Electro Inc. is fast developing company which strive to build a high tech wonder company image, it also has clear market segmentation and specific strategies to penetrate this segment. However, in recent report, the company’s financial statement indicates that the company experience financial difficulties at this moment. Some managers believe that this difficulty is largely due to two projects – Series A and Mercury. In this case analysis I will examine these two projects and make some recommendations for the company’s management as a whole.
What do you think of Lincoln’s emerging international strategy by the mid-1990s? Does this company have a competitive advantage that can be transferred to the global environment? How is Massaro’s recent overseas initiative different from Lincoln’s earlier failed approach?Lincoln Electric: Venturing Abroad
Once an organization has decided to expand into the global marketplace, it must select a method of market entry. Companies may choose from five general options: (1) exporting, (2) franchising, (3) a strategic alliance, (4) a joint venture, and (5) direct investment. Deciding which option is right for an organization is based upon the level of financial commitment, risk,
The lesson learned from this is that sometimes it is easier and faster reach a new market via joint venture, even though the profit will be less, but the company can save a lot of money in studying the new market trying to understand the new culture and how they purchase and also it can minimize the risk because there is a national brand supporting the new international brand, which gives confidence and security to the customers.
With the years going by, Lincoln Electric Company, despite its excellent performance in production, has been growing in a very steady speed, and never really grew to a large scale company.
The 3 entry modes present different advantages and drawbacks, Franchising Strategy showed low control in the operations, low risk of exposure, low investment and high support from the local partner. Joint Venture entry mode indicated moderate-high investment, moderate risk, medium exposure and moderate control. Lastly, Greenfield entry mode denoted high risk, high investment, high control of the operations and high exposure.
Michael Gillespie, The Lincoln Electric Company’s new president for the Asia Region, was “encouraged to develop plans to open welding consumables factories in several Asian countries” by the new CEO, Anthony Massaro, and Gillespie had specifically “turned his attention to plans for Indonesia [O’Connell, main reference, p 1].” We worked with Gillespie to prepare for the September 1996 meeting with Massaro and the presidents of the other worldwide regions. We analyzed Lincoln’s current capabilities and its past experiences and prepared a transformative plan based on business concept innovation [Hamel, ch 3], documented by this report, with a three pronged approach for the Asia Region. The first
In order to make future international plants more successful than previous acquisitions, Lincoln Electric’s managers may consider re-evaluating their management control approach; carefully evaluating the international labor laws and regulations of the plant prior to deciding whether or not to invest in it; and providing increased training and development to managers and workers of both the parent company and host company to ensure understanding of both sides’ cultural values and beliefs.
Ans. An Indian expansion through an investment in the major production facility is the most logical step for Lincoln Electric in pursuance of its long term strategic goals. The company needs to be free from its dependence on North American sales; the sales in the North American markets are stagnant whereas other markets especially the Asian markets are growing significantly faster. Its long term financial targets which include sales growth double the rate of growth in worldwide industrial production, operating margins over 15%, earnings
Nikola Tesla is regarded as one of the most brilliant inventors in history. His work provided the basis for the modern alternating current power system, as well as having developed both radio and the fluorescent light bulb. He worked with Thomas Edison and George Westinghouse, among others. He was also widely misunderstood by his peers and the public at large.
When a company decides to enter in Vietnam has to take into account diverse factors. First of all, the mode of entry ( with an import agent, a representative office, a business cooperation contract, a process contract or a joint venture) with its advantages and disadvantages and, in case of needing a partner, making the right choice.
As an executive of a large U.S. multinational corporation planning to open a new manufacturing plants in China and India to save on labor cost. There are a few factors that must consider when making the decision. The factors are including the environment business of the both country.
These factors consist in studying the country’s culture, assessing the market, hiring locals and establishing work contacts. In addition to that, Zahra considers that INV’s managers should demonstrate a high degree of openness and flexibility thus allowing the firm to function in the foreign environment.
For any company going out for the foreign market is because of any one out of globalization, reducing tariff all over the world, to increase the market share, saturation of the local market, for getting the economies of scale of production, to use their excess capacity and use the resources where it is available at law cost.