Euromed Marseille
Ecole de Management
Global Strategy
Case study #2
The global steel industry
Professor: YAMI Saïd
Group:
Simon BEIMEL
Aldric CHARLES de GEUSER
Jun XU
Xiaoyue YANG
Shidong DIAO
Summary:
1. General features of the market
2. Porter’s five forces model
3. Segmentation of the market
4. Key Success Factors
5. Competitive systems
1- General features of the market
1.1 The steel value chain
There are different raw materials involved in steelmaking. The materials used depend on the forging process, there are two main types:
1. Oxygen steel making requires Iron ore + Carbon + Electricity
2. Electrical arc process: requires (Recycled) Steel + Electricity
The steel then is processed by seven main consumer groups:
Ordered by % of total steel consumption:
• Construction and public works’ industry (43% of total steel consumption),
• Mechanical construction (22%),
• Automotive industry (19%),
• Oil and gaz industry (5%),
• Packaging industry (4%),
• Shipyards (3%), and
• Railway industry (2%).
Thus, we can represent the steel value chain like this:
[pic]
1.2 The supply side
The supply side is rather concentrated: 55% of the coal market share is held by 5 companies. For iron ore it is even worse, as 69% of the iron ore market is shared by 3 companies. These are thus highly concentrated markets.
For electric arc processing one has to recycle steel. The main su ...