Lincoln Electric - Venturing Abroad

Lincoln Electric: Venturing Abroad

The data given in the case clearly shows that Lincoln Electric has a dominant position in the Indonesian market. However, this position is existent only in the Automatic welding process and the Semi-automatic welding process segments. In the Stick welding process, which is used by most Indonesian customers, Lincoln is not the clear market leader. Despite this, they have a very significant market share and their products are well recognized by the Indonesian market.

At present, Lincoln’s strategy is to import all units sold in the Indonesian market. This strategy would, however, need to be revised. Indonesia’s economy is growing rapidly (in 1996) but most of the key positions are controlled by Suharto’s relatives. This has enabled local companies to dominate the import and export business by giving ‘gratuities’ to the relevant officials. Also, there were indications of financial troubles which would lead to a slump causing the currency...