Stragetic Management

STRATEGIC MANAGEMENT AND ORGANIZATION

Winter Exam 2010/2011

Brief summary for the case

Before answering all the five questions, I will succinctly describe the environmental basics as I believed that it will contribute to us having a better idea and overview of the company, which is US Steel, at hand. Let me first describe the macro-environment of the steel industry before I go on to describe about US Steel Corp.

In this case, I will define the market in this case as the construction and automobile industry. While there are other markets such as appliance, industrial machinery, etc; my rationale for choosing construction and automobile industry is because of the scale and large influence both these industry have in the making or unraveling of the steel industry.

Growth in the steel market is highly correlated to the growth of the construction and automobile industry which in turn is highly correlated to the GDP growth(or a country’s economic growth). In the three largest car market of US, China and Japan, car sales have, and are also expected in coming months to, decrease. Performance of car market in Europe is likewise. The only exception is India where demand for cars are exceeding expectations.

While the market size for steel industry is not specifically mentioned in any clips, the large range of applications for steel and the presence of a global market that is accessible through export and other internationalization methods, tells us that the opportunities for growth is very high if a company positions themselves properly.

The US Steel Corporation is the top 10 international producer with a crude steel output of 23.2 million metric tons in 2009. It is also the second largest steel producing company from the US. Despite a gloomy global economic outlook in 2009, US Steel Corp has managed to achieved a net income in 2009(clip 4,pg3) that is almost 70% higher than its net income in 2007, signaling strong company fundamentals.

Having now gone through...