Crises Facing by the British Steel Industry | Report
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Added on 2020-02-05
Crises Facing by the British Steel Industry | Report
Added on 2020-02-05
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TABLE OF CONTENTSINTRODUCTION................................................................................................................................3TASK ...................................................................................................................................................3Background to the British steel industry as well as some references to the global steel industry...3Key macro environmental factors that have led to the current crisis...............................................4The application of trade theories applicable in the British steel industry........................................4Critically analyse the role of government in handling the current crisis.........................................5Brief recommendations to British steel manufacturers....................................................................6CONCLUSION....................................................................................................................................7REFERENCES.....................................................................................................................................82
INTRODUCTIONInternational Business includes the process of exchanging products and services amongdifferent businesses globally. In other words, businesses which are conducted operations beyond thepolitical and national boundaries are known as international business (Wong and Eng, 2013). Forconducting the present research, British Steel industry has been chosen. The report will evaluate thecurrent crises facing by the British steel industry. It will also cover the background of British steelindustry with some facts and also includes the micro environmental factors of the world. Furthermore,the report comprises trade theories, role of government in the crisis and recommendations for theanalysis.TASK Background to the British steel industry as well as some references to the global steel industryBritish steel industry is related to the industrialization in which technological innovation andeconomic growth were the demands of that period i.e. 18th century. In the era of 18th century, Britainwas accounted for 40% steel of the world production. Almost 40% outputs were provided to the USwhich was using it in their infrastructure. Due to this, US has taken the market of steel from Britainand has become the world leader of steel. After Second World War, Britain re- privatised its steelindustry to become competitive in the world market (Turnheim and Geels, 2013). British SteelCorporations (BSC) was established under the Iron and Steel Act 1967, which has invested in theCorporation the shares of the some major UK based steel companies that include English SteelCorporations Ltd, The Lancashire Steel Corporation Ltd, The Steel Company of Wales Ltd, The UnitedSteel Companies Ltd. Etc.When, BSC was formed then it had 90% of UK's steel making capacity with large number ofemployees. Around 200, wholly or partly owned subsidiaries were based in the Australia, Canada,south Asia, Africa, South America etc. Later on, British Steel Corporation was privatised and mergedwith the Corus Group in 1999. In 2007, Corus industry was taken over by the Indian steel operator TataSteel. This company has acquired the Corus steel plant (Birch, 2013). Therefore, now UK economy isat risk in relation to their steel plants. The main reason can be the pound which is increasing its valueand making UK steel more costly for the international markets. According to the “EEF”, UK apparentdemand and domestic share for steel industry products are decreasing year to year. In year 2011, it was10.3 and after that, it was gradually declining as in 2013, its share had come at 9.6 million tonnes(EEF, 2015). Its average UK steel price index was 181 and its retail price was 250 in 2013 (EEF,2015). Declining of steel industry's growth is the major drawback for UK economy. 3
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