SWOT Analysis of ArcelorMittal. ArcelorMittal S.A. is a steel manufacturing multinational company. The company came into existence through the merger of the Indian Mittal Steel Company and European Steel manufacturing company Acelor in 2006. The headquarter of the company is in Luxembourg City, Luxembourg.
Some of the main products and services of ArcelorMittal are as follows;
- Wire Products
- Long Steel Products
- Flat Steel Products
Key Statistical facts and figures about ArcelorMittal are as follows;
- The annual revenue of the steel manufacturing company in 2022 was 79.844 billion US dollars
- Out of which, the net income of the company was 9.302 billion US dollars
- Approximately 158,000 employees are working for the company to manage its worldwide operations
Some of the main subsidiary brands of ArcelorMittal are as follows;
- ALZ Steelworks
- Creusot Loire
- Aperam South Americans
- Dillinger Hutte
Some of the top competitors of ArcelorMittal are as follows;
- Commercial Metal Company
- Aditya Birla Group
- Nucor Corporation
- Wheaton Precious Metals
- Agnico Eagle Mines
- Teck Resources
- Steel Dynamics
Today, we’ll discuss the swot analysis of ArcelorMittal. It is going to focus on the internal strengths and weaknesses; external opportunities and threats to the leading steel manufacturing company. Here’s the swot analysis of ArcelorMittal as follows;
Strengths of ArcelorMittal
Some of the main strengths in the swot analysis of ArcelorMittal are as follows;
According to an estimate, ArcelorMittal is producing 88 million metric tons of crude steel annually by the end of 2022. The company has employed more than 160,000 to 200,000 employees directly or indirectly to manage its worldwide operations.
ArcelorMittal follows the downstream integration business model and it allows the company to sell the final product to the end consumers without involving any middlemen or 3rd parties. It allows the company to reduce costs and improve profitability. However, the way steel manufacturing company approaches customers is through;
According to an estimate, ArcelorMittal is operating its business and has manufacturing facilities in 16 countries across the world. On the other hand, the steel manufacturing company is serving customers in more than 155 countries across the globe. The total worth of the company’s assets is more than 100 billion US dollars.
Research & Development
ArcelorMittal invest a significant amount of resources in research and development. According to an estimate, the company has a team of more than 1500 researchers and they’re working in the company’s 11 research facilities. However, they are working on more than 1000 research programs.
Weaknesses of ArcelorMittal
Some of the main weaknesses in the swot analysis of ArcelorMittal are as follows;
High Debt-to-Equity Ratio
On the surface, ArcelorMittal seems a highly growing and profitable steel manufacturing organization. But if you study the balance sheet closely, then you would realize that the company has a very high debt-to-equity ratio. It is not good for the long-term growth and profitability of the company.
ArcelorMittal has a list of subsidiary brands. In order to meet the steel demands of customers and client companies, the company is heavily relying on its subsidiary brands to satisfy the needs and wishes of customers. It gives them high bargaining power and they would turn the table against the company.
Opportunities for ArcelorMittal
Some of the available opportunities in the swot analysis of ArcelorMittal are as follows;
It is no doubt ArcelorMittal is serving a significant portion of the customer market and the company has got a large market size. In order to expand its market size, the company needs operational flexibility in terms of supply chain, logistics, distribution, and production facilities.
Speaking of market expansion, ArcelorMittal should consider merger and acquisition and launching joint ventures with various steel manufacturing companies in India and China. It would help the company to share talent and expertise; more revenue and profitability as a result.
Along with the market expansion, ArcelorMittal should also consider expanding its business into relevant fields like mining industries. Mining of iron and other metals would help the company to decrease its reliance on 3rd party supplies; amplifying the company’s independence.
Threats to ArcelorMittal
Some of the potential threats in the swot analysis of ArcelorMittal are as follows;
The iron and Steel industry is highly competitive, and there are various leading companies operating in the same area. The thing about the steel industry is that there is no product differentiation; all the companies are offering the same product. It doesn’t give the company ArcelorMittal any competitive edge to win the market share.
The steel manufacturing facilities require a high level of labor-intensive work along with robots and machinery. The labor cost in developed countries is very high, and it decreases the company’s net income and profitability.
The steel manufacturing process consumes a lot of energy and fuel, and it raises serious environmental concerns about the company’s operations. The consumer market and governments have become highly environmentally cautious, and they are imposing strict policies and regulations.
Conclusion: ArcelorMittal SWOT Analysis
After an in-depth study of the swot analysis of ArcelorMittal; we have realized that ArcelorMittal is the world’s leading steel manufacturing company. If you are learning about the business of ArcelorMittal, then you should keep in mind the abovementioned internal and external factors.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.