Lincoln Electrics Essay

Decent Essays
1. Should Lincoln Electric expand into India by investing in a major production facility there?

I think that Lincoln Electric (LE) should definitely has a production facility in India because of its growth and foreseen opportunities, but if I were LE I would suggest to enter with a local partner in order to gain knowledge and experience in how the country operates in terms of bureaucracy, labor, culture and so on.

LE is known for its high quality products and its technical innovations. On its 60 years of international experience, the company gained valuable knowledge on what to do and what to avoid when moving abroad, and that is why they refocused their expansion strategy into joint ventures, instead of acquisitions avoiding the
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That could jeopardize LE position of finding a partner in India, because the company would be exposed to share some of its secrets with them, and as the case states, they wouldn’t mind coping it in the future. Another difficulty the company will face is the two main competitors that are already doing business in India, Ador welding Ltd and ESAD India.

Finally, we have to wonder how the Liability of Foreigners would affect the company. Even though we do not have any direct reference on the culture and political situation, we can assume that they are a lot different to what the company is used in its own country. Therefore, and even though the recommendation is to enter India finding a partner that can help them understanding the culture, distribution channels and help them dealing with the Indian bureaucracy, the LOF variables should be taking into account to help the company minimize the failure risk of succeeding in India.

2. Irrespective of your answer to the first question, suppose Lincoln Electric does expand into the Indian market by investing in a production facility: Should they enter through acquisition, Greenfield, or joint venture? What factors inform your decision among these entry modes?

Analyzing the pros and cons of each entry mode, I would say that a Joint Venture(JV) is the best option for LE to enter the country. On the one hand, local partners can help LE to reduce the LOF. The local
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