Lincoln Electric: Venturing Abroad Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem Statement

Lincoln Electric’s regional president for the Asian region is considering a move to expand the business in the Indonesian market, but is confused between the options of either opening a manufacturing capacity with 100% ownership or to pursue a joint venture. Besides that, the company has a unique incentive driven management system and the regional manager is also considering transferring this system into this new region the company is aiming to operate.

Analysis

This section will analyze the current situation leveraging various strategic alignment models like SWOT analysis and since the company is planning a move regarding expansion for which environmental analysis will be conducted in order to highlight the key issues and root causes of the problem faced by the company.

Strengths

The company has a strong reputation in the industry and its success in the US market is a solid proof of the company’s outrageous strength. The company has been involved in various activities and despite strong competition in the market the success has prevailed. In order to stay ahead of the competitors, the company has developed a strong culture of values in the organization and the environment is very friendly which is regarded as the major strength of the company. However, the competitive advantage of the company lies in its incentive system that has played a vital role in assessing the roles of individual workers and has helped in appreciating the talented employees.

Besides that the piece work, the bonus system, limited benefits and guaranteed employments that are also the major components of the company’s incentive system has helped build trust among employees and motivated them to contribute more towards production and earn as much as they can. Secondly, the communication system of the company is also quite strong which also motivated employees to put forward their words. All these activities encouraged innovation and new ideas in the organization that have played a vital role in the global success of the company.

Furthermore, the strength of the company lies in assessing the need of the country in which it tries to expand and enhance the incentive system accordingly that has contributed a great deal in the overall success of the company. Besides that, the company has focused on establishing relationships with the distributors, suppliers and customers, this has helped the company in creating strong brand awareness in new ventures.

Weaknesses

Although the company has reputed name but there are some weaknesses at the company’s end that are of significant importance and holds the key position in forming the root causes of the issues faced by the company. First of all, the company has failed to deliver in some countries and has experienced failures in some of the important markets.

Besides that, the company has faced issues in many countries that has erupted or disrupted the position of the company in that particular company like Japan. On the other hand, the difference in opinions exists in the company domestic and international teams that has also caused issues for the company and eventually resulted in failure.

Furthermore, the acquisitions made in the European market caused additional issues for the company to cater that hurt the financial position of the company. The company has a strong network of distributors, but in the European region distributors lack manufacturing knowledge that has created obstacles for the company to reach customers.

Opportunities

The company has the opportunity to exploit the Asianmarket, which is a growing market and has a strong consumer base. The company has attempted to enter Japan but failed to deliver due to some obstacles, but countries like China and India are of huge potential and lucrative opportunities. Secondly, the company can also pursue joint ventures in low cost countries in Asia and enhanceitsconsumer base. Furthermore, the company has the potential to revamp its international strategy to further enhance its performance in the European region.Lincoln Electric Venturing Abroad Case Solution

Threats

The major threat that the company can face is in the form of competition either in the US market or in international markets. Furthermore, the economic downturn can also threaten to hinder the performance of the company. Besides that the company will also have to encounter various challenges like the economic condition or constraints and the political constraints while entering into the Indonesian market. On the other hand, the company’s incentive system may not be applicable in the Indonesian market due to the cultural; constraints present their which may hinder the performance and stop the company from achieving its objectives. All these threats are of significant importance and are the reason as well that has made the decision for the regional manager challenging......................

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