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
Porters 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
ArcelorMittal (Global)
Nippon Steel (Japan)
JFE (Japan)
POSCO (South Korea)
Shanghai Baosteel Group Corporation (China)
Tata Steel (India / Global)
LiaoNing An-Ben Iron and Steel Group (China)
Shagang Group (China)
HeBei Tangshan Iron & Steel Group (China)
United States Steel Corporation (United States)
Wuhan Iron and Steel (China)
Nucor Corporation (United States)
Gerdau (Brazil)
Gruppo Riva (Italy)
Severstal (Russia)

Production
116.4 Mton
35.7 Mton
34.0 Mton
31.1 Mton
28.6 Mton
26.6 Mton
23.6 Mton
22.9 Mton
22.8 Mton
21.5 Mton
20.2 Mton
20.0 Mton
18.6 Mton
17.9 Mton
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 companys 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 Division

Hot Metal

Crude
Steel

Saleable
Steel

Tata Steel Whos Who

Chairman Ratan Tata

MD - B Muthuraman
CEO - HM Nerurkar
CFO - Koushik Chatterjee

Tata Steel presence

National

National
Jharkhand
Chhattisgarh
Orissa - Kalinganagar,
Dharma Port
Tamil Nadu

International

Vietnam
Oman
South Africa
Australia
Mozambique
Ivory Coast

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.
2.
3.
4.
5.
6.
7.
8.

www.tatasteel.com (Tata Steel)

www.steel.nic .in (Ministry of Steel)
http://jpcindiansteel.nic.in/tech30sep.asp
www.economictimes.indiatimes.com
www.worldsteel.org
CMIE Monthly review of Indian Economy
www.worldsteel.org
http://www.steelonthenet.com/production.html

9. http://www.researchandmarkets.com/report
info.asp?report_id=690579
10.http://www.ieindia.org/publish/mm/1003/oc
t03mm2.pdf