Lincoln Case

I believe that Lincoln Electric should go with the investment in Indonesia because of several reasons.

First of all, Indonesia has a population of 214,000,000 which stands for a serious number of consumers. Additionally, the Indonesian market is large in terms of welding products, the demand is high and the country is growing and will need much more developed machines in the future.

Then, the rivals in Indonesian market are not that strong. The two multinational companies have distributor problems and the other local firms serve products of lower quality.

Following that, Lincoln's reputation is well established in Indonesia and consumers can easily switch to Lincoln if the firm maintains a competitive price.

Next, the regulatory environment in Indonesia is rapidly improving and even 100% foreign ownership of manufacturing ventures is now permitted.

After that, the natural resources of Indonesia is very rich, the workforce is competitive, the location of the country is strategic, the nation is in favor of change and reform, government is committed to provide a good business and investment climate, Singapore & Japan are also highly investing in this country and finally the culture is diverse.

For the entry strategy, Lincoln must enter the Indonesian market with a joint venture partnership. Because it's better in terms of local language skills, helps understanding the local culture, risk is shared, support will be gained in dealing with government regulations and understanding of local competitive environment, it prevents over-competition, lowers the cost of capital, provides access to new customers, provides access to valuable natural resources, helps achieve lower costs, perfect for capitalizing on resource strengths and good to gain scale economies in production and marketing.

Then, the best joint venture partner should be SSHJ since they work more professionally, have more experience and perform a much stronger financial condition.

After that, regarding the incentive system, in my opinion the traditional management system of Indonesia must be implemented since it's a better match for their culture and will reduce the risk on this issue.

Overall, Lincoln Electric should go for the Indonesian investment with the joint venture partnership strategy by using the traditional Indonesian management style. However, Lincoln should implement this strategy with a small-scale first, going slowly. The financial strength and the big scale of Lincoln Electric enables it to spread the risk of this investment unlike most of its rivals, this advantage must be definitely used.