Harsh Lessons From International Expansions Case Study

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If this could have occurred, it would have meant that Lincoln Electric may have avoided overpaying for certain companies. As, they could have waited for the local economy to slow and then revisit if making this kind of purchase would have sense strategically speaking. This would have helped management to focus on how to increase their overall bottom line and to see how the business itself is affected by the shifts in the economic cycle. Once this happens, it will allow executives to avoid a potential crisis based on the underlying fundamentals. As, they have a chain of accountability and various procedures to guide them. (Augustine, 2000, pp. 227 -- 235)

At the same time, executives needed to focus on if a particular purchase would have made sense strategically speaking. As, they want to evaluate the culture and philosophy of the company they were thinking about acquiring. In this case, they want to make certain that they are able to easily integrate them into their operation. This is accomplished by looking at the company objectively and studying how they can help make the business grow over the long-term. If it appears as if there may be some kind of issues, Lincoln Electric should think twice about integrating with them. However, in those cases when there is similar approach and philosophy, this is a sign that some kind of acquisition would work well over the long-term. This is important, because understanding these kinds of ideas will help us to be able to determine if this will allow integration to work. The reason why, is because executives are examining options that can increase their chances of being successful in dealing with any kind of possible challenges. As, a similar cultural and management style, will help both entities easily be able to overcome these problems. Over the course of time, this would allow managers to identify companies that are good fit for the firm. This is the point that they can be able to avoid a potential crisis in the future.

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(Augustine, 2000, pp. 227 -- 235)

Prepare to manage the crisis, recognize the crisis, contain the crisis, resolve the crisis, and profit from the crisis.

The best way to manage the crisis is: to concentrate on restructuring the debt agreements with the bank. This will help to give the company the short to medium term flexibility to deal with the issues that they are facing. Once this occurs, it will improve the firm's ability to: manage, contain and begin taking steps towards resolving the crisis. At which point, the company needs to carefully examine those business that are not profitable and do not fit in line with the strategic goals of the organization. This means selling companies that they are losing money on and are not embracing Lincoln Electric's basic philosophy. Over the course of time, this will make the firm leaner and more flexible. As it is keeping those entities, that will help to increase their profit margins dramatically. This will allow them to resolve these issues and profit from the crisis over the long-term. These elements are important, because it will to improve the financial security of the organization by analyzing these entities objectively. (Augustine, 2000, pp. 227 -- 235)

Conclusion

Clearly, Lincoln Electric needs to undergo a strategic shift in how they are dealing with the losses from the sting of acquisitions they have made. The best way to achieve this objective is to focus on: the pricing / timing of the acquisition, purchasing companies that will work well with the strategic philosophy of the organization, restricting their debt and selling those businesses that do not fit in line with these objectives. Once this occurs, it will help the firm to build their long-term profitability by identifying those companies that can increase their bottom line and share a similar philosophy as Lincoln Electric. This is the point that their underlying earnings will begin to rise dramatically and they will become a global conglomerate that is involved in business to.....

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