Lincoln Electric Essay

1296 Words Sep 25th, 2009 6 Pages
The two most important issues that Lincoln Electric is faced with are as follows. First, the inability to meet customer demand because of the shortages in supply creates opportunities for competing firms to enter the industry. What resources and capabilities does Lincoln Electric have that can mitigate this threat of entry. Second, the emphasis put on the monetary incentive plan leaves the company vulnerable in economic hardships. How can Lincoln Electric continue to encourage competition and quality without a high emphasis on monetary incentives? Examining the arc welding product industry structure will help identify the opportunities associated with that structure. Arc welding is part of the emerging, mature, and international …show more content…
This opportunity allows them to emphasize customer service which gives them superior performance and quality brand identification. Lastly, the threat of entry for the arc welding product industry includes economies of scale and cost advantages independent of scale. Lincoln Electric mitigates these threats using resources that create cost advantages that are valuable, rare, and organizationally competent. These resources include the internal sale force, the inventory control team, the flat organizational structure, and the employee compensation package. Two courses of action to consider are: global expansion and part time employment. Lincoln Electric has been the world’s largest manufacturer of arc welding products for the last 30 years. This achievement was accomplished using resources such as process innovation, proprietary technology, and technology software such as its internal sales force and inventory management team. They’ve accomplished this success all from a single factory in the US. It is this very success that has created their biggest threat, the threat of buyers. Their high quality product at a low price has increased demand. Because of the size and location of the manufacturing plant, Lincoln Electric simply can’t meet the needs of its customers with its current levels of output. International expansion would mitigate this threat by increasing supply. It would also exploit the opportunities in process innovation relating

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