General Electric's Joint Ventures Case Study Example | Topics and Well Written Essays - 500 words

General Electric's Joint Ventures - Case Study Example As opposed to joint ventures where partner companies have significant power in making strategic decisions, acquisitions allow companies to have full control of management and resources (Hill, 2011). The preference for acquisitions by General Electric also resulted to the congruency of this strategy to its business philosophy. However with the changing business environment, the company has shifted to joint ventures as an entry mode into foreign markets. In the recent past, General Electric has preferred joint ventures as a strategy for entry into foreign markets. This is because of the bids for acquisitions have skyrocketed. With the 2008–2009 economic crises, the company would no longer afford risking spending large capital in bidding for acquisitions. As a result, General Electric feared that it could overpay for acquisitions which would cripple its economic position which was already affected by the 2008-2009 economic crisis. In addition, there are many companies with which General Electric would form joint ventures. Through joint ventures companies benefit from local business relationships, local expertise, political contacts and an already established market (Hill, 2011). Even though joint ventures provide an effective way through which companies share business risks, there are other risks associated with this mode of entry. These risks include possible changes in political and legal environment which would act out of favor with foreign companies. Additionally, the power that partner companies have in the process of making strategic positions would be overused. Additionally, the objectives of business partners may not be congruent in a joint venture (Hill, 2011). Furthermore, cultural differences and divergent management styles among partners in joint ventures are risks which would cause failure of success in the partnership. In