Lincoln Electric Company Historic Sketch

Lincoln Electric Company Historic Sketch

With nearly 7,000 employees, Lincoln Electric Company is the world's largest manufacturer of arc welding products and a leading producer of industrial electric motors.

The company, founded in 1895 by John C. Lincoln, with a capital investment of only $200 ("110 Years"), now controls approximately 40% of the arc-welding products market.

Despite the organization's longevity, they have held at this 40% market share for several years. This analysis explores Lincoln's general environment and the economic and social trends that are affecting the organization in the past and presently.

Lincoln's core business focuses on the welding industry. Although there have been many advances in welding technology over the years, arc-welding products have remained basically unchanged. For this reason, competitive advantage in the industry rarely relies upon technological differentiation. Instead, organizations have to differentiate themselves through other means, such as: price, customer service, and quality.

However, in an industry where technological advancements are rare, Lincoln's Innershield process is a notable exception to this rule. The Innershield process not only lowers welding cost, but also improve the quality and speed of the welding application.

Lincoln is faced with an increasingly competitive industry as the world becomes more globalized. In the company's beginnings, geographical location determined much of the organization's reach. Sales of products were limited by the means of travel in the late 19th and early 20th century. Today, the social phenomenon of globalization means the company has the ability conduct business without concern for geographic boundaries. "The Company has manufacturing operations, joint ventures and alliances in 19 countries and a worldwide network of distributors and sales offices covering more than 160 countries" ("About"). Currently, they continue to strive to be a global leader in the arc-welding industry ("Lincoln Electric Vision"). However, with this opportunity to reach markets in all four corners of the world, the reverse is true as well, new competitors can now more easily access Lincoln's own backyard.

The economic realities of globalization goes beyond just the affects of direct competition for Lincoln. Globalization has significantly affected Lincoln's customers as well increasing their need to continuously improve competitiveness. For this reason, even small improvements on cost efficiency or quality can equate to big profits for customers. In fact, Lincoln's mission is centered on providing the most innovative, cost-effective, quality welding and cutting solutions to their company ("Corporate").Lincoln has capitalized on this with producing one of the few technologically differentiated products in the marketplace.