Lincoln Electric Company’s Entry into Foreign Markets

Table of Contents

Executive Summary. 3

Introduction. 4

Background. 4

Literature review.. 5

Issues and Problems Faced by Lincoln Company. 5

Causes of the problems. 7

Recommendation. 10

Implementation Plan. 11

References. 12

Executive Summary

Lincoln Electric Company is a pioneer manufacturer and exporter of arc welding machines. It was established initially in Cleveland, but like any other commercial organization, the expansion of the production line led to the idea of going global. Technological advancement in the early 90s led to the expansion of international markets for arc welding. The industrial revolution in developing countries opened the market for welding materials and machines. Even in the contemporary business society, internationalization of business is affected by problems such as adapting to the business foreign culture, business regulations, laws and institutional frameworks. The decision on the appropriate entry method require careful analysis and research. IT is one of the issues that affected the act of expansion of operation, with the choice of entry in German and Brazilian market, which led to closure of business in the foreign countries. In different countries, there was significant differences in the systems and philosophies that were not amenable to parent Lincoln company’s management strategies. The issues were augmented by the act of the company to utilize the expatriate mentors and managers from the parent company in Cleveland to assist in solving the issue. The recommendation for an effective venture into foreign market include the need for companies to conduct research, regarding the foreign market and the probable entry mode.

Introduction

The process of expanding a business is faced with major problems such as adapting to the local culture and incorporating incentives from a different country on a strange market. Lincoln Electric Company was not immune to such issues, just like any other organization that wants to internationalize its business (Bjorkman & Galunic, 1999). Employees as the human capital, are the most important resources which Lincoln model aimed at ensuring their satisfaction through an incentivized payment scheme. Lincoln Company management policies in overseas market involved adapting to the local culture and effective employee management. Establishing market in oversea nations through green field investment, mergers, and acquisition strategies are associated with a series of problems. The report analyzes employee management using the incentive system of management and to determine the probable ways of adapting to the culture of the hosting nation in the case of internationalization of business. The objectives of the report include to:

  • Identify the issues faced by the Lincoln Company while expanding business to overseas with an aim of recommending probable solutions.
  • Demonstrate how issues and problems that face organization’s quest for going global and their possible causes using the Lincoln Company as the case study.
  • Analyze the possible entry modes in venturing into the foreign market for Lincoln Electric Limited, their advantages, and recommendations…..

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