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Electrosteel Case Solution

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Electrosteel Case
Manufacturing Strategy MG 635

Prashant Landge Shalabh Nagpal Jishnu Paul Chakma Shekhar Gupta

09927877 09927883 09927901 09927834

10/7/2010

1. What are the key success factors for Electrosteel? Is international expansion a good idea? Success Factors
India had policies that protected local industry, and that combined with complicated government bureaucracy, complex duties, and convoluted tax structures that made it difficult for multinationals to conduct business there. Electrosteel being the local player could enjoy the protectionism provided by the local state and central governments. As the state and the central governments were investing highly on the infrastructural projects, Electrosteel was growing at a rapid speed owing to these new infrastructural projects across the domestic market. Being the biggest producer of CIP and DIP in the domestic market Electrosteel they have a Well Established brand in India and maintained an extensive local network of agents and a team of sales professionals. In India the operational costs are very low and the labour is available at cheaper cost than those used by competitors. The skilled labour is available in India at fairly low wages and the employees at Electrosteel are loyal. Early entry into market in 1965 gave it First Movers advantage The plant had been accredited with ISO 9002 certification and international product certification widely recognized by customers. International Expansion International expansion would offer a strong opportunity for continued growth, with the added benefit of providing additional hard currency for further investment in new production technologies. Expanding the company internationally would make it a global player and building an overseas plant was particularly attractive, as it would effectively translate into Electrosteel being considered a global…...

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