Mittal Steel 2006 Essay

706 Words Nov 6th, 2012 3 Pages
By 2006, Mittal Steel was one of the top producers of steel in the world. They earned their place within the industry by acquiring smaller steel companies and set standard practice as to how they acquire and manage these companies. These standards changed how business is done in the steel industry. These changes have produced consolidation, better efficiency, and restructuring, which has allowed Mittal to profit as global producer.
Before Mittal Steel, most steel companies produced steel for their regions and many were losing millions of dollars yearly. Even though there was a need for steel all over the world, the shipping and tariffs cost were too high to provide services to international customers. Mittal saw an opportunity to
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Mittal decided to seize this opportunity to solve their problem with a regional supplier (Marketing Opportunity, Kotler, 50). Mittal purchased Iscott to solve their own demand problem and capitalize on selling products that are in the steel industry supply chain (vertical integration). By injecting their management and standard practices into Iscott, not only did they generate sales volume and income for the Mittal, but it also opened up them up to a new market (Integrated Growth & Value Creation, Kotler, 39)
When Mittal was interested in acquiring a target, a team of manager specializing in making deals for the company would visit the target to investigate and test their assets to make sure they are feasible. They would also hold discussions with the management of the target to get a feel of their expectations. This type of due diligence would help Mittal define any problems that were within the target company. In the next step, Mittal would work with the target to develop a 5 year plan for the target to help the target succeed. If the target approves the acquisition, Mittal moves into a restructuring phase.
Mittal Steel developed a strategy which is referred to by some as the “Mittal Method”. After the acquisition of the company, Mittal would insert a team of managers that would be responsible for meeting the goals of the new company. Next, they

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