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Strengths & Weaknesses. Key Points. C ore Competencies Product mix Technical Developments innovation, technology. Customer Relations & Marketing Quality Service Operations speed Productivity efficiency Logistics Culture & Leadership Management Organization

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Strengths & Weaknesses

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Strengths weaknesses

Strengths & Weaknesses


Key points

Key Points

  • Core Competencies

    • Product mix

    • Technical Developments

      • innovation,

      • technology.

    • Customer Relations & Marketing

      • Quality

      • Service

    • Operations

      • speed

      • Productivity

      • efficiency

    • Logistics

  • Culture & Leadership

    • Management

    • Organization

    • Decision-making abilities

  • Financials


Product mix

Product Mix

  • Lincoln could solve customers’ process problems and improve process productivity with its ability to combine both equipment and consumables development needs into one integrated package.


Tech development

Tech Development

Strengths

  • Technological innovation allows the company to earn a price premium for many of its products.

    • Industry leader in new market introductions and quality performance.

    • The most aggressive, comprehensive, and successful R&D program in the welding industry


Tech development1

Tech Development

  • More than 50% of Lincoln Electric’s equipment sales in 2005 were generated by welding machines introduced in the previous five years.

  • Known as “The Welding Experts,” vs. its leading competitors who chose to diversify their resources far away from welding.

  • In 2004 began building regional engineering development centers worldwide.


Costumer relations

Costumer Relations

Strengths

  • Product support and guarantees, allows the company to earn a price premium for many of its products.

    • Customer support

    • Training

    • Consultation

    • Guaranteed Cost Reduction Program


Costumer relations1

Costumer Relations

Weaknesses

  • Geographical distance; logistics


Marketing

Marketing

Strengths

  • Strong brand identity


Operations

Operations

Strengths

  • Efficiency

    • Solutions oriented

    • Supply chain and FANUC Robotics

    • Harris Colorific acquisition

      Weaknesses

    • Maintaining operational efficiency internationally

    • Incompatible power source


Logistics

Logistics

Weaknesses

  • Local production presence


Is your unique competency a sound basis for an effective strategy

Is Your Unique Competency aSound Basis for an Effective Strategy?


Inimitability

Inimitability

Product mix

Technical Developments

Customer Relations & Marketing

Operations

Logistics

5

4

3

3

2


Durability

Durability

Product mix

Technical Developments

Customer Relations & Marketing

Operations

Logistics

3

4

5

4

4


Appropriability

Appropriability

Product mix

Technical Developments

Customer Relations & Marketing

Operations

Logistics

5

5

5

4

4


Sustainability

Sustainability

Product mix

Technical Developments

Customer Relations & Marketing

Operations

Logistics

3

3

4

3

2


Competition

Competition


Ador welding ltd

Ador Welding Ltd.

  • $50 million in sales in 2005 with a 15% operating margin, and a portion of its shares traded on the local stock exchange.

  • Cost-adjusted annual revenue growth rate at 20% over the next two years, which should continue with a return on capital employed at over 40%.


Ador welding ltd1

Ador Welding Ltd.

  • The company has shifted some production to Silvassa, a government-created tax-free zone, and by concentrating production at a smaller number of facilities Ador had realized both economies of scale as well as tax savings.

  • In July 2006 the company’s publicly traded shares were valued at 10.9x FY07 estimated net earnings per share, and EBITDA per share was predicted by the same local analyst to grow at a CAGR of 29% and net earnings per share to grow at a CAGR of 23% over the next two years.


Ador welding ltd2

Ador Welding Ltd.

  • Ador had annual sales of 241.6 crore (large values of India’s currency, the rupee, are counted in terms of crore, with one crore the same as 10,000,000 rupees).

  • The company had produced 17,217 MT of consumable welding products in FY06, and Ador had previously constructed plant lines that could produce far more than that should the market continue to grow.Ador had in FY06 paid a dividend of 15 rupees, equal to a 4% yield on the stock.


Esab india

ESAB India

  • Over $50 million in sales in 2005.

  • 18% operating margin in 2004

  • Newly Restructured

  • New $4.6 million, 50,000 square foot, greenfield manufacturing plant


Ewoc allows ltd

EWOC Allows Ltd.

  • $30 million in revenues in 2005


Smaller competitors

Smaller Competitors

  • D & H Sécheron

    • $3.5 million in sales in 2005

  • Indo Matsushita

  • Anand Arc

    • Manufactures fullrange of welding consumables

    • Claims that it produces the highest-quality electrodes in India


Competitive superiority

Competitive Superiority


Culture

Culture


Culture1

Culture

Strengths

  • Industry-leading productivity advancesthrough innovative human resource and incentive systems.

    • stock ownership

    • incentive bonuses via merit ratings

    • Employee Advisory Board

    • employee suggestion system


Culture2

Culture

  • annuities for retired employees

  • group life insurance.

  • No lay-off policy

  • The entrepreneurial spirit

    • Piecework

    • Work days

    • Merit ratings

  • Trusting relationships


  • Culture3

    Culture

    Weaknesses

    • Competent executive management

    • Synergies of acquisitions

    • Competent operational/functional management

    • Incentive and bonuses


    Financials

    Financials

    Strengths

    • 2005: operating income was $153.5 million and net income was $122 million on sales of $1.6 billion.

      Weaknesses

    • Domestic Reliance

    • Over-forecast and spending


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