Lincoln Electric Case Study

|Case#2: Lincoln Electric: Venturing Abroad |

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|With an effective and well-established, albeit abnormal, business model driving a |

|consistently successful and profitable domestic business, Lincoln Electric was |

|determined to gain worldwide market share in the welding equipment and consumables |

|industry by venturing into the developing markets of Eastern nations. International |

|management correctly identified Indonesia as a logical point of entry for the Eastern|

|markets. The nation’s construction and manufacturing industries were growing rapidly|

|(12.4% and 11.0%, respectively, in 1996), and Lincoln Electric already had an |

|established reputation for producing a high quality product. The future success of |

|the company in the developing nations of the East hinged heavily on how Michael |

|Gillespie, president of the Asia region, would plan and execute his entry strategy |

|into Indonesia. |

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|Jason Sansoucie |

|10/24/2009 |

|INTB 6200 FA2 L |

Partnering with SSHJ, a subsidiary of Sin Soon Huat, in a joint venture would prove to be the most effective entry strategy for Lincoln Electric into Indonesia. Having primarily distributed Lincoln products for 20 years in Singapore, Vietnam, Burma, and China, SSHJ had the product knowledge and expertise needed to shift the Indonesian welding market to Lincoln Electric. Moreover, SSHJ had the local industry knowledge and government contacts that Gillespie’s marketing...