Analysis of growth and opportunities in the US market for Arcelor Mittal
"Arcelor Mittal has been fighting a winning battle in the US market over the past few years. The company has been facing a very stiff competition from a lot of the established players like ThysenKrup, Posco and others. The industry is also in a state of upheaval given the constant changes in the industry and the price iteration in the steel industry. The company has also been experiencing a lot of adaptability issues in the North American market. The integration of the two largest entities of steel has been vastly successful in the other areas. But, it has achieved the same level of operational efficiency in the American scenario; this can be attributed to the differential working culture in the US.
The company has reported a rise of around nine percent in the revenues, as compared to the last fiscal. This figure has not been satisfactory: given the fact that the other competitors have shown almost two figure growth. This anomaly can be rectified with the proper advertising techniques as well as the appropriate market segmentation. The market has been experiencing post recession shocks, but the growth figures have also picked up. The industries in the US account for almost five percent of the annual steel consumption. The figures seem to have tapered over the period of time. There are a few factors that are working in favour of Arcelor Mittal. There has been a regaining of the previously existent momentum. The US arm of the steel major is looking to cash in on this success. The inventory is an area of concern that needs to be sorted out. The inventory turnover ratio is very low. The ratios of liquidity also show certain problems. One of the problems is the aggravating NPA (Non performing assets), the other is the bad state of the liquidity ratios. The number of the captive production centres has to also be increased to tide over the problem. The consumption figures of the crude oil show an estimated 16.7 percent rise. This is a colossal increase in the figures of the period of that time.
The other change that has happened is the technological changes in the field. The companies like Posco are coming out with cheaper means of producing steel. This would also act as a competitive advantage in the future of the steel industry. The US steel industry is booming, which by all means serves is the perfect foil for the goliath of steel industry to grow. "