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China’s Steel Industry - Porter’s Five Forces Strategy AnalysisPublished by: Aruvian's R'search Published: Jun. 1, 2009 - 20 Pages Table of Contents
AbstractAfter China adopted in the late 1970s the policy of economic reforms, its annual output of major steel products was increasing at high pace, with a particularly pronounced growth during the 1990s. China's steel industry has been the fastest growing in the world over the past two decades. Chinese steel industry includes companies that manufacture and/or distribute steel, including plates, sheets, strips, rods, bars, and tubing. Pig iron is the main raw material used in the production of steel. China is the world's largest steel-producing country and is also a substantial importer. Directed by the government's macro control policy, the development of China's iron and steel industry is now in good shape. Steel price hike, a product of the country's decadelong economic boom, has also drawn large amounts of funds into the industry. Most of the country's steel giants now are state-owned enterprises.China's industrialization is the natural driver for its steel industry. The industrialization process has gradually entered a new era, under which its heavy industry is playing the dominant economic role, driven by natural market demand forces from industries such as construction and automotive, rather than by the central government's planned economy dictates. As the economy of China has grown at the rate of 9.5% per year and the construction and manufacturing sector have been booming, the demand for steel in China has increased considerably. Everyone from shipbuilders and container manufacturers to carmakers and the construction industry need more and more steel. Aruvian Research analyzes China’s Steel Industry in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace. Get Full Details About This Report >> |
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