cost objective which drives most American companies, it has permitted Lincoln Electric to solidify its position within its selected product areas (Standard & Poor's, 1991, p. 4215). The major threat to the company of this approach is that substitute processes for users of welding equipment will be developed, and that Lincoln Electric may one day be, so to speak, the purveyor of the best biplane in existence in a market where 99 percent of the customers are demanding jets.
The Lincoln Electric Company does not have problems, in the sense that most firms had problems. The company's arc welding products are considered to be industry standards. Thus, the company has, for years, been spared the task of being called upon to prove itself in the market place, and the quality of its products has enabled Lincoln Electric to maintain a commanding presence in its markets.
The company's preeminent position in its markets has led to two developments, for which some analysts criticize the company. First, Lincoln Electric's expenditures on research and development effort are lower than those of most of its competitors. Favoring the company in this context is the fact that major technological breakthroughs are not anticipated in arc welding. Second, the company does not pursue growth through marketing innovations, such as extending its product lines, and expanding its marketing base. With the demand for its existing products expected to continue a steady growth, Lincoln Electric sees no need to extend its product lines. On the other hand, the company points to its agreement with Norweld Ltd., a European Company, as an example of a strategy designed to expand its marketing base. While the company was represented in Western Europe before its agreement with Norweld, it expects its presence in Western European markets to be expanded significantly through the operations of Lincoln Norweld.
Lincoln Electric has, for years, pursued a ...