Strategy Assignment : Lincoln Electric

2135 WordsNov 6, 20059 Pages
Strategy Assignment : Lincoln Electric: Venturing Abroad 1. Lincoln's competitive advantage lies mainly in its effective compensation and benefits system which put forth three main elements to spearhead the company's efforts. The trinity of elements comprised of piecework, bonus system and guaranteed employment. Piecework provided workers with a sense of autonomy in that now, workers can earn as much as they are willing to work for. The bonus levels in Lincoln far exceeded those of industry peers and were based on their contributions in the form of output, ideas, cooperation, dependability and quality. Consequently, the benefits provided by Lincoln were not extensive as they saw higher wages as substitutes for things such as insurance,…show more content…
The new strategy also entails Massaro to keep a closer watch on the international operations in stark contrast to the swim or die approach undertaken previously. Lincoln's structure has changed somewhat to accommodate this greater need for supervision. For example, a president is named to head international operations in each of the five regions, North America, Europe, Russia/Africa/Middle east, Latin America and Asia. These presidents held vice-presidential rank in the corporate structure to underline the importance of the subsidiaries to the overall global strategy of Lincoln. They play vital roles in supervising sales staff in their regions, advising Massaro on the need to create manufacturing capacities in their respective countries and also developing interregional cooperation such as sourcing goods from the Lincoln factory that could provide them most profitably despite it being in another territory. Compare this to previous internationalization strategies where the subsidiaries were left to their own devices and resulted in several inefficiencies both in terms of range of products manufactured as well as other costs incurred. Finally, Massaro also had to tweak the imposition of Lincoln's famed incentive system. The new internationalization strategy concedes that the system cannot simply be transplanted for use in another region because
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