General Electric (GE) is one of the most diversified and largest American corporations. It focuses on various products such as aircraft engines, electrical and electronic equipment, and financial services. GE Company was incorporated in 1892, and since then has acquired assets from different companies or corporations. The two most recent acquisitions are Baker Hughes and IQP Corporation.
GE is divided into three subsidiaries, including GE oil and gas, GE Power, and GE energy connections. In 2016, Baker Hughes was incorporated into GE Corporation by merging it with the GE oil and gas segment. The deal cost GE Corporation 30 billion dollars, which implied that GE had a 50.4 percent ownership of Hughes. In 2017, GE fully acquired the ownership of Baker Hughes, and in that year, the acquisition contributed to 5 billion dollars profit (Kumar, 2019). In the same year, GE agreed on the acquisition of IQP Corporation, which was estimated to be a 30-40 billion dollars deal. IQP was established in 2011, and its focus was to create a platform that would optimize the development of a favorable environment for application developers that do not primarily require the knowledge of coding to program their applications (Kumar, 2019). GE Company decided to acquire IQP Corporation to help create a platform for an easy-to-use interface to drive the faster adoption of the company’s Internet of Things (IoT) platform.
The need to create a platform for an easy-to-use interface to drive GE’s fast adoption of an IoT platform is one of the most significant reasons for the recent company’s acquisitions. The primary challenge or threat the company faced is stiff competition from other companies such as Siemens AG. Siemens AG is a well-known company across the world for its innovative initiatives or strategies to fulfill customers’ satisfaction. As such, GE decided to incorporate the IQP Corporation into the company. This initiative was to enable GE to develop as an innovative global leader by producing high-quality products that satisfied the customers’ demands. IQP brought along its knowledge and understanding of coding and enabled GE to create high-quality products that enabled it to maintain a competitive edge over other companies across the world. For instance, GE needs the knowledge to create and code various electronic and electrical devices.
GE intends to establish itself as the Industrial Internet of Things (IIoT) leader across the world. As such, it has decided to integrate IIoT into its activities to achieve its purpose that is to satisfy customers’ demands and maintain a competitive edge over other companies. IIoT is an integral element in the acquisition of Alstom and Baker Hughes deals. The Alstom deal is about creating cost synergies as a consequence, and the company’s consolidation. It is based on adding IIoT solutions to the Alstom steam power solutions to GE’s gas power offerings to create more powerful combined cycle solutions (Ocasio & Joseph, 2008). This implies that GE is buying effective opportunities to expand its industrial internet of things business. IIoT also proves to be integral in the Baker Hughes acquisition deal. In the deal, there are also cost synergies that need to be generated. The main objective is to integrate the Baker Hughes service technology solutions into GE’s oil and gas technology to create a fully integrated (Ocasio & Joseph, 2008). Thus, revenue synergies are expected to rise by 400 million dollars by 2020.
The two important key takeaways in GE’s research acquisitions are; GE makes technology that generates power through gas, oil, wind, and water, and GE intends to take leadership within the Industrial Internet of Things. Certainly, GE’s power is the largest segment within the company. GE integrates IIoT into its acquisitions to help it to create fully integrated solutions to generate power (Lamb & Didriksen, 2017). For instance, in the Baker Hughes deal, GE tries to integrate its oil and gas technology with the Baker service technology to generate sufficient power. Moreover, GE intends to take the leadership position in the IIoT platform (Lamb & Didriksen, 2017). Through the integration of diverse technologies such as that of Baker Hughes service technology, GE intends to expand its IIoT business across the world, and satisfy the customers’ demands. As such, it intends to maintain and sustain a competitive edge over other companies, such as Siemens’ AG, across the world.
From GE’s acquisitions research study, I have learned that technology is an integral element in developing more business opportunities and maintaining a competitive advantage over other companies. One of the strategic developments and implementation lessons I might apply is the need to integrate different forms of technology into my business. From GE’s acquisition research study, the company integrates different forms of technology to its activities to expand its IIoT business opportunities. For instance, in the Alstom deal, the company attempts to integrate the Alstom’s power solutions to GE’s gas power solutions to create more powerful combined-cycle energy that is required to satisfy the customers’ demands and contribute to the company’s revenue.
Kumar, B. R. (2019). Mergers and Acquisitions. In Wealth Creation in the World’s Largest Mergers and Acquisitions (pp. 1-15). Springer, Cham Retrieved from http://dlib.scu.ac.ir/bitstream/Hannan/559998/1/9783030023621.pdf
Lamb, W. S., & Didriksen, M. (2017). Electric and Gas Utility Mergers and Acquisitions: Trends in Deal Terms, Contract Provisions, and Regulatory Matters. Energy LJ, 38, 133. Retrieved from https://heinonline.org/HOL/LandingPage?handle=hein.journals/energy38&div=14&id=&page=
Ocasio, W., & Joseph, J. (2008). Rise and Fall-Or Transformation? The Evolution of Strategic Planning at The General Electric Company, 1940–2006. Long Range Planning, 41(3), 248-272. Retrieved from https://pdfs.semanticscholar.org/99de/bd9035e7884e202a6a72fd028d46aead342e.pdf