...1. DO YOU THINK THE BAOSTEEL GROUP SHOULD CONSOLIDATE ALL OF THE GROUP’S ASSETS INTO A SINGLE PUBLICLY-LISTED COMPANY OR REMAIN A TWO-TIERED STRUCTURE? To be able to argue whether the Baosteel Group should consolidate the entire Group’s assets into a single publicly-listed company or remain a two-tiered structure one first needs to review the underlying situation, Baosteel was faced with. In order to stay competitive on the increasingly fierce global steel market Baosteel was required to not only advance in technology but also to increase its output. To reach its aggressive targets, Baosteel continued its quest for domestic acquisitions. In 2008 Baosteel set up a new company which was authorized to oversee two existing state-owned enterprises: the Shaoguan Iron & Steel Group and the Guangzhou Iron & Steel Group. Each of the two enterprises controlled a listed subsidiary. By acquiring these two companies Baosteel Group could increase its output as the new company had the permission to build a new 10-million-ton steel-making base in Zhanjiang City. The new base in Zhanjiang City was promising as it would solve the lack of steel-making facilities in Guangdong, save money due to the shorter distance to Australian iron ore sources and face a ready market with Honda’s and Toyota’s manufacturing facilities demanding their flat rolled steel. They needed, however, to modernize the enterprises, eliminate the obsolete capacity and shut down environmentally critical operations. ...
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...Baoshan Iron & Steel Co. Ltd.: Crafting a Three-Way Cross-Border, Cross-Shareholding Alliance in Asia 1. What is the strategic position of Baosteel and what are its motives for negotiating a three-way cross border, cross-shareholding alliance? - Market leader for steel. - Largest Subsidiary of Shanghai Baosteel Group Corporation Motives for negotiating a three-way cross border alliance is to become one of the strongest steel conglomerates in the world. It would also help Baosteel meet the challenges arising from economic globalization and China’s WTO entry. Cross-shareholding is more significant but also more risky than a simple alliance. 2. How does a cross-shareholding alliance differ from a merger or a simple strategic alliance based upon co-operation? Cross-shareholding: A situation in which a publicly traded corporation owns stock in another publicly traded company. So, technically, listed corporations own securities issued by other listed corporations. Cross holding can lead to double counting, whereby the equity of each company is counted twice when determining value. When double counting occurs, the security's value is counted twice, which can result in estimating the wrong value of the two companies. Merger: The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Strategic Alliance: SA is a kind of partnership between...
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...DaDanieli Far East, Thailand Total surface: 570,000 m². Manufacturing and assembly area: 170,000 m². Technical and administrative offices: 12,000 m². Employment: 2,000 engineers. Sales, engineering, manufacturing, project management and R&D. Start of operations: September 2005. Danieli Metallurgical Equipment (Beijing), China Total surface: 25,000 m². Manufacturing workshop: 10,000 m². Technical and administrative offices: 5,000 m². Employment: 400 engineers. Sales, engineering, manufacturing, project management. Start of operations: September 2005. Danieli Changshu Metallurgical Equipment and Service, China Total surface: 90,000 m². Manufacturing workshop: 40,000 m². Technical and administrative offices: 5,000 m². Employment: 600 engineers. Sales, engineering, manufacturing, project management. Start of operations: October 2007. Danieli Engineering and Service Völkermarkt, Carinthia, Austria Total surface: 40,000 m². Service workshop: 6,000 m². Technical and administrative offices: 1,400 m². Employment: 90 engineers. Sales, engineering, service and spare parts. Start of operations: March 2008. The Danieli Headquarters in Buttrio, Italy Stands on an area of 320,000 m², of which 92,000 are for workshops and assembly and 28,000 for technical, commercial and administrative offices, and R&D. The sister companies in Europe have 46,000 m² of workshop/assembly area and 7,900 m² for technical offices. http://www.danieli.com/danieli-team/danieli-team ...
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...GBA 490 Nucor Individual Written Case Major Issue 1: Nucor is forfeiting market share to foreign steel producing companies who are exporting goods into the United States. In 2011 direct steel imports from foreign competitors accounted for 22% of the U.S. market despite significant unused steel making capacity. Many foreign steel producers have costs at or below that of Nucor. These low production costs allow for foreign companies to undercut the prices offered by Nucor. This in turn leads to the reduction of jobs in the steel industry in the United States. Due to differences in exchange rates and foreign companies receiving government subsidies outside steel producing companies are able to offer unusually low prices for their steel products. Until the World Trade Organization enforces regulations to limit these unfair trade practices, or the U.S. government imposes higher tariffs on imported goods Nucor will continue missing out on large portions of market share within the United States. Major Issue 2: The level of earnings that Nucor is enjoying is nowhere near the level that they had been making before the financial crisis of late 2008. They were in the red in 2009 losing roughly 293 million dollars and have since been creeping steadily back up to a mere 778 million in net earnings in 2011. This is roughly half of the earnings they were reaching from 2004-2008 as they were netting and average of 1.5 billion dollars per year. The steel industry is one that is very volatile...
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...According to the economist and strategist Dr. Vladimir Kvint, an emerging market is “a country whose society in transition from a dictatorial form of government to a free market economy, increasing economic freedom, gradual integration into the world market, an expanding middle class, improving living standards, social stability and deepening cooperation with multi-institutions ". Furthermore, In 2008 Emerging Economy Report, the Center for Knowledge Societies defines Emerging Economies as those "regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization." The notion of the author/ in simple terms with regards to emerging markets is that it is a particular economy which stands ahead of developing economies with more attractive economic and political conditions and institutional framework leading to potential business opportunities. According to Brandes (2014), “Emerging markets are no longer the uncharted markets they were in the past—they are advancing economies with growth opportunities and continually improving economic and political conditions”. The trend of emerging markets up surged from late 1990’s when 73% of developing countries outpaced America. The most impressive growth was reported in four biggest emerging economies; namely, Brazil, Russia, India and China which were abbreviated to BRICs in 2001. http://www.economist.com/news/briefing/21582257-most-dramatic-and-disruptive-period-emerging-market-growth-world-has-ever-seen...
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...ROLE OF LEADERSHIP IN ORGANIZATIONAL BEHAVIOR – SAIL INDUSTRY BACKGROUND: “Steel touches every aspect of our lives. No other material has the same unique combination of strength, formability and versatility.”- Source Anon Steel, as a material was used for centuries, whereas, steel production was considered an expensive affair since steel was produced in smaller quantities mainly targeted at the Military usage such as swords and shield. From the commercialization in 1856 of a cheap steel manufacturing process by Henry Bessemer to the improvements through Industrial Revolution and the very high demand during the Cold War periods to the Modern economic scenario where new power houses in the form of China and India have pushed the Steel industry, it is observed that there has been one constant in the journey of the Steel Industry: the increasing demand for steel. The demand for Steel has always been comfortably placed on a growing curve and so has the improvements in Steel production. World crude steel production has increased from 851megatonnes (Mt) in 2001 to 1,527 Mt in 2011 from 28.3 Mt in 1900). The industry directly employs 2 million people worldwide, with a further 2 million contractors and 4 million in supporting industries. Considering steel’s position as the key product supplier to industries such as automotive, construction, transport, power and machine goods it is safe to assume that steel helps in employment of more than 50 million people. World average steel use...
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...A Report on NIPPON STEEL CORPORATION A HR Case Study Submitted by: Ajay Kumar(14PGPM02) Sourav jyoti Choudhury(14PGPM13) MDI Murshidabad NIPPON STEEL CORPORATION EXECUTIVE SUMMARY About Nippon Steel Corporation: Nippon Steel Corporation, Japanese corporation created by the 1970 merger of Yawata Iron & Steel Co., Ltd., and Fuji Iron & Steel Co., Ltd. It ranks among the world’s largest steel corporations. Its headquarters are in Tokyo, and it has several offices overseas. Company’s Vision: “Development for the benefit of the future is always for the benefit of society.” In 1896 the Japanese government established a steelmaking bureau, and five years later the Imperial Japanese Government Steel Works began operation at Yawata (now part of Kita-Kyūshū) in northern Kyushu. In the following three decades several private steelmakers were also founded. In 1934 the imperial Diet passed legislation creating the state-operated Japan Iron & Steel Co., Ltd., which incorporated the Yawata works and six private steelmakers (Wanishi, Kamaishi, Fuji, Kyushu, Toyo, and Mitsubishi). By the end of 1939 this giant trust had developed several large, modern, integrated steelworks. During World War II, however, bombings and loss of raw materials put most of the works out of operation. The disintegration was completed in 1950, when, under pressure from the Allied occupation authority, the trust was dissolved. Its assets were distributed among four new private companies...
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...“In our industry today only a strong company with a global reach can ensure long-term employment and provide acceptable returns for shareholders.” – Lakshmi Narayan Mittal Table of Contents 1. How has Mittal managed to expand from a marginal position to become the largest steel producer in the world? 1 2. Compare Mittal’s economics per ton of crude steel with its competitors. 2 3. What threats does Mittal face? 3 4. To what extent is profitability driven by global scale? What else is relevant? 5 5. Is vertical integration a value driver for Mittal? Why? 6 6. How would a merger of Arcelor with Mittal add value? 8 Appendix I 10 1. How has Mittal managed to expand from a marginal position to become the largest steel producer in the world? Mittal Steel advanced from being a marginal company to become one of the largest steel producers in the world through its early investment in new steel making technology and strategic mergers and acquisitions. In the 1970s, 45% of the steel market was comprised of mini-mills which used scrap metal in production (p 3). Scrap metal was inexpensive but lower quality compared to other forms of production which made it difficult for mini-mills to cater to the demands of the most high-end but demanding customer in the steel industry, the automotive industry (p 3). Direct Reduced Iron (DRI) produces a substitute at minimal cost but without the quality issues associated with scrap (p 3). Lakshmi Narayan Mittal (लक्ष्मी...
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...Abstract This paper has the aim to deep understand the typical problems of the Corporate Governance of China's State-Owned Enterprises (SOEs) and how, during the years the role of the Chinese government is changed. In particular it will discusses Chinese corporate governance in this narrow sense and attempts to explain the political core function of Party Organization. Moreover it will analyze a real case: “Sinosteel Corporation”. This company was created and projected by the Chinese government with the aim to be the leader in its sector. Its corporate governance is deeply influenced by the party consequently by the Chinese government, which contributed to its establishment and growth through several government-subsidies. Key words: China’s SOEs, Governance Structure, the CCP organization, internal control mechanism, Sinosteel. Abbreviations: CCP, China Communist Party; SOEs, State-Owned Enterprises; CICSC, China Internal Control Standards Committee; SASAC, State-owned Assets Supervision and Administration Commission; PSC, Party Standing Committee; CPCC, China Party Central Committee; Introduction The definition of corporate governance in China refers to the system that regulates the multiple relationships between all the parties with interests in a business organization, typically underlying the shareholders as a predominantly important group. However in practise corporate governance focus mainly on the agency problems in particular within two kinds of firms. The...
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...IBM Business Consulting Services IBM Institute for Business Value Strategy and Change Going global Prospects and challenges for Chinese companies on the world stage In association with IBM Institute for Business Value IBM Business Consulting Services, through the IBM Institute for Business Value, develops factbased strategic insights for senior business executives around critical industry-specific and crossindustry issues. This executive brief is based on an in-depth study by the Institute’s research team. It is part of an ongoing commitment by IBM Business Consulting Services to provide analysis and viewpoints that help companies realize business value. You may contact the authors or send an e-mail to iibv@us.ibm.com for more information. School of Management at Fudan University Fudan University was the first institution of higher learning in China to set up a department of business education, and was also the first in the country to resume its business education program after the reform and open-door was implemented in China. Over the past two decades, the School of Management at Fudan University has developed into an internationally well respected business school. This joint project with the IBM Institute for Business Value fulfills our mission to analyze business operations and national economic activities using advanced management theories, systematic methods, mathematics models and information technology. It is part of our commitment of timely research...
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...STEEL INDUSTRY ANALYSIS 1. Industry trends: Indian and Global perspectives, recent happenings. Steel is the back bone of human civilization, it is very crucial in development of a modern economy. The per capita consumption of steel shows the living standard of people in any country. Global Perspective: The industry directly employs about more than two million people worldwide, with a further two million contractors and four million people in the supporting industries. Considering steel’s position as the key product supplier to industries such as automotive, construction, transport, power and machine goods, and using a multiplier of 25:1, the steel industry is at the source of employment for more than 50 million people. World crude steel production has increased from 851 mega tonnes (Mt) in 2001 to 1,527 Mt in 2011. (It was 28.3 Mt in 1900).World average steel use per capita has steadily increased from 150 kg in 2001 to 215 kg in 2011. India, Brazil, South Korea and Turkey have all entered the top 10 steel producers list in the last 40 years. World Steel in Figures 2012 The World Steel Association (world steel) has published the 2012 edition of World Steel in Figures. World Steel in Figures provides essential facts and statistics about the global steel industry. The book contains comprehensive information on crude steel production, apparent steel use, pig iron production, steel trade, iron ore production and trade, and scrap trade. World Steel in Figures lists major...
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...S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II S T R A T E G Y – II www.ibscdc.org 1 Transformation Corporate Transformation Korean Air: Chairman/CEO Yang-Ho Cho’s Radical Transformation A series of fatal accidents, coupled with operational inefficiencies snowballed Korean Air into troubled times. Then, at the beginning of the 21st century, its CEO/ Chairman, Yang-Ho Cho undertook various transformation initiatives - for instance, improving service quality and safety standards, technology integration, upgrading pilot training, better business focus; putting in place a professional management team, improving corporate image through sponsorship marketing, etc. He gave a new corporate direction in the form of '10,10,10' goal. However, Korean Air is held up by a slew of challenges. Among which are inefficiencies of - Chaebol system of management, possible clash of its cargo business with its own shipping company, limited focus on the domestic market and growing competition from LCCs. How would Korean Air manage growth as a family-owned conglomerate? The case offers enriching scope for analysing a family business’s turnaround strategies, with all the legacy costs involved. Pedagogical Objectives • To discuss the (operational) dynamics of Korean Chaebols - their influence/ effects on the country’s industrial sector and the economy as a whole • To analyse how family-owned businesses manage the transition phase - from a supplier-driven...
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...HKU552 XIANGHUA LU DAQIING ZHENG E-BUSINESS TRANSFORMATION AT ME-ONLINE The development of Shanghai Me Mechanical and Electrical Equipment Chain Co. Ltd. (SHMEC), a traditional mechanical and electrical equipment distribution company, mirrored the agony and frustration experienced by many other small and medium-sized enterprises operating during China’s socio-economic transformation process, particularly as it faced the challenge brought by information technology. The company’s growth parallels a Chinese fairy tale “Fenghuang nie pan”, the story of a phoenix that, dissatisfied with its beauty, consumes itself by fire, but rises from the ashes with surpassing beauty. Capitalising on opportunities offered by the internet, the company established Me-online as a trading platform, using e-business to transform its business model. Me-online exemplifies a traditional company in China that effected strategic changes through e-business, offering insights into the opportunities and challenges encountered. Background The Industry The mechanical and electrical equipment distribution industry in China represents a huge sector, characterised by numerous types of products and low costs of entry. From 1949 to 1990, when China was a planned economy, this seller-driven market was mainly run by stateowned enterprises. Therefore, little attention was paid to the marketing or selling of products. The common perception was that if SHMEC established chain stores on the Huangpu River, customers...
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...LARGE POWER TRANSFORMERS AND THE U.S. ELECTRIC GRID Infrastructure Security and Energy Restoration Office of Electricity Delivery and Energy Reliability U.S. Department of Energy April 2014 Update Large Power Transformers and the U.S. Electric Grid This page intentionally left blank. DOE / OE / ISER April 2014 ii Large Power Transformers and the U.S. Electric Grid FOR FURTHER INFORMATION This report was prepared by the Office of Electricity Delivery and Energy Reliability under the direction of Patricia Hoffman, Assistant Secretary, and William Bryan, Deputy Assistant Secretary. Specific questions about information in this report may be directed to Dr. Kenneth Friedman, Senior Policy Advisor (kenneth.friedman@hq.doe.gov). Tiffany Y. Choi of ICF International contributed to this report. The U.S. Department of Energy would like to acknowledge the following reviewers for their contribution to this report: ABB American Transmission Company Bartley, William H., Hartford Steam Boiler Inspection and Insurance Company, A member of the Munich Reinsurance Company North American Electrical Reliability Corporation Ontario Power Generation Scott, Daniel U.S. Department of Commerce U.S. Department of Homeland Security U.S. Federal Energy Regulatory Commission Cover photo sources: Large power transformer photo: Siemens.com High-voltage transmission lines photo: Utilities-me.com DOE / OE / ISER April 2014 iii Large Power Transformers...
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...AB311 STRATEGIC MANAGEMENT Course Outline for Seminar Groups 3, 5 and 8 ONLY Semester 2 of the Academic Year 2012-2013 Instructor: Clive Choo, awechoo@ntu.edu.sg Learning & Teaching Methods This course is structured in a seminar learning format, where a 4-hour seminar is conducted every week for a total of 13 sessions. Each seminar is intended to inform and equip students with the conceptual tools to synthesize, evaluate and analyze strategic or ethical issues. In addition, seminar activities have been developed to provide opportunities for students to sharpen their critical thinking and ethical reasoning skills through: 1. Case analyses, where students apply the conceptual tools that they have learnt in the seminar to critically analyze different strategic issues. 2. An ethical reasoning exercise (given in pages 7 and 8) where students can apply ethical concepts. 3. A critical thinking exercise where students could analyse specific case study issue with theoretical framework and concepts. 4. A group project, where each student group generates a strategic audit report of a publiclylisted firm. See pages 8 and 9 for details. 5. Collaborative learning, where students work in a group and participate in class discussion so that they learn to defend and/or integrate different perspectives on strategic issues in a critical manner. 6. A final exam, where students apply their knowledge of course material learnt throughout the course in an integrative manner. 1 Course Assessments...
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