GLOBAL BUSINESS ENVIRONMENT CASE STUDY

Global Business Environment Case Study



Global Business Environment Case Study

Introduction

Mittal Steel is headquartered in London and is the Majority owner Lakshmi N. Mittal and his son Aditya directed. Mittal Steel employs approximately 220.ooo employees and in 2005 had Sales of 28.132 billion U.S. dollars. In 2004, 48 million tons of steel produces more than the nearest competitor, Arcelor (45 million tons) and Nippon Steel (31.3 million tons). The Luxembourg-French-Spanish Arcelor Mittal still exceeded with an annual turnover of 37 billion in 2004. On 27 January 2006 was an offer from Mittal to shareholders of competitor Arcelor in the amount of € 18.6 billion announced. The attempt of the takeover of Arcelor however, met also with the governments of Luxembourg, France and Belgium considerable resistance. After much negotiation it was finally in August 2006 so far, Mittal Steel and Arcelor agreed to a merger of equals. After this merger the new company is now a Production volume of around 119 million tons of steel per year, far Distance as the largest steel producer in the world (Sudarsanam,2003,98-111).

Question 1

Mittal Steel started a family business in India in 1970. However, since the limitation provisions and strong competition for state-owned enterprise, SAIL, and large private Tata Steel, Mittal Steel felt the best prospects for growth have been outside India. In 1975, Mittal started its first foreign company to build a factory to manufacture steel from scratch in Indonesia.

This affair, and the strengthening of the Mittal on the European market, especially after taking control of ironworks and steelworks, caused anxiety and fear among competitors, as well as in government circles of European countries with Germany and France leading the way. In the second half of 2004 was unheard of previously in speeding up the acquisition of metallurgical plants. In Romania, the company got under the control of Mittal and with it the Hunedoara steel plant (also with its own port on the Danube) by production capacity of 800 thousand tons of steel per year (Sudarsanam,2003,98-111).

In Macedonia, Lakshmi bought two rolling mills sheets in Skopje, each with a capacity of about 800 thousand tonnes per year. After buying American steel company International Steel Group for $ 4.5 billion, Mittal after defeating the competition enters the U.S. market. This facilitated further expansion and globalization the company and gave rise to reorganize. In December 2004, Ispat International links from Lakshmi Narayan Mittal (LNM) and thus created a new company under the name Mittal Steel. At the same time broadened the scope of the company areas such as transport, production of electricity, mining and distribution (Sudarsanam, 1996,98-125).

It is worth recalling that the International Steel Group is the direct successor to Bethlehem Steel, combining with the century-old tradition, which provided steel parts and cables for the construction of several famous bridges including the Golden Gate Bridge. Subsequent problems have weakened slightly following the acquisition rate of industrial buildings. Therefore, in the only asset of 2005 there were two steel plants in Germany, formerly belonging ...