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Lincoln Electric Case Study


Lincoln Electric is one of world leading companies providing welding equipment. The company was established at the end of the nineteenth century and now it is operating in five continents. In 2005, the net income of Lincoln Electric was $122 million (Siegel 3). The company’s success can be explained by effective strategies employed.

For instance, the company managed to develop efficient functional strategies. These strategies include the “use of employee stock ownership”, bonuses “determined by merit ratings”, piecework pay and so on (Siegel 3). These incentives increased employees’ motivation and the quality of products provided also improved.

It is also noteworthy that the company manufactured arc welding equipment as well as consumable products. This diversification has enabled the company to meet consumer’s needs and the company’s revenues increased.

As for increasing efficiency, the strategy mentioned above was crucial. Apart from diversification and proper human resources management, Lincoln Electric marketed its products in 19 countries. At that, when the company was facing certain problems, the CEO managed to increase efficiency of facilities through closing unprofitable plants and eliminating duplication in other plants.

When it comes to increasing quality, the company implemented a number of successful strategies aimed at development of new products. The R&D department of the company patented various products that were hits in the field of welding industry. As has been mentioned above, employees were motivated to produce high-quality products and this also contributed greatly to the overall quality of products manufactured.

Increasing innovation is closely connected with increasing quality. However, it is important to add that the company used innovative strategies in production (patented new efficient products) as well as other spheres (introduced effective HR strategies, diversified production).

The company’s success is also rooted in increasing customer responsiveness. This was achieved through development of user-friendly equipment that was able to solve numerous issues consumers may have faced during their work with the company’s products. Diversification was a key element of this process.

Lincoln Electric launched a very effective Guaranteed Cost Reduction Program through which it guaranteed that users of the company’s products would save money (Siegel 5). Through this program, Lincoln Electric developed quite close relationships with its consumers. Sponsoring such sporting events as NASCAR and NHRA also contributed to increasing customer responsiveness.

It is necessary to highlight the most effective business level strategies. These include optimization. As has been mentioned above, the company’s CEO managed to close unprofitable facilities in a number of countries and optimize functioning of others.

Elimination of duplicating certain process had a positive impact on the company’s development. The focus on quality of products as well as diversity was also beneficial for the company. Finally, company’s’ HR policies led to development of trustful relationship between management and employees (Siegel 4).

Corporate level strategies have also been effective. Thus, the company’s readiness to expand was central to its success in the world. The company managed to identify major markets where their products would be in demand. At the same time, the company’s CEOs were not afraid to close facilities that had been unprofitable.

Importantly, Lincoln Electric was the company that managed facilities effectively and eliminated any reduplication. Finally, in the time of global financial constraints, the company was also successful in acquisitions. The policy to acquire assets of companies well established in certain markets has proved to be effective and the company managed to remain the leader in the global market.

Works Cited

Siegel, Jordan. “Lincoln Electric.” Harvard Business School (2008): 1-24. Print.

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IvyPanda. (2019, August 6). Lincoln Electric. Retrieved from https://ivypanda.com/essays/lincoln-electric/

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"Lincoln Electric." IvyPanda, 6 Aug. 2019, ivypanda.com/essays/lincoln-electric/.

1. IvyPanda. "Lincoln Electric." August 6, 2019. https://ivypanda.com/essays/lincoln-electric/.


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IvyPanda. "Lincoln Electric." August 6, 2019. https://ivypanda.com/essays/lincoln-electric/.

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IvyPanda. 2019. "Lincoln Electric." August 6, 2019. https://ivypanda.com/essays/lincoln-electric/.

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IvyPanda. (2019) 'Lincoln Electric'. 6 August.

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