Garang Metal Limited: Market Entry into Angola
Garang Metal Ltd. (GML) is a steel producer and marketer, with the registered office in Kolkata. The company is currently operating from an integrated steel plant in Kutch, Gujarat, India, to manufacture Sponge Iron, M.S. Billets, Rolled products (QST bars) at the captive power plant with an investment of INR220 crore and an installed capacity of 25 MW. The setting up and successful operationalization of the Kutch plant created project management expertise within the firm in addition to its proven steel manufacturing and marketing skills. Hence an expansionist thought process, i.e. both domestic and international, crept into the firm’s senior management.
The liberalization (1991) of industrial policy and other initiatives taken by the Government of India has given a definite impetus for entry, participation and growth of the private sector in the steel industry. Internationally, the formerly war-torn country Angola is in the process of privatizing its steel industry. Currently two of Angola’s biggest steel processors – Fabrica de Tubos de Angola (FATA) and Metalurgica de Angola (Metang) operating at about 50% capacity – are managed by Indufer, a private Angolan firm. Therefore, GML management is in a dilemma whether to set up plants in Angola or not.
Prerequisite Conceptual Understanding
This case requires to be linked to the various frameworks of strategic management like SWOT Analysis, Porter’s Five Forces Model, Porter’s Generic Strategies and some other frameworks of responding to environment uncertainty like Opportunity and Threat Matrices, etc. Methods like Market-Build up Method, Multiple-Factor Index Method, Market Information Systems, Marketing-mix models, etc., can be used to evaluate the options available to the decision maker.
Case Positioning and Setting
The case can be used for different courses in undergraduate and post graduate levels of management education. It can be used for a course in Marketing Management as a new market entry strategy creation case or in a specialized course in International Marketing. It can also be used in the Market Research methodology courses focusing on different demand estimation and forecasting techniques. This teaching note is written to solve the case from a business environment perspective. Hence, it covers important aspects of environmental uncertainty for a manufacturer, demand estimation, forecasting under uncertainty and analysis of a market.
I. What are the probable challenges to be faced by GML?
II. How environmental factors (internal and external) affect the business of GML?
III. As GML, how would you tackle these challenges and evaluate different options? Create a market entry strategy for GML.