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09

Industry Study: Iron & Steel Industry

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Success Factors

Factors that must be considered in iron and steel projects are as follows:

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    Brand position and quality:

    The brand position and product quality depend on reputation building and maintaining successful relationships with the customers by continuously providing rebar products of exceptional quality, offering discounts on huge quantities, providing printed manuals and catalogue and relationship marketing, such as participating in major international steel exhibitions and using social media in order to build the brand image.

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    Market Coverage:

    The distribution network plays a vital role in businesses by ensuring the effective distribution of products, expanding the market access range and enhancing the customer satisfaction. Networks facilitate goods movement from producers to consumers and are responsible for warehousing, transporting and inventory management.

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    Backward Integration:

    The studies have revealed that most of the rebar producers own private factories for billet melting (backward integration); however, this requires guaranteed demand. In addition, some of the producers owns integrated factory for steel manufacturing and/or steel billets selling to their subsidiaries.

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    Cost Management:

    Positive cash flow are essential for any company to continue its operations. Whenever the cash flow increases and the sales accounts duration shortens, the financial situation of the company becomes better. If the company faces challenges in cash flows, this might affect many business fields such as raw material supply and the ability to sell.