Introduction

The growth of a company is invariably determined not just by its strategy, but on
how it responds to the challenges it encounters. Over the decades, Tata Steel has
successfully countered several challenges that have come its way with innovative
responses and continuous improvement which have enabled it to remain stable
and even convert some of these challenges into opportunities.It is this culture of
endurance that has accorded Tata Steel the insight and focus to deal with the
current economic environment. Drawing from its inner strength and beliefs, Tata
Steel responded by launching several initiatives across all its operations in various
geographies that are helping the Group achieve sustainable growth even in the
current times. It is also this very culture that will propel Tata Steel to continue on
its growth trajectory in the years to come.
Tata Steel, formerly known as TISCO and Tata Iron and Steel Company Limited, is
the world's sixth largest steel company, with an annual crude steel capacity of 31
million tons. It is the second largest private sector steel company in India in terms
of domestic production. Ranked 315th on Fortune Global 500, it is based in
Jamshedpur, Jharkhand, India. It is part of Tata Group of companies. Tata Steel is
also India's second-largest and second-most profitable company in private sector
with consolidated revenues of Rs 1,32,110 crore and net profit of over Rs 12,350
crore during the year ended March 31, 2008.
Its main plant is located in Jamshedpur, Jharkhand, with its recent acquisitions;
the company has become a multinational with balanced global presence in over
50 developed European and fast growing Asian markets, with manufacturing units
in 26 countries operations in various countries. The Jamshedpur plant contains
the DCS supplied by Honeywell. The registered office of Tata Steel is in Mumbai.
The company was also recognized as the world's best steel producer by World
Steel Dynamics in 2005. The company is listed on Bombay Stock Exchange and
National Stock Exchange of India, and employs about 82,700 people.

HISTORY
The Swadeshi Movement encouraged Jamsetji Tata to set up Asias first ever
privately-owned integrated iron and steel plant. His interest in iron making was
triggered in 1882 when he came across an official report on the Chanda district
which identified large deposits of high-quality iron ore but also noted a lack of
suitable coal in the region. His idea of endowing his country with its own iron and
steel industry gained support within the government and in 1907, when the
Swadeshi Movement was at its height, the Tata Iron and Steel Company Ltd. was
incorporated. The Tatas raised the finance to build the steel plant within India a
significant milestone in Indian economic history. They proved a point to the then
British government that an Indian company had the vision and the wherewithal to
build an industry from the ground up and had the know-how to apply
international standards to meet local needs. The setting up of the Tata Iron and
Steel Company Ltd. gave Indian industry a voice paving the way for many a future
enterprise. Tata Steel introduced an 8-hour work day as early as in 1912 when
only a 12-hour work day was the legal requirement in Britain. It introduced leavewith-pay in 1920, a practice that became legally binding upon employers in India
only in 1945. Similarly, Tata Steel started a Provident Fund for its employees as
early as in 1920, which became a law for all employers under the Provident Fund
Act only in 1952. Tata Steel's furnaces have never been disrupted on account of a
labour strike and this is an enviable record.

Tata steel vision & mission

statement
The vision of a company provides managers with unity of direction that
transcends a well-conceived vision of an organization comprises two main
components. The first component is Core Ideology and second isEnvisioned
Future. Core Ideology defines what an organization stands for, and why they
exist that never changes and sets forth envisioned future that defines what an
organization aspires to become to achieve to create that demands significant
change and progress

Vision Statement of Tata Steel

We aspire to be the global steel industry benchmark for Value Creation and
Corporate CitizenshipWe make the difference through:
Our people, by fostering team work, nurturing talent, enhancing leadership
capability and acting with pace, pride and passion.
Our offer, by becoming the supplier of choice, delivering premium products
and services, and creating value with our customers.
Our innovative approach, by developing leading edge solutions in
technology, processes and products.
Our conduct, by providing a safe working place, respecting the
environment, caring for our communities and demonstrating high ethical
standards.

Elucidation:
A Vision of an organization should reflect the concerns of other
stakeholders such as shareholders,customers, the local community and
society in order to be effective. The vision statement of Tata Steel also

stresses on people concerns. The vision statement of Tata Steel is

describing that We aspires to become the global steel industry
benchmark which gives the view of Tata Steel`s future direction and
course of business activity.
TATA Steel lays stress on their core ideology in vision statement by taking
People, Suppliers and Ethics into account. It also emphasizes on their
innovative approach for cost leadership and differentiation in their
products and process. The vision statement of Tata Steel provides
managers with unity of direction that transcends individuals, parochial and
transitory needs.

Mission Statement:
A vision becomes tangible when it is expressed in the form of a mission
statement. Such a statement verbalizes the beliefs of the managers and the
directions in which the manager seeks to lead the organization. Mission is
defined as a fundamental and enduring purpose of an organization that
sets it apart from the organization in the similar business.
Mission statement of Tata Steel
Achieve sustainable, profitable growth in steel and related
businesses.
Create differential value for our customers through innovative
offerings.
Continuous improvement of business processes and technologies.
Foster partnership with key stake holders.
Enhance employees' competencies to create a high performing and
innovative organization.
Be a responsible corporate citizen and enhance the quality of life of
employees and key community.

Elucidation
Tata Steel`s mission embodies the business philosophy of strategic decision
makers like to achieve sustainable and profitable growth, it reflects the firm`s selfconcept like being the high performer and innovative organization. A well
designed mission statement of an organization should talk about the customer
needs, the company activities, technologies and competencies. In the same way
mission statement of the Tata Steel describes to create differential value for the
customers with the help of continuous improvement in their business process and
technology.

Policies
Quality Policy
Tata Steel is committed to creating value for all our stakeholders by continually
improving our systems and processes through innovation, involving all our
employees. This policy shall form the basis of establishing and reviewing the
Quality Objectives and shall be communicated across the organization. The policy
will be reviewed to align with business direction and to comply with all the
requirements of the Quality
Management Standard.

Corporate Social Responsibility Policy

Tata Steel believes that the primary purpose of a business is to improve the
quality of life of people. So it is committed to improve the quality of the life of the
people in the areas where it operates.

Environmental, Occupational Health & Safety

Policy
Tata Steel reaffirms its commitment to provide safe working place and clean
environment to its employees and other stakeholders as an integral part of its
business philosophy and values under which it will continually enhance its
Environmental, Occupational Health & Safety (EHS) performance in its
activities,products and services through a structured EHS management
framework.

Research Policy
Tata Steel nurtures and encourages innovative research in a creative ambience to
ensure that the competitive advantage in its overall business is retained and
surpassed. Towards this goal, the Company commits itself to providing all
necessary resources and facilities for use by motivated researchers of the highest
caliber

SWOT Analysis
SWOT analysis is done for a company, to find out its overall Strengths,
Weaknesses, Threats and opportunities leading to gauging the competitive
potential of the company. The SWOT Analysis enables a company to recognize its
market standing and adopt strategies accordingly. Here SWOT analysis of ICICI
bank is made to understand the positioning of the bank better:

STRENGTHS
1.Tata Steels Indian operations are self-sufficient in the case of its major raw
material iron ore through its captive mines.
2.Very advanced Research and Development wing which is carrying out
researches and experiments in the areas of raw materials, blast furnace
productivity, steel making, product development, process improvement etc.
Several thrust area projects were taken up.
3.Tata had a strong retail and distribution network in India and SE Asia. Tata was a
major supplier to the Indian auto industry and the demand for value added steel
products was growing in this market.
4.The Company is on its way to reach a crude steel capacity of 10 million tonnes
per annum by FY 2011. The first phase of reaching the crude steel capacity of 6.8
million tonnes per annum, Brown field projects, is nearing completion
5.The Company has in place adequate internal control systems and procedures
commensurate with the size and nature of its business. The effectiveness of the
internal controls is continuously monitored by the Corporate Audit Division of the
Company. Corporate Audits main objective is to provide to the Audit Committee
and the Board of Directors, an independent, objective and reasonable assurance
of the adequacy and effectiveness of the organisations risk management, control
and governance processes. Corporate Audit also assesses opportunities for
improvement in business processes, systems & controls and may provide

recommendations, designed to add-value to the organisation. It also follows up

on the implementation of corrective actions and improvements in business
processes after review by the Audit Committee and Senior Management.

WEAKNESS
1. Endemic Deficiencies: These are inherent in the quality and availability of
some of the essential raw materials available in India, eg, high ash content
of indigenous coking coal adversely affecting the productive efficiency of
iron-making and is generally imported. Advantages of high Fe content of
indigenous ore are often neutralized by high basicity index. Besides, certain
key ingredients of steel making, eg, nickel, Ferro-molybdenum are also
unavailable indigenously.
2. India is deficient in raw materials required by the steel industry. Iron ore
deposits are finite and there are problems in mining sufficient amounts of
it. India's hard coal deposits are of low quality and the prices of coking and
non-coking coal are ever increasing
3. Raw materials for steel production are rapidly depleting and are
nonrenewable; company has to come up with sustainable methods in steel
production.
4. Steel production in India is also hampered by power shortages.

OPPORTUNITIES
1.The biggest opportunity before Indian steel sector is that there is enormous
scope for increasing consumption of steel in almost all sectors in India.
2.Unexplored Rural Market: The Indian rural sector remains fairly unexposed to
their multi-faceted use of steel. The rural market was identified as a potential
area of significant steel consumption way back in the year 1976 itself. However,
forceful steps were not taken to penetrate this segment. Enhancing applications
in rural areas assumes a much greater significance now for increasing per capital

consumption of steel. The usage of steel in cost effective manner is possible in the
area of housing, fencing, structures and other possible applications where steel
can substitute other materials which not only could bring about advantages to
users but is also desirable for conservation of forest resources.
3.Excellent potential exist for enhancing steel consumption in other sectors such
as automobiles,packaging, engineering industries, irrigation and water supply in
India. New steel products developed to improve performance simplify
manufacturing/installation and reliability is needed to enhance steel consumption
in these sectors.
4.It is estimated that world steel consumption will double in next 25 years.
Quality improvement of Indian steel combined with its low cost advantages will
definitely help in substantial gain in export market.
5.The Tata Steel Group is leveraging the Groups collective Research and
Development experience in the Groups various geographies to further enhance
the Groups performance and also the integration process.
6.Corus acquisition bring in a tremendous technological advantage by access to
best practices in global steel industry.

THREATS
1.In the developed world, industries have been facing rising environmental costs
due to the increased concerns on Global Warming. It is, therefore, a challenge
and responsibility for the Steel industry to be the trustee in conservation of
nature for future generations
2.It is recognised that the steel and aluminium industries are significant
contributors to man-made greenhouse gas emissions as the manufacture of steel
produces carbon dioxide (CO2), and the manufacture of primary aluminium
generates both CO2 and perfluorocarbons (PFCs).
3.High raw material input cost and scarcity of nonrenewable raw materials are a
threat to the industry.(eg: Coal, limestone etc)

4.Threat of Substitutes: Plastics and composites pose a threat to Indian steel in

one of its biggest markets automotive manufacture. For the automobile industry,
the other material at present with the potential to upstage steel is aluminium.
However, at present the high cost of electricity for extraction and purification of
aluminium in India weighs against viable use of aluminium for the automobile
industry. Steel has already been replaced in some large volume applications large
diameter water pipes (RCC pipes), small diameter pipes (PVC pipes).

Porter Five Forces Model

Backed by robust volumes as well as realizations, steel Industry has registered a
phenomenal growth across the world over the past few years. The situation in the
domestic industry was no exception. In fact, it enjoyed a double digit growth rate
backed by a robust growing economy. However, the current liquidity crisis seems
to have created medium term hiccups. In this case we have analyzed the domestic
steel sector through Michael Porters five force model so as to understand the
competitiveness of the sector as well as pointed out the initiatives taken by Tata
Steel to safeguard its position from all the five forces of threats, namely:
Threats of new entrants: the willingness and ability of firms to enter a
particular industry depends on the barriers to entry. Such barriers include;
capital requirements, economies of scale, government policy & product
differentiation.
intensity of rivalry among existing competitors
The bargaining power of suppliers
The threat of substitute products
The bargaining power of buyers

Entry barriers: High

Capital Requirement: Steel industry is a capital intensive business. It is estimated
that to set up 1 mtpa capacity of integrated steel plant, it requires between Rs 25
bn to Rs 30 bn depending upon the location of the plant and technology used.

Tata Steel has already made sufficient efforts to safeguard itself in this
regard Its has a lineup of Greenfield projects which it plans to establish not
only in domestic markets( Jharkhand, Orissa &Chhattisgarh but also
internationally( Bangladesh , Iran & Vietnam). Besides, it has already
completed its expansion capacity of its existing plant from 5 mtpa to 6.8
mtpa at Jamshedpur with an investment of Rs 5,000 crore, while it is in the
process of expanding the capacity from 6.8 mtpa to 10 mtpa with an

estimated investment of Rs 15,000 crore. The company has invested Rs

8,000 crore out it and it expects to achieve 10 mtpa capacity by 2011-12. It
would prove to be very difficult for any new entrant to come up with such
huge investment outlays.
Economies of scale
As far as the sector forces go, scale of operation does matter. Benefits of
economies of scale are derived in the form of lower costs, R& D expenses and
better bargaining power while sourcing raw materials.Tata Steel being an
integrated steel company has its own mines for key raw materials such as iron ore
and coal and this protects them for the potential threat for new entrants to a
significant extent. Tata Steel owns raw material assets such as coal and limestone
mines through joint ventures or completely, with the assets spread across
countries such as Australia, Oman and Mozambique.
Government Policy
The government has a favorable policy for steel manufacturers. However, there
are certain discrepancies involved in allocation of iron ore mines and land
acquisitions. Furthermore, the regulatory clearances and other issues are some of
the major problems for the new entrants.Tata Steel being a century old company
under the flagship Tata Sons which is known for its Corporate Social Responsibility
already enjoys a respectable position in front of the Indian Government. The
Jharkhand government on May,24th 2009, has granted a prospecting licence (PL)
to Tata Steel for the Ankua iron ore mines. A senior company official said that
Tata Steel has been allocated 1,800 hectares for prospecting in the Ankua area.
Another 10,000 acres of land will be allocated to them for their project in Ranchi.
Product differentiation
Steel has very low barriers in terms of product differentiation as it doesnt fall into
the luxury or specialty goods and thus does not have any substantial price
difference. However, Tata Steel still enjoy a premium for their products because

of its quality and its brand value created more than 100 years back. Tata Steel has
introduced brands like Tata Steelium (the world's first branded Cold Rolled Steel),
Tata Shaktee (Galvanized Corrugated Sheets), Tata Tiscon (re-bars), Tata Bearings,
Tata Agrico (hand tools and implements), Tata Wiron (galvanized wire products),
Tata Pipes (pipes for construction) and Tata Structura (contemporary construction
material).Apart from these product brands, the company also has in its folds a
service brand called steeljunction.
Currently two Global Steel majors namely Arcelor- Mittal, which is the
worlds largest I and POSCO, are posed to be the biggest threat as they plan
to enter the Indian Steel Industry very soon.
Competition: High
The steel industry is truly global in terms of competition with large
producing countries like China significantly influencing global prices
through aggressive exports.
Steel, being a commodity it is, branding is not common and there is little
differentiation between competing products.
The 4 major domestic rivals are SAIL, JSW, ISPAT & ESSAR STEEL. Rest are all
smallish mills which together accounts for 30 % of the total market share.
The market shares of the 5 major players in the Indian Steel Industry are :
COMPETITION ANALYSIS
Concentration Ratio:In Economics the concentration ratio of an industry is
used as an indicator of the relative size of firms in relation to the industry
as a whole. This may also assist in determining the market form of the
industry. One commonly used concentration ratio is the four-firm
concentration ratio, which consists of the market share, as a percentage, of
the four largest firms in the industry. In general,the N-firm concentration
ratio is the percentage of market output generated by the N largest firms in
the industry.

 Bargaining power of suppliers: High

The bargaining power of suppliers is low for the fully integrated steel plants
as they have their own mines of key raw material like iron ore coal for
example Tata Steel. However, those who are non-integrated or semi
integrated has to depend on suppliers. An example could be SAIL, which
imports coking coal.
Since domestic raw material sources are insufficient to supply the Indian
steel industry, a considerable amount of raw materials has to be imported.
For example, iron ore deposits are finite and there are problems in mining
sufficient amounts of it. Indias hard coal deposits are of low quality. For
this reason hard coal imports have increased in the last five years by a total
of 40% to nearly 30 million tons. Almost half of this is coking coal (the
remainder is power station coal). India is the worlds sixth biggest coal
importer. The rising output of electric steel is also leading to a sharp
increase in demand for steel scrap.Some 3.5 million tons of scrap have
already been imported in 2006, compared with just 1 million tons in 2000.
In the coming years imports are likely to continue to increase thanks to
capacity increases.
Globally, the Top three mining giants BHP Billiton, CVRD and Rio Tinto
supply nearly two-thirds of the processed iron ore to steel mills and
command very high bargaining power. In India too, NMDC is a major
supplier to standalone and nonintegrated steel mills.
In order to safeguard itself from the high bargaining power of the buyers,
Tata Steel has forayed much earlier into the strategy of Backward
Integration.
Ownership of raw materials and a continuous improvement in production have
been the key to Tata Steels profitability. In fact weve believed in owning raw
materials for the past 100 years said managing director B Muthuraman while
elaborating on the century-old companys performance.

 Tata Steel and state-owned SAIL have largely been able to withstand raw
material price fluctuations due to captive iron ore mines. Tata Steel is also
one of the least cost markers of steel in the world. Other private steel
companies, hit by steep iron ore and coal prices, have passed on the hikes
to the customers,prompting the government to clamp down on price
increases to control inflation.
The company is dependent on imports for a major portion of its raw
material iron ore and coking coal requirements. Tata Steel is selfsufficient to the extent of 25 per cent for iron ore needs. With supplies
coming in from its mines at New Millennium Corporation in Canada and
potentially from the Ivory Coast over a longer term, its iron ore security
would gradually increase to around 62 per cent by 2015. Overall, raw
material security would reach 50 per cent by 2015 and go up to about 60
per cent by 2018.
It is also evaluating several other mineral projects in Brazil and Australia
Progressing towards the goal of achieving logistics control, Tata NYK
Shipping Pte Ltd, the Singapore-based joint venture (50:50) between Tata
Steel and Nippon Yusen Kabushiki Kaisha (NYK Line), a Japanese shipping
major has entered into a long-term charter for eight supramax/panamax
vessels and orders have been placed for building two new supramax
vessels. The joint venture was floated to handle ocean transportation of
bulk cargoes such as coal, iron ore, limestone as well as finished steel, both
imports and exports, not only for Tata Steel but also for others including
other Tata Group companies.
To achieve coal security by way of imports, the company has formed a joint
venture with an Australian company for producing coal in Mozambique,
acquired strategic interest of five per cent with 20 per cent offtake-rights in
the coal mining project in Australia in partnership with several other foreign
companies and formed a 50:50 joint venture with Steel Authority of India
Ltd (SAIL).

 For limestone, Tata Steel has entered into a joint venture with the Al Bahja
Group of Oman for a 70 per cent stake. The joint venture will undertake
mining of limestone in the Uyun region in Salalah province of Oman.
By undertaking such long term strategies to increase its raw material security,
Tata Steel is making it difficult for the suppliers of raw material to bargain
exorbitant prices .
Threat of substitutes: Low
Plastics and composites pose a threat to Indian steel in one of its biggest
markets automotive manufacture. For the automobile industry, the
other material at present with the potential to upstage steel is aluminium.
Perhaps the most attractive alternative to stainless is aluminium. Stainless
producers themselves are offering their customers a range of alternatives
in an effort to prevent business being lost to non-ferrous or carbon steel
materials. Such options include lower-nickel duplex grades and ferritic
types. In the meantime, nickels fluctuations will continue to create
problems for the stainless industry worldwide.
However, at present in India the high cost of electricity for extraction and
purification of aluminum weighs against viable use of aluminium for the
automobile industry. Steel has already been replaced in some large volume
applications: railway sleepers (RCC sleepers), large diameter water pipes
(RCC pipes), small diameter pipes (PVC pipes), and domestic water tanks
(PVC tanks). The substitution is more prevalent in the manufacture of
automobiles and consumer durables.
Bargaining power of Consumers: Mixed
Some of the major steel consumption sectors like automobiles, oil & gas,
shipping, consumer durables and power generation enjoy high bargaining
power and get favorable deals.
However, small and retail consumers who are scattered and consume a
significant part do not enjoy these benefits.

SLEPT ANALYSIS OF TATA STEEL

ECONOMIC:
The Financial market in the last 12 months has been volatile triggered by
the subprime mortgage crisis in the US. This has adversely affected the
liquidity and the risk perception of the international capital markets.
Inflation has increased around the World boosted by mainly increase in
food and energy prices. The real effective exchange rate for the US dollar
has declined since mid-2007 as foreign investment in US bonds and equities
has been dampened by reduced confidence in both the liquidity of and the
returns on such assets, weakening of US growth prospects and interest rate
cuts. The main counterpart to the decline of the dollar has been
appreciation of the euro, the yen, and other floating currencies such as the
Canadian dollar and some emerging economy currencies. Corus acquisition
is being financed by a substantial amount of debt. This puts pressure on the
Companys bottom line, and should the business environment deteriorate,
the necessity to service this debt could restrain Tata Steel in its future
investment and capacity expansion plans. In addition it could also limit the
Companys inorganic growth options.
Due To Subprime Crisis in USA an subsequent tremor all along the world,
especially in developed market in Western Europe make the vulnerable
position of Corus even more riskier.UK, Germany, Netherlands the main
market for Corus products are facing the fear for recession on
negative growth.
The steel industry is highly cyclical, receptive to general economic
conditions and reliant on the condition of a number of other industries,
including the automotive, appliance, construction and energy industries. If
these industries experience a downturn, Tata Steel too would too take a
hit, thus negatively impacting its rating.
Corus follows the policy of entering into long term supply contracts with
raw materials vendors.Thus there can be a huge time gap between

variation in prices under purchase contracts and the time when Corus can
make a corresponding price change under its sales contacts with its
consumers. Moreover, Corus may not be able to pass on the increased raw
materials costs to its customers. Such developments would lead to a
downside in our rating.
Steel production processes are energy dependent and price movements in
the energy market would accordingly affect Tata Steels bottom line.
Tata Steel became 6th biggest Steel Producer in the World after acquiring
Corus, but the cost of the
integration goes much more beyond the financial aspect. There are other
factors which will add to overall integration costs such as:
o Cross Cultural Integration
o Employer-Employee Relationship
POLITICAL:
Tata committed a huge amount of investment in politically unstable
country like Bangladesh, Iran,Mozambique and Thailand. The entire process
of setting up plan is getting delayed in question of gas upply (in
Bangladesh), Iron ore mine lease in Iran is escalating the Project cost.
Increased infrastructure spending by the Government of India and
development of roads could generate significant savings in freight and
transportation cost, making Indian steel companies and other industries
globally competitive.
Impact of Liberalization
The economic reforms initiated by the government in 1991 have added
new dimensions to the industrial growth in general, and steel industry in
particular. Some of the important features due to liberalization are:
Licensing requirement for capacity creation has been abolished.
Steel industry has been removed from the list of industries reserved
for the state sector.

 Automatic approval granted for foreign equity investment in steel

has been increased up to 74%
Price and distribution controls were removed from January 1992
Restrictions on external trade, both in import and export, have been
removed.
Import tariff reduced from 105% in 1992/93, to 30% in 1996-97.
Other policy measures like convertibility of rupee on trade account,
permission to mobilize resources from overseas financial markets,
and rationalization of existing tax structure
The Government plays a key role in the economics of TATA Steel. It has a role as a
resource allocator (the mining policies of the Government), as Competitor (the
public sector steel companies) and as Regulator. In volatile times the regulatory
risk rises with measures like reduction in import duties, levy of export duties and
withdrawal of DEPB benefits, threats of price curbs etc. Tata Steel counters this
risk by being a role-model corporate citizen and playing an important role in
contributing to the Nation building. Tata Steel is the second largest steel producer
in terms of Geographical spread of its facilities.
SOCIAL:
o Tata Steel Ltd has been awarded the Golden Peacock Global Award for
Corporate Social Responsibility(CSR) for the year 2009. The award looks for
continual commitment by business to ethical behavior, to economic
development and to improving the quality of life of employees and their
families, as well as to engagement with local communities and society at
large.
o From policies on corporate accountability, drugs and alcohol, and HIV
prevention, to a Code of Conduct that extends to its stakeholders, ethics
and responsibility are interwoven in the daily course of Tata Steel's
business. CSR is an integral component of Tata Steel's business strategy,
and constitutes one of the company's key enterprise processes. Tata Steel
aims to create a favorable social environment in its areas of operation by
improving health, education and economic well-being, as well as nurturing

o
o
o

young talent in sports. The Company's CSR philosophy is put into practice
not only in the city of Jamshedpur,but also in its neighboring districts, as
well as in more than 800 villages in the states of Jharkhand,Orissa and
Chhattisgarh.
Some of the Tata Welfare program's elements are prenatal and postnatal
care, child health and immunization, free IUDs and sterilizations,
sterilization "camps" for city residents conducted by top Bombay
gynecologists and incentive payments of Rs. 5000 in addition to the
government payment for sterilization acceptors. Tata holds motivation
meetings during worker management councils, trains ruralopinion leaders
as family planning motivators, and innovated peer motivation for youths as
well as discussion sessions for young married women with their mothers-inlaw.
Hundreds of people born with cleft lips or cleft palates have been operated
on, for free, through'Operation Muskaan' a project initiated by steel giant
Tata Steel. It's a small operation that has made a huge difference to
people's lives.
TATA being socially responsible is the deployment of Companys mobile
medical unit (Hospital on Wheels) and treating more than 145600 habitats
in urban slums and remote rural areas.
LEGAL
Tata steel requires huge chunk of land. Sudden spree of big corporate
houses for grabbing land makes the situation even more competitive. In
this regard it can be compared with Singur drama as mentioned by some
top Tata executives.
Police firing in Kalinganagar in Orissa and subsequent death of protestors
make the situation complex.
Unstable Jharkhand government and Tribal protestors at an increase
worsening the situation.
Representatives of environmental activist group Greenpeace stormed into
the AGM in the guise of shareholders of Tata Steel, got on to the podium
and alleged that the proposed port at Dhamra on the Orissa coast will kill
the migratory Olive Ridley Turtles.

Tata, the world over is respected for its ethical practices, CSR (Corporate
Social Responsibility) not just for the name sake but in true sense. It is very
difficult to find any issues in TATAs hundred year old history regarding
unethical practices or behavior. But of late the Company is suffering from
Land Acquisition problem in Singur, West Bengal. Although its not a
problem directly related to TATA STEEL but the dilution in brand TATA
has a significant effect on the share prices of Tata Steel.

Company Strategy
With the global increase in opportunities & demand of steel, TATA steel has
planned to become 2nd largest by 2012, by expanding the production. Financial
prudence remains the hallmark of any strategy that Tata Steel adopts thats why
it reduces the capital expenditure plan by 40%. By keeping stiff control on
financial risk TATA steal remain committed to its long-term strategy and will
continue to allocate capital towards itsexisting operations and new projects that
are of strategic importance.
In February 2008, the Tata Steel Group launched a new Vision with the aim of
setting a world benchmark in Value Creation and Corporate Citizenship. With
regard to Value Creation, the Tata Steel Group set itself a target of increasing the
return on invested capital of its existing assets to 30% by 2012-13 and to generate
selective growth. In order to meet this target, the Group has developed a two-fold
strategy:
In order to increase the quality of earnings of its existing assets, the Group
will pursue the optimisation of its European assets, restructure low
profitability assets and continue to derive benefits through continuous
improvement and synergies across the Group.
In order to generate selective growth, the Group will pursue capacity
expansions and securing access to raw materials. The Group is increasing its
capacity in India, through expansion of its current operations in
Jamshedpur and through the construction of a greenfield site in Orissa, and
assessment of raw material investment opportunities as and when they
arise.Corporate citizenship involves providing a safe working place,
respecting the environment, caring for its
communities and demonstrating high ethical standards. The Group wants
to be a part of the climate change
solution and has set a target to reduce its CO2 emission from the current
2.07 tonnes of CO2 per tonne of liquid steel to 1.5 tonnes of CO2 per tonne
of liquid steel by 2012 through process improvements, breakthrough

technologies and development of new products and services. More

specifically, the emission
target is planned to be achieved through:
Large investments including BOS gas recovery and back pressure valves at
Port Talbot and a new ladle furnace at IJmuiden.
Burden optimisation, e.g. through switching to pellet feed, increased scrap
ratio, reduced slag volume and increased coal injection.
Smaller investments and housekeeping actions e.g. yield improvements,
lighting efficiency and variable speed drives across all entities.
During the year, the Group has continued to execute its long-term strategy
and the tactical planning for development of new markets is well underway.
South East Asia is one of the key growth regions and the Group is focused on
developing a greenfield expansion in Vietnam and optimising operations in
both NatSteel and Tata Steel Thailand. In the construction sector, the Group is
exploring options to develop strong positions in India and in South East Asia
through leveraging its European expertise. The Group also continued to
explore raw material opportunities to improve the cost competitiveness of its
European and South East Asian operations.

Growth Strategy
Companys long term strategy is to continue to pursue capacity expansion in
India through Greenfield projects as well including Orissa, Jharkhand and
Chhattisgarh projects. Therefore the India growth strategy remains a
fundamental part of the long term strategy of the Tata Steel Group.
The strategic levers of the Group have remained the same over the last few
years. The current global economic scenario has only rephased some of these
strategies in terms of timing and speed. The four levers are
a) Making the European operations competitive by hastening the speed of the
Weathering the Stormand Fit for the Future program.

b) Quick completion of the expansion plans in India. The 3 mtpa project will be
commissioned by 2011 and will add significant value to the Group. Further
expansion in India through the Greenfield project in Orissa and Chhattisgarh
are ongoing and their commencing will depend on ground realities and iron
ore allocation.
c) Investment in raw material assets to provide better raw material security
especially to our European operations.
d) Vigourous pursuit of continuous improvement across all our
operations.Despite the current slowdown in consolidation within the global
steel industry, mergers and acquisitions remain a critically important business
strategy for most corporates. Steel analysts are expecting a new wave of
consolidation to take place in the next three years. Global giants are refocusing
on positive markets by applying their resources to the core business where
they are most needed. This creates opportunities to gain market share from
competitors who diversify and split their focus. Acquisitions and strategic
alliances are also critical to strengthen, refocus and position companies for
increased growth and profitability. The Tata Steel Group is strongly pursuing its
long-term strategy of acquiring and developing mining projects for its raw
material security for iron ore and coking coal. The Group has been
concentrating on the geographies that are logistically favorable with respect to
its plants in Europe and Asia.

Raw material strategy

One of the major problems faced in the steel sector is the availability of raw
material. Tata Steel in India is an integrated player, for the majority of its raw
material requirements. However, raw material self-sufficiency for the
consolidated entity is at 25% post the Corus acquisition. It has been the stated
objective of the company to increase self-sufficiency of raw materials to 50%
in the medium to long term. Therefore company is acquiring new virgin sites
with significant resource potential & stocks or in terms of smaller existing
ventures which can be quickly aligned to the requirements in Europe.

Riversdale Energy Mining Limited, holds an inferred reserve of around 4 billion

tons in one tenement, in Mozambique.

Financing & Liquidity Strategy

For the global financial crisis, the company responded very quickly on many
fronts and financing was certainly one of them. Recognising the uncertain
financing environment and the fragile state of the global banking industry,
company has focussed on both internal and external levers. Primary
importance is placed on conserving liquidity through reduced spend
management and sharp reduction in working capital levels.
Also focus is given on improvement in the productivity levels and reduction in
overheads. On capital expenditure, company has re-prioritised on the most
value creating and critical projects and reworked the capital planning strategy.
On the external front, long term capital are raised which acts as a liquidity
buffer in the current circumstance. The above actions ensured that the Tata
Steel Group had adequate liquidity and also financial flexibility for growth and
exigencies.

Cost leadership & Differentiation Strategy

Present Strategic Issues

Global Leader/presence both in means of Quality and Quantity.

Security & procurement of raw materials
Entering the new markets
Eliminating the RED color from balance sheet
Struggle to digest the big ticket global acquisitions
Leadership crisis within the company

Joint Ventures, Mergers & Acquisitions

1. Corus:Europes second largest steel maker with operations in the UK and
mainland Europe and over 40,000 employees worldwide. Its long and strip
products cater to the construction,automotive, packaging, and engineering
and other markets worldwide. Coruss takeover was the one of the biggest
merger in steel industry for which TATA was paying 608 pence per share
which is seven times of is original value.
2.Tinplate Company of India Limited (TCIL): With a market share of over 35%, it
is the industry leader in India.
3. Jamshedpur Injection Powder Limited (Jamipol): JAMIPOL manufactures
carbide de-sulphurising compounds which are used for de-sulphurising hot
metal for the production of low-sulphur, high-quality steel.

Technology Strategy
A technology strategy is concerned with a firm`s approach towards the
development and use of the technology. This strategy plays a key role in
developing an overall competitive strategy and hence needs to be consistent
with the other value activities of an organization. So in the same way TATA Steel
also made a technological strategy by making use of E portal with the
collaboration of SAIL. So TATA Steel forged new business strategies using the
Web i.e. metaljunction.com, a 50:50 joint venture of Tata Steel and Steel
Authority of India Ltd.
This is a dotcom story with a difference. TATA Steel made a "transformational
change through process innovation.'' www.metaljunction.com, which accounts
for over 14 million tonnes of saleable steel annually.
Benefits:
First Mover Advantage: It was in the mid-2000 that both Tata Steel and SAIL
realized that trading on the Internet will happen and will be there to stay. Both

companies decided to get together, form a task force and put in place a
mechanism whereby we could leverage on the Internet not just for mutual
benefit but for the benefit of the entire steel industry as well, to begin with. So
in this way it was TATA Steel who got the first mover advantage in India.
Competitive Advantage: Metal junction is now the largest e-marketplace for
steel in the world, having sold over 4 million tonnes of steel for its clients and
currently selling at an average rate of 150,000 tonnes per month. No other Steel
maker in India could really reach this level of sale.
Enhancement in Value Chain: With the use of technology an organization is able
to enhance value in its value chain. There are two channels E-procurement and
E-sales. Metaljunction.com has truly succeeded in leveraging the power of the
Internet to re-engineer, simplify and streamline processes across the entire steel
value chain. Earlier strength has been on selling steel and procuring inputs
required by the steel ndustry, it has initiated the process of augmenting its
service offerings and adding new products, such as minerals and ferro alloys, to
its portfolio.
Cost Leadership: At present, both Tata Steel and SAIL outsource their selling and
purchase needs to metaljunction.com which, in turn, leverages on the Internet
to facilitate "procurement at smart rates and sales at highest possible rates.''
This is done on a case-to-case basis and in lieu of a commission that is based on
the value of the transaction.

Future outlook
Currently, the global steel industry is going through unprecedented times. The
steel demand is strong with over 6% growth year on year over the last seven
years unseen in the last several decades, primarily driven by robust growth in
China, India, South East Asia, Middle East, Russia and Brazil. The iron ore and
coking coal prices are at a record high both due to insufficient capacity creation
for these and the heavy consolidation of minerals companies. Oil prices and
ocean freight rates are at an all-time high. The combined effect of all these have
driven steel prices to a level higher than ever before though there is increasing
pressure on margins of steel companies due to very high input costs.
The new scenario both external, due to high raw material and freight costs and
internal, called for a new Vision, strategies and action plans. The Company has
co-created a shared Vision with its employees of becoming a global benchmark
in Value Creation and Corporate Citizenship. Company has set goals for 2012 in
terms of Returns on Invested Capital, Safety, Carbon dioxide emissions and of
becoming the employer of choice in the industry. The integration with Corus is
proceeding smoothly and is yielding better than the predicted results.
Continuous improvement projects are being given focus in all companies sites
and businesses. Greenfield projects in India are progressing, though somewhat
slower than planned.
Companys effort to enhance their raw material security has yielded positive
results in Ivory Coast for iron ore, in Mozambique for coal and in Oman for
limestone. There is greater emphasis on safety. They have well laid out plans to
reduce CO2 emissions to benchmark levels.The Tata Steel Group will pursue
strategic growth through capacity expansions and securing access to raw
materials. The Group is expanding its capacity in India through the expansion of
its operations in Jamshedpur to 10 million tons per annum and through the
construction of a 6 million tons per annum greenfield site in Orissa. Other
Greenfield opportunities in India and across Asia are being assessed. The

Group is also looking at further integration upstream in raw materials with an

ambition to achieve 100% self-sufficiency in India and around 50% selfsufficiency in Europe over time. Agreements for the exploration of iron ore in
the Ivory Coast, coal in Mozambique and limestone in Oman have already been
signed and opportunities are under review in India to support the Indian
Greenfield projects; and in Africa and South America, primarily to support its
European steelmaking assetsClimate change is probably the biggest challenge
ever to confront the steel industry. In response to thischallenge, the Tata Steel
Group will be part of the solution and is committed to minimising
theenvironmental impact of its operations and its products. It has a goal to
reduce its CO2 footprint by at least20% by 2020 compared to 1990. To meet this
objective, the Group will, for example, continue to improve its current
processes, invest in breakthrough technologies and develop new products and
services that reduce the environmental impact over the product lifecycle. To
improve its processes, priority is given to energy conservation schemes; in
technology break-through such as Ultra Low Carbon Steel making and in other
innovative projects where the Group has proprietary technology.