Steel Asia Case Study
iSteelAsia is a secure, neutral steel trading e-commerce platform created by Andrew Cho Fai in december 1999 for steel industry professionals. Indeed, iSteelAsia enables users to purchase and sell steel, network with a global community of steel traders and find informations and news concerning steel industry.
1) Describe briefly the market itself and the market conditions (positive / negative trends, opportunities / threats) under which iSteelAsia developed. Identify more specifically the threats that the company faces or may face in the near future.
The market under which iSteelAsia developed is the market of the Steel in Asia. After, the crisis of 2001, the global steel market have known a development of the global supply and the prices. This growth is particularly significant in the Asian countries and the Mideast.
Asia is the main leader of the production growth, with a rise of 54% between 1992 and 2002. China is the major player of the industry with a huge expansion of 223% in the decade. The economic boom of the steel industry in China and India has caused a massive increase in the demand for steel in recent years. The global steel market is valued at US$700 billion and the Asia region account for 41% of it.
Swot Analysis
Positive trends
Negative trends
Economic situation is positive for the steel market thanks to the economic boom in the new developing countries. Indeed, strong supply of steel in Asia rises the prices
Late of the 90's: In USA and Europe, web-based companies started to overcome steel trading inneficiencies
Development of the Asia and Hong-kong e-commerce 3 years ago later.
Internet frenzy in Asia
1999: Asian start-up adapted US internet business as model.
Contrarly to the steel market, e-commerce seems a « sexy » industry for the investors.
There are numerous challenges about developing a start-up in Asia:
The steel industry is the most conservative in the world and very slow to move to online trading
It is an unpopular and unwell-known industry with investors
The asian customers are really wary and are not able to work with Internet tools
Steel stock-holding have a low value-added and a low magin activity.
Decrease of economy due to Asian financial crisis.
Opportunities
Threats
IsteelAsia are precursors in B to B company to launch internet portal for steel trading in Asia. The others companies are late in e-commerce trading
Strong potential of steel industry in Asia
Asia is in full economic development
Steel is a « tantalizing fundamental » (in Asia particularly)
1998: 3 of the 6 leading steel-making countries came from Asia
For decades, the steel industry has been one of the toughest markets on a global scale with most steel corporations ending up in bankruptcy. Foreign and domestic competitors, management issues, environmental issues, political agenda’s and technology have had much to do with the demise and more so of the success of the steel industry. The issues that this case focus on Nucor Corporation was of:
Hoerr, J. P. (1988). And the wolf finally came : the decline of the American steel industry. Pittsburgh, PA: University of Pittsburgh Press.
-Developed and implemented strip casting overseas to eliminate a step in the steel making process
The interesting part of this industry is the fact that there is no company with a dominant market share. Even though some revenue numbers might be higher for some companies, each company has a specialty that it brings to the industry. One of the main costs is manufacturing their products. A major reason the companies are moving manufacturing plants to Asia and South America is to lower manufacturing costs.
There were many economic effects due to the global flow of silver. One of these
In summary, “Internet activities are not most significant in competition, such as informing customers, processing transactions, and procuring inputs”. (Porter, 2001) significant corporate assets--skilled employees, proprietary product, and efficient logistical systems – these factors are the most important to keep competitive advantages. In fact, it is foreseeable that the Internet's evolution will come up in the future involve a shift “in thinking from e-business to business, from e-strategy to strategy”. (Porter, 2001)Only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage.
Have you ever wondered what steel did for the country, or even the world? Well, steel had the leading roll and the greatest impact on industrial America. Steel had been used for many years, it helped American life in many ways. It also was a cheap and quality material that was built to last. Without steel the way we see the world now would be very different.
eBay needs to transfer its competitive advantage in the online auction industry into the area of
E-commerce, a system by which people can buy, sell and deal without even seeing the person on the other side, has taken a front seat in improving the economy of countries around the world. Technology today has made it possible for monetary institutions to help locate the customers resources and help solve their problems at any given time through online banking.... ... middle of paper ... ...
One of the fundamental factors that has affected the process of economic globalization is the improvements in the technology of transportation and communications. This has reduced the costs of transporting goods, services, and factors of production and of communicating economically useful knowledge and technology. There is no doubt that advances in information and communications technology are the most important technological advances of the past quarter century (Mussa, 2000). By far, the most important and business altering advancement is the internet. There is evidence everywhere that the internet has greatly affected international trade. The internet has opened up the world, and brought it right into everyone's home and business. In addition, technology and the internet have greatly reduced the costs of doing business. Even the smallest operation can now go global via the internet at almost no cost. However, there are still some problems that face these e-commerce activities. These problems are shot-term challenges and can be met. The key issues center around two areas:
Steelmaking is a process in which raw materials such as iron and ferrous scrap are used to form steel. This process improves the quality of steel, giving it specific characteristics to suit the needs of diverse industries. Due to the availability, strength, and relatively inexpensive production cost, steel has become one of our world’s most valuable resources. The production of steel directly effects our lives nearly every day. Transportation on our railways, erecting buildings, manufacturing appliances and tools, canned food, and computers are just a few applications of steel in modern life.
During this period, global consumer price inflation presented a trend of fluctuation reduction. According to World Bank data (2015), world real GDP growth slightly which is from 2.4 to 3.3 in 2012-2016. Moreover, weaker investment environment lead to the job creation rate decrease of 1.4% every year after 2011, the unemployment rate is high correspondingly (world economic situation prospects 2016). Industrial commodities like energy, metals and minerals both decline more than 35 each from the beginning of 2011 to the end of 2014 and this trend will continue (World Bank 2015). Meanwhile, China as the world’s largest exporter and the second largest importer country, economic growth becomes slowing than before (Chen 2016). It has the significant impact on the global trading environment. At the same time, global trading volume
As American and European markets mature, Asia is turning out to be progressively appealing to businesses, particularly to e-business firms that flourish with global and scalable business models. Yet, barring markets like Japan, most global e-commerce players like Amazon, eBay and Expedia have yet to find in Asia the kind of success that they have enjoyed in their home markets. While late entry and local regulations partly explain their low market share in the region, these firms also face unique challenges in Asia due to diverse cultures, multiple languages and poor infrastructure. Given the rising significance of the Asian market, interest in the territory would seem to be a consistent step. But, it’s important not to forget that the international playing field, in respect of Intellectual Property, is exceptionally dynamic and competitive.
In conclusion, E-commerce looks more promising in the future. With the evolution of the E-commerce application, every business should take advantage of it. I believe it is the new way of reaching out to a large clientele. In future physical business locations would become more of a showroom. This would simplifier customers way of shopping. Like any other project, E-commerce application needs to be managed probably to succeed and be able to compete in the future.
E- Commerce is a phenomena that is emerging rapidly between businesses all over the world, and it has affected the businesses at all sizes in many aspects.