Severstal strategic analysis
External environmental analysis
Porter’s five forces
Yips globalisation strategy
Industry life cycle
Severstal acquisition activities
This assignment is based on one of the biggest steel company in the world it is known as Severstal. This company was founded in 1955 by Cherepovets steel mill and remain under soviet government ownership until 1991. In 1993 Alexel Mordashov became owner of this company and registers the company name as Severstal in Russia. After the privatisation it becomes one of the international Russian companies with overseas export and ownership of foreign assets. And they also listed in LSE and RTS stock markets. They own production in Canada, US, and Europe. Severstal is one of the leading steel manufacturers in Russia. It consists of six segments such as Kolpino processing service Centre, metal ware, pipes, trading and services, steel and scraps procurement In 2008, Severstal became third biggest steel producer in Russian and 14 in the world, and the revenue reaches to US$ 22.4 billion. In same year they decided to change company structure by making three divisions such as Severstal international, Severstal Russian steel and Severstal resources. These changes improved their profit in the world. In 2007 they also established gold business in the world. In 2010 Severstal improve their leading position in Russian market. However, they are famous for their high value added products such as galvanized sheet, cold rolled and pipes. However, the company got 10 boards of directors and 5 are independent director including chairman. Finally, this research will examine the company strategic performance and tell us detail information of the company including its environmental factors and financial performance in the world.
EXTERNAL ENVIRONMENT FACTORS:
Macro environmental factors will critically analysis the company external factors through it’s broadly frame work such as pest analysis. This framework will help to know about the company environment in the world. Political factors:
* Government are establishing new trade barriers for all that can have negative or positive impact on their business. * Other political factors which can affect their business are adverse impact on business, such as operational results and financial impact. * Severstal investment policy can have regional political risk. * All majorities of production and operations are taking place in other region and countries with stand able political and social system. Economic factors:
* Slow rate of economic growth can affect Russian economy. * Recession can reduce demand of all raw materials such as oil, gas and metals that leads to loss for the company. * Increased in inflation can decline production and increased unemployment in the country. * Increased in oil price can lead to slow down in world economic growth and reduce demand of steel in the world.
* Social corporate responsibility.
* Changes in employment laws and labour can affect on their business. * Significant attentions and following social rules of government can lead company growth in future. * Creating employment satisfaction and fulfilment of employee working potential can develop good relationship with labour. Technological factor:
* New technology and innovations is required to develop the market position. * Implementing new techniques methods for development
* Creating new types of steel alloys such as construction products of building. * Better services, quality and technology for manufacturing and production. Porter’s five forces...