Mittalsteel

CONTENTS

Introduction

This assignment is based on the case study of Mittal Steel. The case illustrates how Mittal Steel from a domestic India company and through mergers and acquisition across national borders to became the world largest steel maker. The following five questions are answered based on the case study.

1. What forces drove Mittal Steel to start expanding across national borders?

Mittal Steel origins from India and before the expansion across national borders, they were faced with limited growth opportunities. The local regulations constrained Mittal Steel’s expansion opportunities and at the same time facing strong local competitions from SAIL (state-owned) and Tata Steel (Hill, 2016).  In order for them to expand, they have to bring their business across to national borders.

Factors driving global expansion

Domestic factors can push local companies to expand overseas. In this case, the first factor would be competitive pressure. SAIL is a state-owned company, and as a state-owned company, they have advantages ranging from tangible incentives to latent convenience such as access to state funds, business opportunities and resources (NGUYEN, 2015). Furthermore, as state-owned, SAIL would have priorities over other private companies in terms of government projects.  Tata Steel on the other hand is a private national champion at that point in time. Therefore there was very strong competitive pressure and very limited growth opportunities.