1. What Forces drove Mittal Steel to start expanding across national borders? With the emergence of free market economies Lakshmi Mittal understood that if his company couldn’t grow in India he could grow globally. In India his growth was limited due to a combination of regulations and internal competition from a state owned rival, SAIL and a private national champion Tata Steel. Ultimately, if Mittal didn’t find a way to grow they faced being forced out of business or being bought by one of their competitors. Lakshmi envisioned that his company could be a major player in the world steel industry that he believed was poised for an economic turnaround.
2. Mittal Steel expanded into different nations through mergers and acquisitions, as opposed to greenfield investments. Why? According to the text t Mergers and acquisitions are quicker to execute than greenfield investment considering the predicament Mittal Steel was in; this was one of the most important decision made. Mittal Steel entered into foreign expansion at a time in which the steel industry was in the middle of a 25 year slump. This had caused many other steel companies to become distressed and in some cases go under. However, Lakshmi Mittal saw value in the weak state of these firms. He believed with an injection of capital, they could move towards greater efficiency. On the other hand, Greenfield Investment took a different more costly approach.
3. What benefits does Mittal Steel bring to the countries that it enters? Are there any drawbacks to a nation when Mittal Steel invests there? Mittal Steel brought several benefits to the countries that it enters. Its presence in the market is beneficial as it focuses on acquiring and improving distressed companies. These acquisitions also help contribute more capital to each country. However, there are also some drawbacks. In Mittal Steel’s most recent acquisition of Arcelor, there were many concerns. European politicians opposed this...
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