Strategy

 Tata Steel


•
 Jyoti Anand (05)
 Jitender Kumar Jain(19)
 Rohit Kumar(25)

 Part A (Industry Analysis)
• Size(World, India)
• Growth Rate(World, India)
• Major players in the World
• Major Players in India
• Your Strategic Group- 3 major player
in your group
•
 Industry
• Key Economic Features
• Industry driving forces
• KSF/CSF for the Industry
• Industry attractiveness
• Porter’s 5 forces competitive model
• Value Net
• Industry structure
• How to compete-options
 Part- B(Company Strategic
Analysis)
• Along with one competitor(Strategic
Group)
• Reactive/ Relative SWOT
• Resources and Capabilities
• Core Competencies
• Activity Systems View
• How sustainable competitive
advantage is built up
• Last 5 years financials and key data
 Part C
• Strategic Challenges facing the
company today and next 5 years
• Strategic Options and Pros and Cons
of each
• Your strategic recommendations and
your rationale thereof
•
 Industry Analysis
• Size
– Total crude steel production for the 66
countries reporting to the IISI in
January 2009 was estimated to be
85.8 million tonnes, a drop of 24%
on January 2008.(source
-www.steelonthenet.com)
 Steel Industry
• Accounting for 6% of GNP
• Total Production in India of finished
carbon steel
– 1991-92 - 14.33 million tonnes
– 2001-02 - 30.11 million tonnes
• Demand for steel is adversely affected
by a slowdown in real estate and auto
sectors since September 2008.
(Source – CMIE)
• Low demand, cheap imports and
destocking could put pressure on
prices of flat steel products in March
quarter.
 Steel Industry
• Production of finished steel in (000
tonnes)
– Aug 2008 – 4602
– Sep 2008 – 4577
– Oct 2008 – 4471
 (source – CMIE Jan 2009)

 Key players in the World
Name Production
ArcelorMittal (Global) 116.4 Mton
Nippon Steel (Japan) 35.7 Mton
JFE (Japan) 34.0 Mton
POSCO (South Korea) 31.1 Mton
Shanghai Baosteel Group Corporation (China) 28.6 Mton
Tata Steel (India / Global) 26.6 Mton
LiaoNing An-Ben Iron and Steel Group (China) 23.6 Mton
Shagang Group (China) 22.9 Mton
HeBei Tangshan Iron & Steel Group (China) 22.8 Mton
United States Steel Corporation (United States) 21.5 Mton
Wuhan Iron and Steel (China) 20.2 Mton
Nucor Corporation (United States) 20.0 Mton
Gerdau (Brazil) 18.6 Mton
Gruppo Riva (Italy) 17.9 Mton
Severstal (Russia) 17.3 Mton
 Key Players in India
1. Steel Authority of India Ltd(SAIL)
2. Rashtriya Ispat Nigam Ltd(RINL)
3. Tata Steel ltd(TSL)
4. JSW Steel Ltd
5. Essar Steel Ltd
6. Ispat Industries Ltd
7. Jindal Steel & Power Ltd



Two Routes to Steel Making
1.Classical route or primary route -
Based on blast furnace (BF) and
basic oxygen furnace (BOF)
2.Modern route or secondary route -
Based on electric arc furnace
(EAF), using steel scrap or sponge
iron i.e. Direct Reduced Iron (DRI)
as basic raw materials.
• Ten main rolled steel products
 Hot Rolled Coil
 Hot Rolled Plate
 Cold Rolled Sheet
 Coated Sheet
 Wire Rod
 Sections and Beams
 Rebar
 Merchant Bar
 Tata Steel – Facts and
Figures
• Employee Strength = 35870
• Golden Peacock Award 2009 for its CSR
activities
• Earned the distinction of being the
lowest cost steel producer in the
world (source – CMIE)
• Expanding production capacity by 50%
to approx 7.4 mn tonnes by FY 2011
(source – CMIE)
• Acquisition of Corus, 2nd largest steel
maker in Europe.
 Tata Steel
• Tata Steel is engaged in mining,
production and distribution of steel
and steel products in several
countries across the world.
• The company’s operations are
segmented on the basis of its
holding and subsidiary companies
operations including: Tata Steel,
Corus Group, NatSteel, Tata Steel
Thailand and Tata Metaliks Limited.
Products of Steel Division
 Tata Steel Who’s Who
• Chairman – Ratan Tata
• MD - B Muthuraman
• CEO - HM Nerurkar
• CFO - Koushik Chatterjee
 Tata Steel presence
• National • International
– National – Vietnam
– Jharkhand – Oman
– Chhattisgarh – South Africa
– Orissa - – Australia
Kalinganagar, – Mozambique
Dharma Port
– Ivory Coast
– Tamil Nadu

–
 Key Success Factors
• Improved cost structures
• Good Top Management
• Technological expertise
 Top Competitors for Tata
Steel
• ArcelorMittal
• Essar Group
• N.V.Daido Steel Co., Ltd.
• Steel Authority of India Ltd.
• Jindal Vijaynagar Steel Ltd.
•
 Challenges
• Tata Steel faced many challenges in
respect of quality, global cost
competitiveness, capacity
expansion and modernization,
overstaffing, change management
and transformation into customer-
driven culture, and shift in focus
from steel commodity business to
Tata Steel brand products
 Responses to challenges
• Tata Steel responded proactively to
these challenges by way of process
innovation, continuous
improvement in business
processes, employee-friendly HR
management practices, creating
and spreading new performance-
driven culture, and creating value
for customers and shareholders.
 Competitive Landscape
• Demand comes largely from the
manufacturers of durable goods like motor
vehicles, machinery, containers, and
construction steel. The profitability of
individual companies depends largely on
efficient operations, because most
products are commodities sold based on
price. Big companies have large
economies of scale in production.
Accordingly, most producers of secondary
products buy raw metal from the large
producers. Small companies can compete
by operating efficient local mini-mills or
producing specialty products. The industry
is highly automated: average annual
revenue per worker is close to $300,000.
 Strategy of Tata Steel in
Future
• Emphasis on costs
• Emphasis on operational efficiency
• Ensuring cheaper resources
• Enhancing revenue through better
premium in products
 Strategy for future
• Emphasis on 3 aspects – Branding,
product mix, costs (B Muthuraman
in an interview)
Value Net
 References
1.www.tatasteel.com (Tata Steel)
2.www.steel.nic .in (Ministry of Steel)
3.http://jpcindiansteel.nic.in/tech30sep.as
p
4.www.economictimes.indiatimes.com
5.www.worldsteel.org
6.CMIE – Monthly review of Indian
Economy
7.www.worldsteel.org
8.http://www.steelonthenet.com/producti
9.http://www.researchandmarkets.com/
reportinfo.asp?report_id=690579
10.http://www.ieindia.org/publish/mm/
1003/oct03mm2.pdf