Mittal Steel in 2006: Changing the Global Steel Game Case Study Help
Mittal Steel Co. is a family owned company. Currently, Laxmi Niwas Mittal (LNM) is the chairman as well as the CEO of the company. Mittal Steel Co isone of the world’s leading steel companies, which started its business in the steel industry with the merger of LNM holdings and ISPAT international(Pankaj Ghemawat, 2012). The Mittal Steel Co. has its headquarters at Rotterdam Netherlands. The company is ranked as one of the largest producers of raw scrap steel. It is because LNM did not believe in the old methods of producing scrap steel. He introduced 65,000 tpy DRI (Direct reduced iron) technology in order to produce the best quality steel. With time, DRI technology had an improved and became reliable.
As the company had been growing and creating a demand in the market, LNM went for mergers and acquisitions. He firstly acquired one of its major suppliers: DRI supplier Iscott with a 10-year lease at $11 million annually. Then, he became successful in hiring 55 DRI experts from all over the world. Through this way, the company became successful in providing competitive quality steel nationally and internationally. Today, Mittal Steel Co. is a vertically integrated business chain from a large iron ore mine to the finished steel, whichhas provided the company with a sustainable competitive advantage.
The management of Mittal Steel Co. is considering a change in the steel industry by doing cross-border consolidation. For the sustainable comparative advantage; the company has changed the landscape of steel industry by availing the opportunities of international acquisitions. The case study highlights that how Lakshmi Mittal had bought the idea of global integration. In addition to this, being the world’s well recognized steel company;it is evaluating how it can maintain its position of adding value to its ongoing operations.
GROOW Analysis is one of the imperative methods, which is widely used in setting goals and solving the problems of the organization. On the basis of such analysis, alternative options are examined. This analysis has five components, which are: Goals, Realities, Obstacles, Options and Way forward(Team, 2015). The goals of the Mittal Steel Co. are discussed in details below:
This is the very first component of the GROOW Analysis,which deals with setting the goals of the organization, because goals decides the target of the company where it wants to be in the future. This analysis enables the managementto improve the strategic decisions. The competitive goals of Mittal Steel Co. are briefly discussed below:
To transform the steel industry via global or cross-border integration, so that the steel industry could become competitive and deliver the best quality products.
To become one of the world’s largest producers of steel, while never compromising on quality, sustainability and leadership.
To improve the labor productivity by 5% each year, up to 2010.
To enhance the production capacity to 130 million tons.
To be the vertically integrated value chain in the steel industry from mining to distribution, because of an efficiency in the key ingredients for the Mittal Steel Co.
To become first in increasing the capacity level from 80-100 million tons, under the vision of global consolidation.
To become the carbon-neutral steel producer to reduce the carbon emissions.
To have the large scale and worldwide presence in order to provide competitive products and increase the customers’ demands.
To focus on value creation and to import modern management techniques in order to bring an efficiency into the acquired operations.
To grow rapidly in a way that provides profits on the monthly basis rather thanannually.
To pursue an excellence in operations of all the business processes.
To move beyond what the world expects from steel, by having visionary thinkers and opportunity creators.
To become a smart dealmaker while making good relationships before mergers and acquisitions.
To be capable of having technical expertise that would not be available to any other player
To have a diverse portfolio of steel and related diversification, mainly of steel.
To be sound in financial capabilities for dealing acquisitions and mergers.
The second component of GROOW’s analysis is reality,which indicates that where the company is right now. It highlights that whether the company has achieved it set goals or not. If not, then what kind of challenges the company is facing and how far the company is fromachieving its goals. A detailed analysis of Mittal Steel Co. is discussed below, which highlights whether the company has achieved its goals or not…………………………..
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