Competitive advantage of arcelor mittal economics essay

As a result, a variety of different firms have been establishing operations around the world to deal with these underlying challenges. The party that controls the majority of Parliament will chose the Prime Minister to serve as Chief Executive.

ArcelorMittal PESTEL & Environment Analysis

Only time can tell if this new structure will continue the success that the old structure brought to Nucor. New products will also reduce the defection of existing customers of ArcelorMittal to its competitors.

Acquisitions are generally conducted between unequal partners, as here one of the party buys subsumes another party and the target company is integrated into the corporate group of the acquirer.

It not only attains the entire five operations performance objective, but also acts as a competitive multinational company. At the same time, the company has been diversifying into others areas most notably: The steel industry is still trying to recover from bankrupt companies.

Because countries are both assumed to be the same size in the example, this indicates that the US has an absolute advantage in the production of both goods. Bargaining Power of Buyers Buyers are often a demanding lot.

Recruitment methods are based on mouth to mouth and on-site applications, resource to local newspapers. Secondly and most importantly Arcelor had already begun to respond to the deal by taking potshots at Mittal as a person as well as the corporate governance of his company.

It is important to note that a comparative advantage is not the same as an absolute advantage. Comparative advantage takes into account the opportunity cost of specializing in one activity over another.

ArcelorMittal Porter Five Forces Analysis

As energy prices increase, raw material prices will increase in both base price and transportation prices. This shows the culturally-superior mindset in Continental Europe that even prevailed in purely business decisions, and acted as one of the takeover barriers in the region.

Structural barriers are part of the institutional setting such as the influence of banks, the ownership structure and the size of the equity market. There were bitter recriminations too from Arcelor, undermining Mittal steel. While Severstal was already linked with Arcelor via technical agreements and shared investments, the deal was generally considered to be inferior to Mittal and became a turning point in the merger between Arcelor and Mittal.

ArcelorMittal has to manage all these challenges and build effective barriers to safeguard its competitive edge. While corporations in the United Kingdom and the United States stand out as having more widely dispersed ownership than those in the rest of the world, but there is also considerable variation in ownership concentration within continental Europe.

According to the Datamonitor Company Profile, US Steel teamed up with Nucor in to work together to explore new technology in hopes of reducing the cost and pollution from steel making.

Labour is perfectly mobile within the same country, but perfectly immobile between countries. Nucor is well known for their trademark employee incentives and benefits, which allow their employees to be one of the highest paid groups for their jobs in steel production.

Ultimately it was the shareholders who forced the management to consider the Mittal deal, even though they were extremely reluctant to do so.

In essence we assume that consumer demands are such as it to make the chosen production point. Do not show feelings or emotions as part of your business. That is to say a merger is a generic term employed for a full and final coming together of two previously separate corporations or commercial interests.

Nucor must maintain and expand their position in new markets and continue to improve environmental standards in order to stay ahead of US Steel in the steel market. The case study talks about Iverson being a very good leader with an entrepreneurial spirit that gave him the courage to take a lot of risks.

We are committed to doing this while being cultural and environmental stewards in our communities where we live and work.

Currently, foreign markets are also dominating the global market of steel, and the number of domestic steel producers is falling as they are being bought out by international companies. This is just one of the examples of Nucor reducing costs for both themselves and their customers, thus adding value to the business, and keeping them superior to competitors.

The so-called concerned of the Arcelor management team and French government in general and the Arcelor CEO Guy Dolle in particular, were superficial to say the least. Combing these two styles was definitely a challenge, one which Dolle found and also vocally expressed as unsurmountable.

Ricardo believed that gains from trade could occur if countries start with specializing in their comparative advantage good and then trade with the other country. Needless to say the different terms are used in different contexts, and are based on the reasons why a particular merger or acquisition takes place.

The governments of Luxembourg and Belgium, which both own a slice or Arcelor, expressed doubts about the approach. Luxembourg has benefited greatly from openness to foreign investment flows and maintaining a business friendly regulatory environment.

Nucor is constantly creating value by looking to new ways to cut corners, which keeps them equivalent to competitors. In fact some of the pre-supposed barriers like the cultural differences, the shareholding mechanisms and the role of governments hardly seemed to deter Mittal from going right ahead and forging the deal, despite the stiff opposition.

These long-run scale economies provide regions and countries with a significant advantage. As an example, the Japanese entry into the United States frequently supposes a historical pattern of competition based upon an initial transfer of a comparative advantage in exports coming from from low wages, and a later transfer of a competitive advantage in the form of exporting by or investing overseas in production which is intensive in terms of capital at minimum efficient scale.

Incentives are based on group performance, which motivates everyone to work together. The strategy of vertical integration is divided into upstream and downstream integration. ArcelorMittal, Economics Words | 3 Pages. G Objective: This study has multiple goals: 1. To find out if Tata Steel does enjoy a competitive advantage vis-à-vis other players in the Steel industry in India.

2. To ascertain the source of this competitive advantage.

The Mittal Steel Case

3. Find out if this competitive advantage is sustainable. Lakshmi Mittal and the Growth of Mittal Steel For MGMT International Business Submitted by Djenane Jeanty Mittal Steel was able to avoid delay and take advantage of the benefits that come with a recognized market presence.

Essay on Arcelor Mittal - a Take over Story. Comparative Advantage and Strategy The design of international strategies is structured on the interplay between the comparative advantages of countries and the competitive advantages of firms.

These two advantages determine the answer to the two principal questions in international strategy. Competitive advantage refers to the strategic advantage that a firm has over its competitors. Attaining a competitive advantage reinforces a firm placing it in a prime position within its business environment.

Competitive advantage is realized, when a firm gains an aspect or a collection of aspects permitting it to do better than its rivals.

Essay about Arcelor-Mittal Case Study Words Sep 26th, 17 Pages CASE STUDY ARCELOR-MITTAL MERGER: CHALLENGING INTEGRATION OF TWO STEEL GIANTS’ ORGANIZATIONAL IDENTITIES Preamble In the aftermath of one of this century's most remarkable mergers, we find two different cultures, two different worlds, thrown into one of history's largest.

ArcelorMittal supplies 45 percent of its own iron ore, which again is the main ingredient and 20 percent of its own cooking oil.

So they supply a nice amount of there own inputs so they don’t have to purchase from outside sources which increases total cost.

Competitive advantage of arcelor mittal economics essay
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