Mittal Steel

Mittal Steel

Introduction

The closing case is related to the real case study of Mittal steel where it grows from a small family business to the world's largest steel company. The headquarters of Mittal Company is in Luxembourg. The growth strategy of Mittal Steel was to acquire the distressed companies at low prices where Mittal Steel aimed to improve their efficiency and capitalized to increase the demand for steel. The growing power of Mittal Steel in the industry was used to decrease the prices of raw materials of steel. For the creation of ArcelorMittal in 2007, Mittal Steel acquired European steel maker Areclor which was obtained through a aggressive invasion. Mittal Steel has a net income of about $10.2 billion with its annual sales of about $110 billion. (lawinfo.com)

Closing question

Answer 1

Mittal Steel began in early 1970s as a family operation in India. Mittal steel felt that its future prospects are outside India. The reasons were that first there were heavy restrictive government regulations. Another reason for foreign prospect was heavy and strong competition within the country. The competition was from a state-owned firm, SAIL, and large, privately-owned Tata Steel. A steel making plant was constructed in Indonesia from scratch in 1975 as the first foreign venture.

Answer 2

The majority of expansions made by Mittal Steel are done through mergers and acquisitions. The time when Mittal steel was expanding its wings in the foreign countries, the overall steel industry was facing twenty-five year slouch and loss was faced by many companies. It was a belief of Lakshmi Mittal, CEO to put investment, capital and shift in the companies which are facing loss. He believed that with proper investment of capital and shifting the efficiency the variable operations can be improved in a great deal. Many students believe and suggest that investing in ...