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Free «Macroenvironmental Situation» Essay Sample

Lincoln Electric enjoys a massive support of market for its products for more than a century. Although it has faced varieties of drawbacks, benefits that has been accrued from the company’s products cannot be ignored taking into consideration the impacts the major competitors have posed as well as other social, environmental among other drawbacks. Given the company’s expansion plan, the benefits are likely to increase. Improvement in research and development techniques is likely to be a major milestone geared towards dealing with major challenges (both external and internal), those that are likely to impact negatively on the company’s welfare. The company’s C.E.O John Stropkin’s success can be attributed to his wealthy lessons and experiences, which can be used in expansion schemes such as that of India. However, due to differences in economic environments; it might pose challenges especially when applying similar expansion skills to different economic environments. Its dominance in the market was evident by its increase in dominance from a U.S dominating company to a global company in the period between 1995 to 2005.



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The company is able to sustain the environment, both in the social as well as the physical dimensions. This can be explained by their application of environmental friendly things such as electricity. Socially the company is able to get in touch with the customers, while at the same time assisting them on the skills required to use their products.


Competition from other companies can be viewed from diverse perspectives such as the level of revenues, price of their products, customer services, quality of products, innovation, technical expertise, rate of expansion and resources among others. The major competitors of the company includes:ESAB (Charter plc), Illinois Tool Works (ITW), Air Liquide, Kobelco, Thermadyne Holding Corp. great competition was however, witnessed in 2006 where the arc welding industry witnessed the rise of diverse but related companies with diverse products to compete in the market. The top six companies only accounted for only 45% of the global market which is a manifestation of reduced domination by the major companies. The major area of competition is in the products. The companies produce similar goods; mostly the equipments and the consumables. This poses a threat to the market of the company’s products. It is worth noting that the company has a highly trained technical force comprising of sales individuals, research and development staff which makes it to amass high domination in the globe.


The company had long term goals of financial targets of sales growth at double the rate of growth in worldwide industrial production. This seemed difficult as the company uses substantive amount of money on expansion. For example, in 2005, the company used two-thirds of free cash flow for international expansion, which greatly hinders the attainment of the objectives.


The products of the company were sold in more than 86 countries. They have competent sales persons. The company also has a scheme of providing world class welding techniques to their distributors and customers. They also provide relevant information to them concerning the use of their products without charging them directly. The company however, charges an indirect fee of the advice offered to the product users depending on the sales scales. This makes it possible for the company to apply distinctive measures in the way of operation. The employees of the company make plan of visiting prospective customers and advice them on the required mechanisms and products to use in their daily endeavors.

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The company faces challenges such as it depends on North America for the marketing of 60% of its products. Other welding companies were still growing at a very high rate which could threaten the state of the market of the company. A lot of funds are required to expand the market in other areas as well as maintain the competition. The company also faces the challenge of partnership with other starts as it attempts to expand. Decision making as a result, becomes problematic with the two sides not reaching a consensus on the decisions that they want implemented.

It’s worth mentioning however, that the company has potential especially as it continues to expand. This will be realized by regionalizing the constituent companies that will ultimately make their goods available.


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