StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Going Global-Issues in International Business - Case Study Example

Cite this document
Summary
The company that is the subject of this paper "Going Global-Issues in International Business" is one of the leading US-based multinational manufacturers of several welding products, such as welding consumables, arc welding equipment, oxy-fuel cutting equipment, robotic and plasma welding systems…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.5% of users find it useful
Going Global-Issues in International Business
Read Text Preview

Extract of sample "Going Global-Issues in International Business"

? Going Global-Issues in International Business Introduction Lincoln Electric Company is one of the leading US based multinational manufacturer of several welding products, such as welding consumables, arc welding equipments, oxy-fuel cutting equipment, robotic and plasma welding systems. The organization was founded by John C. Lincoln in the year 1895. It is headquartered in Ohio. In the year 1995 the organization hit 1 billion US dollar in sales. Between 1995 and 2005, Lincoln Electronic Company started to gain popularity. In 2004 the organization appointed John M. Stropki as the president, chairman and CEO who was the seventh chairman of the organization. The operating income and net income of the organization increased significantly in the year 2005. The CEO introduced several strategies to expand their businesses in global market place. The study will discuss about the issues associated with business expansion strategies in global market place. Global Welding industry Welding is the most supporting activity in several industrial activities. Any two metals can be effectively or strongly joined through welding process. Arc welding is considered as the predominant method of welding. However, as of 2005, the welding industry became a 13 billion US dollar industry. Welding products play a key part in development of several important and strong structures around the globe. Welding products are highly required in civil and mechanical field. Day-by-day, the production and sales of welding products are increasing due to intense market demand around the globe. North America, Europe and Asia Pacific are the major regions of welding industry. Global Strategies and Issues The first major global expansion of Lincoln Electric Company occurred between 1986 and 1992. The organization established 22 different manufacturing plants in 15 emerging countries around the globe during this period. The organization purchased the assets from an Australian organization named Air Liquide in the year 1987. The organization followed aggressive business expansion process based on their enormous success in US market. The organization followed aggressive acquisition process in Brazil, Norway, Scotland and Mexico. However, these acquisitions have resulted huge operating losses. In spite of profitable business operation in US market, losses in international market place forced the organization to borrow money from different entities to distribute rewards and bonus for the US employees. In terms of acquisition process, the organization undertook several in adequate decisions. It is true that economic condition, access to market and resources cannot be similar in each and every country. Wrong market information and lack of in-depth primary research in international markets forced them to redefine their strategies after a certain period of time. The organization developed a series of determined financial goals, but the organization still depended upon its market growth rate in US to meet these organizational goals. Issues in Japanese, South Korean and Chinese Market The company faced several problems in selling the products in several emerging Asia Pacific countries, such as Japan, China and South Korea. The distribution of the organization in Japan was very limited. Lincoln Electric Company did not have any kind of access at the commodity end of the Japanese market. In addition to this, the organization had limited after sales support capability and limited in-country demonstration service facility in Japan. Therefore, it was difficult for the organization to achieve high-tech sales growth. The products of the organization sold in Japanese market as niche products for small groups of customers. The organization suffered from huge operating losses due to this factor. Lack of manufacturing plants, limited access to the market, improper decision, making strategy affected the business performance of the organization in Japan. In addition to this, the products were not optimized for effective and required application in Japan. Actually, the organization did not enter in the Japanese market with appropriate resources. Moreover, the expansion plan was developed quite early. The organization did not have any kind of production presence in South Korea. The organization had the access to this market through its distributers and business partners. Slowly and gradually, several local organizations started to establish high-end wielding equipments. In addition to this, these organizations started to introduce products according to the current market demand. On the other hand, Lincoln Electric Company takes huge time to distribute the products in the Korean market as the products come from outside country. These issues affected the organization’s business performance. In China, the organization developed a production unit. The organization had access to the Chinese market for a certain period of time. However, the organization faced difficulties in several ways. The organization was finding it difficult to get skilled and competent managers and employees (Ahlstorm & Bruton, 2009). In addition to this, frequent change in governmental rules and regulations and several legal barriers decreased the sales of the products. Opportunity in Indian Market It is known to all that India is one of the emerging and developing economies around the globe. The nation is maintaining significant and constant economic growth rate since 1991. In spite of global economic downturn, India is among of those few countries that secured and maintained positive GDP growth. The welding market in India is considered as the third largest market in Asia. In addition to this, the organization used to outsource from several foreign organizations and government of India motivate the foreign players to invest in domestic market in order to avoid several economic challenges, such as unemployment. It is true that large number of potential competitors is competing with each other in Indian market. The organization could enter in Indian market by joint venture or acquisition. But, several political and legal factors stop them to take these decisions. Conclusion Lincoln Electric Company is one of the leading welding product manufacturing organizations. The organization is facing problems and challenges due to inadequate business expansion strategy in international market place. Lack of primary market research, poor expansion strategy and lack of plants in several emerging economic made it difficult for the organization to increase its global market share. The organization still has to depend on its US sales and business performance. It is important to redefine and develop new strategies for international market to overcome the challenges and losses. References Ahlstorm, D., & Bruton, G. (2009). International management. Stamford: Cengage Learning. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Going Global-Issues in International Business Case Study”, n.d.)
Going Global-Issues in International Business Case Study. Retrieved from https://studentshare.org/marketing/1487588-going-global-issues-in-international-business
(Going Global-Issues in International Business Case Study)
Going Global-Issues in International Business Case Study. https://studentshare.org/marketing/1487588-going-global-issues-in-international-business.
“Going Global-Issues in International Business Case Study”, n.d. https://studentshare.org/marketing/1487588-going-global-issues-in-international-business.
  • Cited: 0 times

CHECK THESE SAMPLES OF Going Global-Issues in International Business

International Business issues

In particular this research is being carried out to evaluate and present challenges of international business; international institutions and ethics in international business.... This research is aimed at providing a report on issues of international business.... … This essay explores such issues: the United Nations millennium development goals, progress toward the goals and impact on international business; the WTO principles and success in their implementation; the Organization for Economic Cooperation and Development; financing operations of the World Bank: purposes of the financing operations and success in realizing the purposes....
11 Pages (2750 words) Essay

Issues in Global Businesses and Consultancies

A business or consultancy that devises and carries out its transactions across various national borders in an effort towards satisfaction of objectives of organizations, individuals or even companies can be said to be a global business or consultancy.... A global business is just like any other local business since the basic principles of a business apply.... The difference comes from the application of thaw global business, its complexity as well as the intensity....
12 Pages (3000 words) Essay

Global Financial Crisis on International Business

The policy implications, needs for reform and the efforts to work into a sense of recovery within the economy have all become a main proponent with the global financial crisis, all which are now creating different approaches to financial needs at an international level.... Introduction The changing context in the economy is one which fluctuates depending on the alterations from dependent variables....
12 Pages (3000 words) Essay

Responsible Management of the Global Businesses

The paper also discusses the guidelines laid down by the United Nations Global Compact in maintain international standard of management of resources along with the impact of good governance on the health of a business in the global world.... As the companies expand their business globally they are facing a number of challenges regarding their human resources and several other issues regarding the conduct of their businesses.... Human resource management is a key issue for consolidating the business globally as well as maintains a healthy image of the company (Palthe, n....
11 Pages (2750 words) Essay

Contemporary Issues in International Business

  The current paper "Contemporary Issues in international business "explores and evaluates the key recent developments of clothing industries.... i] Another issue for international business is the elimination of trade barriers.... The willingness of investors to support global business initiatives is not standardized.... Emphasis is given on the impact of these developments on international firms.... It should be also noted that the environment in which international businesses operate is briefly explained so that the position and the challenges of global clothing industry to be fully understood....
11 Pages (2750 words) Assignment

Why are environmental issues becoming more important for international business

he relationship between international business and environmental issues has undoubtedly attracted a load of attention over the past few years which has only served to strengthen the reality of this interesting association.... hellip; Why Are Environmental Issues Becoming More Important For international business?... The relationship between international business and environmental issues has undoubtedly attracted a load of attention over the past few years which has only served to strengthen the reality of this interesting association....
7 Pages (1750 words) Essay

International Business

hellip; 12 Study of the international business environment 14 About the organization 15 Designing international strategies for Qatar Petroleum 16 Conclusion 18 Reference 19 Introduction The world of the 21st century is evolving every day.... New project Table of Contents Introduction 3 Needs for International Management 4 Culture factor' in international management 6 Different kinds of international strategies 8 Global Strategy 8 Transnational strategy 9 Multi domestic strategy 10 Bartlett and Ghoshal model of international strategic management....
18 Pages (4500 words) Research Paper

Issue in global business

“Synchronized economic slowdowns in Asia, Europe and the United States, the three engines of global commerce, have decimated international trade” (Kurlantzick, 2003).... For example, the EU is an economic and regulatory body which takes membership based on region (the European region); Malaysia and… In terms of its impact on free trade, regionalisation has mixed benefits, and there is an equal variety of points of view, some supporting free trade and some supporting protectionism....
4 Pages (1000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us