for employees since Baker Hughes also contained a plethora of training courses and seminars that could help in building a vast range of competencies for staff members to acquire (“Program details,” n.d.). Given the lack of focus on talent management at GE and the increasing necessity to promote employee engagement by offering people opportunities for professional growth, it was vital for GE to agree to the acquisition and include Baker Hughes into the range of its partners (Canpanelli, 2016). As a result, GE gained a chance to improve its HRM techniques and focus on building a team of professionals with a high range of competencies and skills.
Despite the apparent advantages of the acquisitions described above, GE had to face numerous challenges when acquiring ShipXpress and Baker Hughes. The inconsistency in the perspectives of GE and ShipXpress was one of those difficulties that jeopardized the management of the acquisition process. Although both organizations were geared toward innovative solutions and expansion as the men of embracing a wider spectrum of customers, the focus on enhancing the strength of the industry., which ShipXpress promoted, was not quite in line with GE’s idea of attaining excellence and embracing every opportunity (“GE acquires ShipXpress to expand digital rail offerings,” 2016). Similarly, there were some frictions between GE and Baker Hughes during the acquisition process due to the differences in the organizations’ goals (Canpanelli, 2016). For example, although both companies viewed the concepts of integrity and responsibility as the main pillars of decision-making, Baker Hughes seems to have been focusing on innovation to a much lesser degree than GE (Rahadjeng, 2018). Nevertheless, the companies reconciled their differences, which made further acquisition possible (Canpanelli, 2016). By creating a shared system of values, GE and Baker Hughes built the foundation on which their cooperation and communication channels could be built.
Overall, the analysis of GE’s recent acquisitions has shown that it is important to target continuous development and seek support from other organizations to provide mutual assistance and collaborate in the global economy. In addition, the analysis of GE’s acquisitions has proven that the decision to acquire other organizations has to be based on profound and meticulous research. Thus, an organization that acquires a firm can ensure that the outcomes of the specified transaction will lead to eventual success and that the expenses taken to acquire a company and align the processes of each firm with each other will eventually be justified. In addition, the assessment of GE’s experiences in acquiring other organizations has shown that acquisition can be a tool for increasing the performance of staff members by offering them knowledge-sharing opportunities and prompting collaboration among them.
References
Canpanelli, D. (2016). GE buys supply chain software company ShipXpress. transportation. Web.
Gaustad, G., Krystofik, M., Bustamante, M., & Badami, K. (2018). Circular economy strategies for mitigating critical material supply issues. Resources, Conservation and Recycling, 135, 24-33.
GE acquires ShipXpress to expand digital rail offerings. (2016). Web.
Program details. (n.d.). Web.
Rahadjeng, P. A. (2018). Firm evaluation: A case study on the acquisition of Baker Hughes by General Electric. Bulaksumur: Universitas Gadjah Mada.