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ArcelorMittal (SWOT Analysis) - August 2013

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

ArcelorMittal

ArcelorMittal (or the group) is the world's largest steel producer. The group had an annual achievable production capacity of approximately 119 million tons of crude steel for the year ended December 31, 2012. ArcelorMittal sells its steel products primarily in local markets and through its centralized marketing organization to a diverse range of customers in over 170 countries including the automotive, appliance, engineering, construction, and machinery industries; and has steel-making operations in 20 countries on four continents. The group is headquartered in Luxembourg City, Luxembourg and employed 245,000 people as on December 31, 2012.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Market leader in steel
  • Diverse product portfolio
  • Strong mining business
  • Strong research and development (R&D) capabilities

Weaknesses

  • Dependence on subsidiaries to meet obligations
  • Product liability claims
  • High debt
  • Declining profitability
  • Underfunding of pension and other post-retirement benefit plans

External

Opportunities

  • Positive outlook for the global steel market in the short term
  • Growing global automotive industry

Threats

  • Consolidation in the steel industry
  • Political, legal, and social uncertainties
  • Environmental regulations
  • Economic or industry downturn
  • Volatility in the supply and prices of raw materials
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