Q1.does it make sense for Lincoln electric to enter India? Why?

Any
risks that should be kept in mind

Reasons to enter India Risks with entering

1. Market growth potential: India is presented with an
environment which supports the growth of their welding
industry. Entering India will present Lincoln electric an
opportunity to capture the growth that they are having.
2. Growth strategy alignment: Lincoln electric has the
strategy of expanding into economies which have a high
rate of industrial growth. This aligns with India’s
economic state of rapid industrial development and
economic growth. The macro economic nature of India is
perfectly suited for a company like Lincoln electric
1. Regulatory challenges: Upon entering India, Lincoln
electric is met with the challenge of regulatory concerns.
The India government has put in place regulations that
would increase their cost structure. For instance, their
wage and labor laws. There is also additional risk in the
uncertainty in future additional laws.
2. Domestic competition: The welding market is highly
competitive with many major key players already in
place. Going into the market will present a challenge for
a company with no presence yet. In addition, if Lincoln
electric decides to make themselves known by merging
or acquiring a local established firm, they might have to
pay a large premium and it could be hefty

Summary
Entering the market makes sense for Lincoln electric as it presents a big opportunity and potential for growth and increased
profits. However, it comes with risks that I believe can be mitigated with more intense analysis. Overall, the benefits of
entering the India market seems to outweigh the risks.
 Q2. Assuming Lincoln electric decides to enter the India, what mode
of entry should it choose: Acquisition, wholly owned greenfield, or
JV?

JV advantages Considerations
1. Knowledge transfer: a JV with a firm that has already been 1. Shared profits and control: while a JV shares risk and
established in India, would guarantee knowledge of the cost, it also shares control and profits. In the long term, if
country, it’s environment, culture and many other insider the company does eventually do extremely well, control
information that would not be so easily accessed without of the company might end up becoming a problem
a JV.
2. Strategy misalignment: it is important for both parent
2. Cost efficient: one of the large reasons why companies companies to align goals, strategy and other important
choose to partake in a JV is because of the cost sharing, decisions, it is a must to have trust and a strong
this means that the stakes aren’t as high as compared to relationship in order for the JV to work in the best way. It
going in alone. A cost efficient decision would be much is easy to crumble when one party does not agree with
suited if the company has a lower risk appetite. the other.
3. Trust in partnership: a JV is a long term commitment from
both parent firms and will promise that both companies
are committed to their goals
Summary
Entering through a JV is a commitment that Lincoln electric has to consider very thoroughly. However, given the macro
environment and the culture of the country, I believe that a JV would be very beneficial for Lincoln electric. Something that
must be kept into mind is that this JV can also be considered a short term plan, and the larger and longer goal would be to
establish themselves in the country and once established, they might consider going independent and taking full profits to
unlock full potential. A key negotiation in the JV contract is extremely important to the success of this mode of entry.