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The article discusses the expansion strategies of Emirati Steel Company that is situated in Abu Dhabi. It focuses on the expansion program, particularly the second phase of the project that cost the company Dh 7billion ($1.9 billion) (Makahleh 1).
The second phase of the expansion project followed the one that was launched in January 2006 and it aimed at increasing the production capacity of steel due to increased global demand. In that regard, the new annual production capacity of the company rose to 3.5 million metric tones (Makahleh 1).
The author believed that with that enlargement, the company would be among the largest and unique steel complexes in Abu Dhabi region. The expansion strategy of the company was in line with its projected production capacity of more than 5.5 MTPA (Makahleh 1).
The developments achieved in that phase included the structural adjustments and the production of market oriented products to meet the quality standards regionally and globally (Makahleh 1). It also increased job opportunities for technicians and ordinary workers, thus opening the employment space for foreigners. The expansion also increased profitability of the organisation, making it very competitive in the region (Makahleh 1).
Opinion and Thoughts
I think that the article is very inspiring and it acts as a market strategy for the company. Since the management was aware that the global demand for steel was steadily rising, it had to position itself regionally to reap from the market. I also believe that the expansion of the company was aimed at making it control a larger percentage of the market share.
In addition, the expansion put the company at the center of interest, making it remain competitive in the market. It is apparent that the management of the entity is very optimistic about the future of the company by asserting that it is able to meet its overhead costs from the profits.
In fact, the adoption of technology is also important, because it improves the efficiency of production and quality of its products, making it the preferred choice for clients. I believe that diversifying its production to include non-oil based products is an important step to retaining its market position in the region and setting a new pace at the international market.
In order to ensure that the company remains relevant in the market, improving the quality of its products and quantity have been very important attributes. This means that the company made the right decision to expand its production system so that it could realise the objective of being the leader in steel manufacturing in the region and globally. Controlling the market also necessitated an increase of the company’s efficiency in its production system, meaning that the decision to embrace technology was justifiable.
Lesson Learnt from the Article
The other lesson that one could learn from the article is that focused leadership and outlining strategic approaches to be used in the production system are the key aspects of success. This reason for this argument is that structural improvement in a company cannot lead to remarkable success if the leaders do not have the will and seal to implement the programs in the organisation (McWilliams and Matten 44).
Proper leadership increases the strategic positioning of the company to reap from the market and remain profitable. One could also learn that the extent to which the company goes to remain relevant shows the leaders’ commitment (McWilliams and Matten 46).
Makahleh, Shehab. Emirates Steel launches Phase II costing Dh7b. September 26, 2012. Web. <https://gulfnews.com/business/emirates-steel-launches-phase-ii-costing-dh7b-1.1081345>
McWilliams, Crane, and D. Matten. Business Ethics: Starbucks Corporation, Oxford: Oxford University Press, 2010. Print.