POSCO: Global Supply Chain Management

In 2005, POSCO was the world’s most competitive steel company, and one of the largest. From its founding in 1967 in South Korea, it had built its success on technology, and on highly efficient, integrated steel plants. The business environment was rapidly changing, however. Demand for steel was exploding, led by rapid growth in Chinese demand. Raw material supplies were becoming strained, and costs were rising dramatically. The industry was consolidating. POSCO management considered a radical departure from their proven success formula. They considered developing steel plants near the foreign materials suppliers, and shipping the steel to finishing plants near customers. They also thought about joining in the wave of consolidations. Did the new business environment demand radical strategic change? How would a new strategy impact the company’s strengths that had fueled its past success?