Rivalry In Steel Industry
Rivalry among existing firms
India’s steel industry has a history of more than a century. Before liberalization, this industry was dominated by public sector companies. Tata steel was the only private player in the production of steel. 1990 onwards, huge investments have been made in the industry which lead to the entry of private players. Presently, the major firms that can be considered in steel industry are-
Tata steel (Private)
Rashtriya Ispat Nigam Ltd. (Public)
Steel authority of india ltd. (Public)
Jindal Steel (Private)
Essar Steel (Private) Steel industry is an industry that offers a similar product without much differentiation. Over the years, firms have gained some advantage in by quality, consistency
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In building construction steel reinforced concrete, aluminium or less common material like fibre glass in automobile industry. Automobile industry is one of the biggest markets for steel and steel faces competition from plastic and other composites. An aluminium car may be lighter and more fuel efficient than a steel car, furthermore steel may get corrode, reinforced plastic is much more durable. It is therefore possible for substitutes to fulfil the buyers’ needs more effectively than the original …show more content…
Thus although in certain situations there are substantial substitutes the switching costs are high, thus the threat from substitutes are substantially low.
External Environment
Political In india, the government has a considerable amount of influence on the steel industry. Various kinds of subsidies are provided to the public sector firms that which result in a competitive advantage compared to private sector firms. Few public sector firms could sell steel at prices less than the market value due to these subsidies. Licenses of iron ore also play a major role in this industry. This is one of the barriers to enter this industry.
Economic Steel industry is a key part of the growth of a nation. Steel is used as a raw material for various other industries such as manufacturing, aerospace, infrastructure, etc. This also means that if the growth of the country slows down, this industry will take a hit. Hence, this industry can influence the economy and can be influenced by the economy as well.
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