Lincoln Electric is an organization that was founded at the end of the 19th century by John Lincoln. Initially, it produced and sold electric motors, but later added welding consumables and equipment that became its primary business. Due to the high quality of products and successful human resource policies, it became known as “The Welding Experts” (Williamudavis, 2009).
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The company has a sustainable competitive advantage. It has a strong brand and is recognized due to it operating all over the world. The organization is able to use its resources externally, which reduced threats. What is critical for the company’s profits, it has an opportunity to set a price premium for those products that are innovative, which is higher than a general price. In this way, providing brand-new products and ensuring their diversification, Lincoln Electric reaches stability. It is also supported by the fact that company decided to focus on welding even though it provided others products from the very beginning. In this way, it received a chance to become an expert, while its competitors paid attention to other alternatives. Lincoln Electric made three acquisitions and made those products provided by other companies its own, which enlarged the customer market. FANUC Robotics gave it a right to sell the robotic arm and a wire feeder; Harris Calorific provided products connected to gas-cutting; and J.W. Harris Company gave access to brazing and soldering alloys.
Successful operations are also connected with macro-environmental factors. Sectors in which the company operates require government approval, which makes it more difficult for competitors to enter them. Still, the fact that law varies by region is an obstacle even for Lincoln Electronics because it affects expansion and globalization. Open market economy and the high possibility of receiving profits from the Indian market are likely to be beneficial to the company. Still, a strategy to cope with social issues is required because the very little number of those individuals who are looking for employment had vocational training and speak English decently, which prevents them from working successfully. Lincoln Electronic should try to develop an innovative technology that can be used to reduce electricity costs in the country and reveal its power.
Lincoln Electronic benefits due to its human resources and incentive system and award-winning research and development department. It was among the first organizations that introduced human resource innovations, which allowed it to work with award-winning professional engineers who had much experience in the area. Still, the company depends greatly on North America while other markets grow faster, so sales in them should increase. The top management consists of expatriates mainly while more advantage can be received when hiring local talents. Lincoln Electronic can improve its current condition if it starts operating in India because this country is growing fast and is likely to enhance its performance greatly, becoming one of the major world’s economies (Villeneuve, 2011). In addition to that, it does not require the company to make any future obligation. Still, the organization should be aware of local competitors in foreign markets.
In order to improve its position, Lincoln Electronic can create a strategic alliance with Ador and turn into the leader in the market. Still, it should not acquire this company because the acquisition is costly and Ador has different management styles. Focusing on the creation of a joint venture, Lincoln Electronic can increase its profit and reduce expenses. The organization should extend to India and enhance its manufacturing capabilities there to reduce costs and limit dependency on supplies.
Villeneuve, K. (2011). Should Lincoln Electric expand in India by investing in a major facility there? Web.
Williamudavis. (2009). A case study of Lincoln Electric. Web.