Case Study of Lincoln
Autor: maple7106 • November 6, 2016 • Course Note • 782 Words (4 Pages) • 890 Views
Case Overview
Strategy
林肯：1。战略风险 2。金融风险 3。外部风险
事件： CG , crisis, culture
要海外扩张，在美国亏欠
因为没有注意欧洲市场 美国市场的差异化
文化不同的地方， 策略要考虑到不同的文化
CG ： 政策 open communication & incentive system
从non-independent 走向independent
之前是CEO 任命 后来董事会吸收了很多有海外管理经验的人来
Reputation risk 解决： 宁可问银行借钱也要给员工足够好的福利，保持住value culture
解决了这个crisis
Founded in 1895 in the U.S. by John C. Lincoln
Core product: Arc welding products
Core competencies:
High quality products
Competitive prices
Outstanding customer service
Competitive advantages:
Incentive system
Unique culture of open communication
Global expansion in 1986.
$325M within 5 years to Europe, Japan, and Latin America almost all of them were a failure.
In 1992, Donald Hastings, new Chairman& CEO quarterly consolidated loss = $12M.
Struggle to pay off the annual incentive ($50M) to the U.S. workforce and be in debt.
Finally, L.E. survived the crisis in 1994.
II. Risk Management Issues (Risk 分类)
- External Risks
Europe Recession
• Spain economic downturn
Europe Political Shock
• German reunification
U.S. deep economic recession in the early 1980s.
Fierce competition by foreign firms; especially, ESAB.
Anti-trust Laws
Global expansion policy in 1986
2. Strategic Risks
(1)Rapid expansion without proper assessment
Process Dependence in Building a Profitable MNC
Pace: how fast
Rhythm: regularity of expansion program
Geographical & Product Scope: dispersion just because the competitor was there
Global market risk, three mistaken assumptions
• The incentive system could be transferred abroad
• workforce could be quickly duplicated
• U.S products could not export to Europe countries
Only rely on low cost and high quality product
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