TATA STEEL LIMITED

VISSION

TO BE THE GLOBAL STEEL INDUSTRY BRANCHMARK FOR VALUE

CREATION AND CORPORATE CITIZENSHIP

(A)COMPANIES PROFILE
Tata steel limited ,also known as Tata Iron Steel Company Limited(TISCO)is a steel
making company head quartered in Mumbai, India .TISCO was founded by Dorabji
Tata on 25th august 1907,as per of his father Jashetjis Tata Group .It was the 11th largest
steel making company in the world in year 2013,with an annual rate crude steel
capacity of 25.3 million tonnes, and the second largest steel company in India with an
annual capacity of 9.7 million tonnes after SAIL.
Tata Steel has manufacturing operation in 26 countries, including
Australia,Chaina,India,Netherland,Singapore,Thailand,UK and employees around
80,500people.Its largest plant located at Jamshedpur in Jharkhand. It was ranked 6th in
the 2014 Fortune Global 500 ranking of the worlds biggest corporations .It was seventh
most valuable India brand of 2013 as per Brand Finance.

OPERATIONSTata Steel is head quartered in Mumbai ,India. And the headquartered of its
marketing at the Tata Centre in Kolkata in West Bengal. It has a presence in around 56

countries including with manufacturing in operations in 26 countries including India,

Netherland, Singapore,Thailand,UK,France ,Canada.
Tata Steel serves customers into automotive ,construction ,consumer goods, engeering,
excavating and lifting , shipbuilding, packaging and power, aerospace, , rail ,and also
defence and security sectors.

MANAGEMENT BODIES

Mr. Cyrus P Mistry(Chairman)

Mr. B Muthuraman (Vice CHAIRMAN)
Mr. D.K. Mehrotra(MD,CEO Tata Steel Europe)
Mr. Karl. Ulrich Koehler(MD,CEO Tata Steel Europe)

Mr. T.V. Narendran(MD, Tata India and South East Asia)

Mr. Subodh Bhargava(Group Executive Director,Finance
and Corporate)

MAJOR COMPETITORS

SAIL(Steel Authority of India Limited)

AANISP(Anchal Ispat Limited)
BALIND(Balaji Industrial Corporation Limited)
MALVST(Malvika Steel Limited)
HARMET(Haryana Metal Limited)
FACSTE(Facor Steel limited)
BEESTE(Beekay Steel Industries Limited)

STEEEX(Steel Exchange Limited)

THA COMPANY HAS MADE THE FOLLOWING INVESTMENT IN

OVERSEAS RAW MATERIALS PROJECT
(1)BENGA COAL PROJECT- Mozambique
Tata Steel partners Rio Tinto in the benga project, located in the Moatize basin of
Mozambique.The company holds to 35% euity stake and is estimated to 40% off take of
coking coal produced in the project.The project started producing coal and made its
first shipment in june 2012.

(2)IRON ORE PROJECT: Canada

Tata steel through its subsidiary Tata Steel Minarals Canada Limited(TSMC) is
developing the Direct Shiping Ore(DSO) project in Canada.TSMC is targeting
production of 1 million tonnes of Iron Ore in financial year 2013-2014.

(B)STRATEGIES IN MARKETING

1. Customer focus

A single sales and marketing function with particular industry focus on

automotive,constraction,lifting and excavating energy and power.
A major supply chain transformation project aimed at improving customer service

level. Invested in project to improve product mix and service.

2.Innovation

14 new product launched in year 2012-2013,with the majority in automotive.

Implementation of a project and management tools knowns as Trakker to manage
the companys new product development process, involving regular monthly
review.

3.Operation Excellence

Implementation of a multi year improvement programme at the steel works

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Investment in the 108 m long rail facility at Hayange was completed, as the top rail
manufacturer.

4.People

Developing the capabilities of the workforce through training and recruitment

(C)

SWOT

A S.W.O.T analysis(alternatively S.W.O.T matrix) is a structured planning method used to

evaluate the strengths ,weakness, opportunities and threats involved in a project or in a
business venture.

SWOT Analysis of Tata Steel Limited

(a)STRENGTH:

Mineral Reserves-

Management Teams-Tata steel has a well management team who has utilized

Tata Steel has two coal mine plants in west Bokaro and
Jharia in Jharkhand. The Iron ore units are located in Noamend,Joda and Katumandi
in the state of Jharkhand and Orissa.The company having 281 million tonnes of
mines in reserves in Jharkhand and its having minerals which needs for more 20
years.
their skills in expending the company through inorganic path.

Information Technology-The companies entire operation is safe guarded

against accidence occurrence.All its mines are ISO-140001 EMS certified which is
Environmental Management System .

Brand Value-The Tata Brand is high and a socialistic approach to business have
made its name synonymous to trust.

Ability to adapt in the fast change of the environment- iIn Asia ,Tata
Steel has 70% of its procurement of raw materials for its operations in long term.

(b)WEAKNESS

Huge debt burden-Tata Steel is having total borrowed of 10.2$ billion US

dollar .It has debt equity ratio of 1.6 which means the asset of the company is
financed through debt, as a result of which the interest rates are on a rise.

High attrition rates-Tata Steel has also faced by high attrition rate.

Low cost-There are specific product like the cast products and aerospace steel
which has received low response thats why company has failed to overcome cost in
this business.

Failed technological factor-Companies like SAIL has efficiency was

introduced the XRF(X ray Fluorescence)in its plant at Durgapur and Bokaro over 12
months which is effect on the Tata Steel business because it has failed to do like this.

(C) OPPORTUNITIES

Competitive passion of the company-Tata Steel is the second largest making

steel company in India and in the world it has ranked on sixth position.

Newer technologies-The process combines an iron melter/coal gasifier vessel

with a pre-reduction shaft to produce a liquid product that is very similar to hot metal.

Opportunities for demand of higher price-The demand for steel is on a rise

both domestically and Internationally as a result of the enhanced focus upon
infrastructural development

(d)THREATS

Internal competition-Competitor likes India Steel Magnate, Lakshi mittals

Arcelor are the good competitors.

Financial cricis-Tata Steel is having a huge burden of borrowed of 10.2 $billion US

and hence a huge burden.

Decrement in the sales volume-Some products of Tata Steel (like, aerospace

steel) have a serve reduction in sale and as a result the product making of the
company in UK and Netherland is facing of shutdown.

SWOT represent in table

INTERNAL

P
O
S
I
T
I
V
E

(A)Strength
Mineral reserves
Management team
Information technology
Brand name
Fast changing capacity

(C)Opportunities
Competitive position
Newer technologies
Demand of higher price

(B)Weakness
Huge debt burden
High attrition rates
Low cost
Failed technology

(D)Threats
Internal competition
Financial crisis
Decrement of sales volume

EXTERNAL

(D)

BCG

BCG analysis of Tata Steel

(1)STAR
In categories of star of BCG matrix, the ferro alloys and minerals division are
also fall . The production in this division is 1.302million tones and the overall sales has
exceeded to 1.508 million tonnes. Infrastructural investment in Asia resulted in
improvement in the demand for stainless steel.

(2)CASH FLOW
The steel division of the company falls into the category of cash cow of the BCG Matrix.
The production is 6.439 million tonnes but the over all sales are 6.170 million tonnes.
Despite sales being lower than the production in the FY 10. The over all sales grew
by18% over last year (5.232 million tonnes in the FY09).

(3)QUESTION MARKS
In question mark category of the BCG Matrix, there also bearing and tube division fall.
They are growing rapidly but have low market product share. They have the potential
to gain market share and become a star. It can also become cash cow when the market
growth slows.

(4)DOGS
None of the divisions of the TATA Steel can be classified into dogs. All of them have
good market share and good market growth

(E)
(a)

PEST analysis of Tata Steel

PoliticalAs part of their business expansion, Tata Steel made some high risk
investments in countries such as Bangladesh ,Iraq .For the plan set up in the
Bangladesh is getting delayed on the gas supply matter, whereas the issue of
lease of the mining of the iron ore in the Iran country which is responsible in
increases of the cost of production.
(2)By improving the countrys infrastructure, the Tata Steel company and
also other steel companies can save their some amount ,as they spend huge
amount on the carriage and transportation.

(b)Ecological
(1)Steel industry may got affected because many industries like automobile,
and construction depends on the steel industry and if industries faces any kind of
barriers and decline in the country then Tata Steel also may faced the loss.
(2)There are another factor like this industry fully depend on energy market
,which also affect the Tata Steel

(c)Social
(1)Tata Steel got awarded for the commitments in the business ethical
behaviour and improving the lives of the employees and their families. For the
purpose .Tata Steel got awarded by the GOLDEN PEACOCK GLOBAL AWARD.
(2)Tata Steel focus to create the social environment.

(d)Technological(1)METAL JUNCTION, are portal system started by Tata Steel which is helpful
for not only to Tata Steel but also to entire industry.
(2)Tata Steel had invested huge to reduce the emission of CO2 in the environment
with the research of the Ultra-low carbon Steel.
(3)there is one of the biggest competitive a advantages of Tata Steel that is Captive iron
ore.

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(F)

Analysis of Porter Five Models

(1)Entry Barriers(a)Capital requirement- Steel industry has already made sufficient

effort to safeguard it self in this reguard. It has a line up of Greenfield project which it
plans to established not only for in domestic markets (Jharkhand ,Orissa,
Chhattisgarh) but also Internationally (Bangladesh, Iran,Vietnam). The company has
invested rs-8000 cr out it. It will be very difficult for any one new contract to achieve
with like such huge investment outlets.

(b)Economics of scale- Benefit of economics of scale are derived

form of lower

cost, and better bargaining power which sourcing raw materials.

(c)Govt policy- The Government has make a favourable regulation and policy
for steel manufacturer.
The regulatory clearances and other issues are some of the major problem for the new
entrance.

(2)Intensity of rivalry among existing competitors-(HIGH)

The steel industry is globalized in terms of competition with large producing
countries like China significantly influence global prices through aggressive export.
The 4 major rivals are SAIL,JSW, ISPAT and ESSAR STEEL have announced massive
expansion plan recently that is about 40-80 million tons steel production by year 2020.

(3)BARGAINING POWER OF SUPPLIER-(HIGH)

(a)The power of bargaining of supplier is low for the fully integrated steel plants they
have their own mines of key raw material like iron ore coal .eg-Tata Steel
(b) The high bargaining of power of the buyers also matter to safeguard itself .
(c)Tata Steel is dependent on imports for a major portion of its raw materials-iron ore
and coking coal. Tata Steel is also one of the least cost makers of steel in the India.

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(4)Threats of substitute-(LOW)
Plastic and composites pose a threat to Indian Steel in one of its biggest marketsautomotive manufacture

(5)Bargaining power of consumer/buyers-(MIXED)

Some of the major steel consumption on sectors likes automobiles, oils and gas
,consumer durable, shipping and power generation enjoy high bargaining power and
get favourable deals.

PORTERS 5 MODELS IN TABLE

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CONCLUSION

The production rate of Tata Steel in India has been going up at a huge rate in last few years.
In recent year a huge amount of Foreign Direct Investment is being made in Indian Steel
industry. In fact investing rate has increased in the last few years and to extend time. Tata
Steel is committed to well and environmental practices as its overall goals to act responsibly.
It shows progress towards its key aims of achieving target as well as encouraging good
decision making in its customers within their market.

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Reference

22/09/2015, retrieve from www.businessteacher.org

23/09/2015, retrieve from www.businessteacher.org
23/09/2015, retrieve from www.managementp radise.com
23/09/2015, retrieve from www.sciencedirect.com

THANK YOU

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