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Starting in the year 1970, Mittal Company was a private entity that was owned by the
Lakshmis family in India. Slowly, the company has grown successfully by Foreign
Direct Investment and Merger and Acquisitions where it expanded to be the worlds
1. The forces drove Mittal Steel to start expanding across national borders were the fact
that the business was facing limited growth opportunities in India because they had
no great demand for steel when compared to other countries. The government
regulations of the country also constrained the expansion of the company where the
regulations restricted the company to expand across the border. The market conditions
were also not favorable for Mittal Company since the organization was facing tough
competition from both the competitors who were state-owned firm called SAIL and
a privately-owned company called TATA Steel. There was also the liquidity of the
capital market in India was limited where it would reduce the profit-making
capabilities of the company and so the company decided to expand outside the other
2. Mittal steel expended into different nations through mergers and acquisition and
opposed the greenfield investment, because mergers and acquisition is much more
cost efficient, quicker to execute and easier to manage because the company already
established, they have the customer base, suppliers and have all the large sum
equipment, so Mittal steel only need to invest the company with capital to improve
their efficiency with modern technology and increase the management skill. From this
Mittal Steel can cut cost on buying expensive equipment and less risker for them to
acquire the desired assets than building them from the scratch.
3. The benefits that Mittal Steel bring to the countries is the employment effect, by
investing in the foreign countries Mittal Steel offers job to the locals. Mittal steels
also helps the host country to achieve a current account surplus from the licensing and
the import and export of the goods. Besides Mittal steel also help the host country to
gain resources such as capital, technology and management resources. The drawbacks
are perceived loss of national sovereignty, because the government has no real
control, the Mexico stated owned company was privatized. Competition for domestic
supplier.
4. The benefits to Mittal Steel from entering different nations are better business
companies are deciding to move from home country to host country. Besides that,
entering different nations can get more business recognition. This is because brand
visibility is a major concern for the company. One of the first things to do when doing
business in another country is to establish their brand. The extra brand recognition
makes it much easier to gain customer. Lastly, help company to bring their business
back to life. Company can do a lot to bring an ailing business back to life. Finding
new customers and outlets can help company to grow their business.
5. I believe that objection was mainly due to the negative impact on the Europe
economy after the global crisis. This objection is reasonable to Accelor because want
to protect it company nut Mittal Steel wants to become successful largest steel
Mittal Steel was becoming a very successful company after expanded its business across
the border by FDI and merger and acquisition. FDI has promoted to Mittals effective
economic growth because it played a crucial role in the growth of the business. The
company took one of the best decisions to acquire merger and acquisition with other