MegaPorpoise1555
caso studv: The consolidatino steel industry For a long time, the…
caso studv: The consolidatino steel industry
For a long time, the alcel industry was seen as a slabe and unprolitable one. Froducers
ware nationally gased. often stata owned and frequenty unorodies a between the lata
1905 and 003, more than so indesandont stool producors wont into bankruptcy in tho
USA. The rentwaret century has seen a revolution. For eyamolo, dunno 2008 Mital
Steel paid saoon E19.on Azzan to buy curopean steel pant Arcelor, creating the world’s largest steel company. The following year, Indian conglomerate Tata bought Anolo-wu.ch steel company cous for s1Jon. These high onces macaled considerable
cont tenca a being able to turn tha industry found
in the last 10 vers, two powerful groups have entered world steel markets. First, after a
period of orvatipation and rectannieation. ince Rumssin oroducens such na Sevassial
and evraz emered export markels, exporting so mision tonnes of steel by zood. As the
same lime Chinese producers have been investing in new production laces, in the
debod zwus-zoup creasing capackly as a fals of so per centa year, Since the Teaus,
Chinose share of word capachy has increasad more than two ames, to 25 per cent in
2000, and chinese producers have deceme the words tird largest expotter ust
behind Japan and Russia.
Steel is a nielcent-century lechnology, increasingy substuled for wy other malertals
such as aluminium in car. plasucs and aluminium in cackaging and caramics snd
comoostes a many moretoch apprcatons. steels own soonnoogical advancoo
rometimes work to roduce nood thus sics cans have become about one-thitd thrrie
over the last low decodes. Key buvers for sten Inciude the coon ent manuacuter
such as Ford ovois and Wokswagen, and readino can groducers such as crown
Holdings, wah makes overtrard or all food cards produced both America and
Eurone. Such companios buy in volume, coord nating purchases around the word. Ger manufacturers are sophisticatod users, often leading in the technological develogment
of hair materials The key raw mater for stae prod Joers is iron ore. The dig thine on producers – CVRD, Rio Tinto and BHP Bitton – control 70 per cent of the international market in 2005. iron ore oroducers oxoloited suroino demand ov increasino orices by
72 per cent; in 2008 they increased prices by 10 per cent.
he lndustry has ima tionally been very momented: in 2000 the worides too fam
produces accounted for only to per cent o procuction, wast steel is sold on a
commoo basis o the tonne, Prices are hiary cyclico as stocis do not cateriorate
and tend to hood the market won demand slows. In the late wentiet century demard
growth averaged a moderate? per cent par annum. The start of the twenty-first century
saw a boom in demand, diren particulany by Shinese growth. setween 2003 and 2005 prices of sheet steel for cars and fridges trebled to $600 (£336; A480) a tonne. companies such as Nuco m we use Ihyssen srupe in Gehnany 35 well as Wittal and
Tate responded by buying up weaker players internabonally. New steel dant Mittal
capacity in somo of its Westem production contres
Sowce: Adapted from Johnson Scholes Espionino corponato Susiooy a Editio
Required
(a Porters livo forces framowork was develoced as a way of analving the
changing attractiveness (profit potential of an industry. Evaluato the global staol
industry presented above usato Forters Mode
Marks)
arosucers? justily your answie orving axamples of tie Seen industry in Zamba.
(ch in the future. wat might change to make the steel aidustry less attractive c
Marks)
