Arcelormittal porter 5

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Arcelormittal porter 5

Threat from Substitute Products Rivalry Arcelormittal porter 5 the existing players.

Arcelormittal porter 5

Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. ArcelorMittal has to manage all these challenges and build effective barriers to safeguard its competitive edge. By building economies of scale so that it can lower the fixed cost per unit.

Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as ArcelorMittal keep defining the standards regularly.

It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry. Suppliers in dominant position can decrease the margins ArcelorMittal can earn in the market.

Brief overview of ArcelorMittal

How ArcelorMittal can tackle Bargaining Power of the Suppliers By building efficient supply chain with multiple suppliers. By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.

Developing dedicated suppliers whose business depends upon the firm. One of the lessons ArcelorMittal can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.

Bargaining Power of Buyers Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on ArcelorMittal profitability in the long run. The smaller and more powerful the customer base is of ArcelorMittal the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.

This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.

By rapidly innovating new products. Customers often seek discounts and offerings on established products so if ArcelorMittal keep on coming up with new products then it can limit the bargaining power of buyers. New products will also reduce the defection of existing customers of ArcelorMittal to its competitors.

Threats of Substitute Products or Services When a new product or service meets a similar customer needs in different ways, industry profitability suffers.

For example services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

By understanding the core need of the customer rather than what the customer is buying. By increasing the switching cost for the customers.

Rivalry among the Existing Competitors If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry.

This competition does take toll on the overall long term profitability of the organization.

Arcelormittal porter 5

They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail ArcelorMittal 's managers can shape those forces in their favor.For ArcelorMittal, a company long involved with philanthropy around the Region, sponsoring STEAM programs and working with the United Way of Porter County is a perfect fit for this major manufacturer.

Apr 23,  · These African business leaders, empire builders, moguls and high-flying chief executives of multinational corporations wield the most widespread influence in Africa’s business and .

[su_column size=”3/4″] Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World’s Most Famous Investor. The last contract was negotiated in , when imports were at a near record high, steelmakers were hemorrhaging money, Indiana Harbor Long Carbon in East Chicago was idled indefinitely and 12, ArcelorMittal reported a % year-on-year jump in its second-quarter earnings in a financial statement released on Wednesday August 1, because of higher steel prices.

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Arcelor Mittal - Five Forces Analysis - WikiWealth