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Summary

Starting in the year 1970, Mittal Company was a private entity that was owned by the

Lakshmis family in India. Slowly, the company has grown successfully by Foreign

Direct Investment and Merger and Acquisitions where it expanded to be the worlds

largest steel company.

1. The forces drove Mittal Steel to start expanding across national borders were the fact

that the business was facing limited growth opportunities in India because they had

no great demand for steel when compared to other countries. The government

regulations of the country also constrained the expansion of the company where the

regulations restricted the company to expand across the border. The market conditions

were also not favorable for Mittal Company since the organization was facing tough

competition from both the competitors who were state-owned firm called SAIL and

a privately-owned company called TATA Steel. There was also the liquidity of the

capital market in India was limited where it would reduce the profit-making

capabilities of the company and so the company decided to expand outside the other

better national economies.

2. Mittal steel expended into different nations through mergers and acquisition and

opposed the greenfield investment, because mergers and acquisition is much more

cost efficient, quicker to execute and easier to manage because the company already

established, they have the customer base, suppliers and have all the large sum

equipment, so Mittal steel only need to invest the company with capital to improve

their efficiency with modern technology and increase the management skill. From this

Mittal Steel can cut cost on buying expensive equipment and less risker for them to

acquire the desired assets than building them from the scratch.
3. The benefits that Mittal Steel bring to the countries is the employment effect, by

investing in the foreign countries Mittal Steel offers job to the locals. Mittal steels

also helps the host country to achieve a current account surplus from the licensing and

the import and export of the goods. Besides Mittal steel also help the host country to

gain resources such as capital, technology and management resources. The drawbacks

are perceived loss of national sovereignty, because the government has no real

control, the Mexico stated owned company was privatized. Competition for domestic

supplier.

4. The benefits to Mittal Steel from entering different nations are better business

environment. Some countries are notoriously anti-business. That is why more

companies are deciding to move from home country to host country. Besides that,

entering different nations can get more business recognition. This is because brand

visibility is a major concern for the company. One of the first things to do when doing

business in another country is to establish their brand. The extra brand recognition

makes it much easier to gain customer. Lastly, help company to bring their business

back to life. Company can do a lot to bring an ailing business back to life. Finding

new customers and outlets can help company to grow their business.
5. I believe that objection was mainly due to the negative impact on the Europe

economy after the global crisis. This objection is reasonable to Accelor because want

to protect it company nut Mittal Steel wants to become successful largest steel

company in the world.


Conclusion

Mittal Steel was becoming a very successful company after expanded its business across

the border by FDI and merger and acquisition. FDI has promoted to Mittals effective

economic growth because it played a crucial role in the growth of the business. The

company took one of the best decisions to acquire merger and acquisition with other

companies across the nations.