Lincoln Electric

SWOT
Strengths
World leading manufacturer of welding electrodes
Strong HR policies of incentive systems (piecework & annual bonuses)
Strong HR policies of guaranteed employment
Strong corporate culture, erased hieratical distinctions (Managers on floor, standardized caf
terrier and no reserved parking)
Strong communication among management and employees (suggestions & problems)
Trust among management and employees
Weaknesses
Weak HR policies of no sick leaves
Little attention by Parent organization to acquisitions and expanded factories
Corporate headquarters contained no managers with substantial international experience
Acquisitions were unionized
1991-1992 all acquisitions operated in red (worst financial years with $80 loss in two years)
Only focus on manufacturing (lack of focus on sales and R&D)
Weak sales organizations in foreign factories
Full production line in foreign factories instead of specialized production in one category
Lack of manufacturing experience of managers in Venezuela and Brazil
Wrong believe of accepting same incentive system everywhere
Opportunities
Develop factories in developing countries (Asia)
Joint ventures (partnering with local companies)
Acquisition of British welding company
Ventures abroad: in 1916 sales organization in Canada
Give more focus on Sales and marketing
Threats
Competitive pressures in 1980s and 1990s resulting in reduced revenues and bonuses
Faced world war II
Entrance of General electric and Westinghouse


PEST
Political Environment
Guaranteed employment required by Canadian law but not introduced
1955 opening factory in France on request of France government
1970s guaranteed employment and sick leaves mandatory from government
Mid 1980s regional trade blocs (European Union)
1990s NAFTA (north American free trade agreement) led to specialize in different products
In Brazil bonus paid for two consecutive years become legal entitlement
Germany piecework was illegal
Trade barriers make consumables more costly to import in Asia
Political situation in Indonesia (dictatorship)
Economical Environment
Low labor cost in Asian countries
Deep recession in 1982 in US market
Unprofitable years in early 1970s due to oil crises
1980s slow down in US market growth
Economic instability in Indonesia
1991 sales hit in Europe and Japan due to recession
Social Environment
Australia one of the worlds most unionized society
Acquisitions were unionized
Lincoln incentive system was not accepted everywhere
Indonesian consumers prefer to deal with countrymen
Technological Environment
Untailored technology (products) in other countries according to their local needs (US based
product was used)
BCG
Cash cow: Automatic welding equipment
Stars: Automatic welding consumables