Iron-steelindustry is a leading sector for growing of the national economy andindustrialisation of the country.
When the relationship between theimprovements that are observed in the iron-steel industry and the developmentprocess, it can bee seen that iron-steel products play a big role in theprogress of subsectors related to iron-steel industry. 1) Structural Assumptions i. Numberof SellersThe number of sellers in the iron-steel industry is atthe amount that can be counted because there are some substantial barriers toentry to the market. The fundamental barrier that blocks the entry toiron-steel industry for outer firms is that this industry requires a hugeamount of investment included heavy industry machines and equipment forproduction of iron and steel from the iron ore. ii. CostConditionsIn the short-run, compared with the all of the firmsin Europe, firms in Turkey have the lowest cost ofproduction of iron and steel.
? iii. Numberof buyersThere are many buyers for the iron-steel industry. Theiron-steel industry contributes to almost every sector in the market. For somesectors such as furniture, household appliances, construction, and automotive,iron-steel is used as raw material for production; whereas for some sectorssuch as food, iron-steel is used in the investment goods in that sector.
Inaddition, iron-steel is sold directly to overseas companies by iron-steelindustry companies in Turkey. iv. DemandConditionsSince the products from iron-steel industry aresubstitute for imported products, importation of these goods is low. 2) Behavioural Assumptions i. ObjectiveFunctionThe goals, in terms of exportation in2023, for the subsectors of iron-steel industry can be listed as long product (USD23.6 billion), flat product (USD 15.
7 billion), by products (USD 3.9 billion), pipe(USD 7.9 billion), and construction parts (USD 3.9 billion). ?Also, each ofevery firm of the iron-steel industry in Turkish market aims to maximize itsprofit in the short-run. Moreover, solving the problems that arise from thedisequilibrium of supply-demand curve is a short-run objective. i. StrategicVariableIn the iron-steel industry, many strategicvariables can be observes.
Firstly, there can be listed a variety ofsub-products such as slab, billet, flat steel, long steel, qualified steel, andpipes. Secondly, the variables are terms of distribution are sea, air, rail,and road. Whenthinking of global competition, the variables are technological infrastructure,system of education, the relationship between public and private sector, andeconomic policy. ii. Expectationof Rivals’ Reactions Since the leader firm that have a big market share in the iron-steelindustry has a big impact to market when it makes a change in its strategicplan, the smaller firms usually follow and apply the changes that the leaderfirm make. In the light of all thesecharacteristics of iron-steel industry, it can be understood that the marketstructure of iron-steel industry is an oligopoly. References: InvestmentSupport and Promotion Agency of Turkey.
(2013, December). The Iron and Steel Industry in Turkey.Retrieved from http://www.invest.gov.
tr/en-US/infocenter/publications/Documents/IRON-STEEL-INDUSTRY.pdf Republic of Turkey Ministry of Economy. (2017).
TheSector Analysis Iron-Steel Industry. Retrieved from https://www.ekonomi.gov.tr/portal/content/conn/UCM/uuid/dDocName:EK-236486