PUBLICATION DATE: November 15, 2006 PRODUCT #: 707S26-HCB-SPA

The article describes Lincoln Electric’s business strategy and incentive system, and it discusses the international strategy alternatives that the firm faces going forward. Lincoln Electric is deciding whether a powerful drive into India should be the next step in the globalization of the company’s.

The business has enjoyed increasing success in China through both a joint venture and set of bulk-owned plants as a result of its aggressive growth. The firm is determining how it could apply the lessons of its expertise, in addition to the lessons of the Chinese experience to India, across Europe, Asia, and Latin America.  First of all, should Lincoln Electric possess a manufacturing business in India? If so, the Indian market could be entered by Lincoln Electric by acquisition, by joint venture, or by building a new plant on its own.

If the firm enters by acquisition, then it would not be clear what kind of valuation to apply to any of the Indian firms that are incumbent. If the firm were to enter by joint venture, the question was: How could Lincoln ensure its ability to make key business decisions? If the company should happen to build its own plant, the question was: Would the total control the firm would appreciate more than sufficiently compensates the cost of starting from scratch?

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