Strategy

Tata Steel

Jyoti Anand (05)

Jitender Kumar Jain(19)

Rohit Kumar(25)

Part A (Industry Analysis)

Sie(!orld" India)
#ro$th Rate(!orld" India)
%a&or 'layers in the !orld
%a&or Players in India
(our Strategi) #rou'* + ma&or 'layer
in your grou'

Industry
Key ,)onomi) -eatures
Industry dri.ing /or)es
KS-01S- /or the Industry
Industry attra)ti.eness
Porter2s 5 /or)es )om'etiti.e model
3alue 4et
Industry stru)ture
5o$ to )om'ete*o'tions
Part* 6(1om'any Strategi)
Analysis)
Along $ith one )om'etitor(Strategi)
#rou')
Rea)ti.e0 Relati.e S!7T
Resour)es and 1a'a8ilities
1ore 1om'eten)ies
A)ti.ity Systems 3ie$
5o$ sustaina8le )om'etiti.e
ad.antage is 8uilt u'
9ast 5 years /inan)ials and :ey data
Part 1
Strategi) 1hallenges /a)ing the
)om'any today and ne;t 5 years
Strategi) 7'tions and Pros and 1ons
o/ ea)h
(our strategi) re)ommendations and
your rationale thereo/

Industry Analysis
Size
Total )rude steel 'rodu)tion /or the <<
)ountries re'orting to the IISI in
January 2009 $as estimated to 8e
=5>= million tonnes" a dro' o/ 2?@
on January 200=>(sour)e
*$$$>steelonthenet>)om)
Steel Industry
A))ounting /or <@ o/ #4P
Total Produ)tion in India o/ /inished
)ar8on steel
1991*92 * 1?>++ million tonnes
2001*02 * +0>11 million tonnes
Aemand /or steel is ad.ersely a//e)ted
8y a slo$do$n in real estate and auto
se)tors sin)e Se'tem8er 200=>
(Sour)e B 1%I,)
9o$ demand" )hea' im'orts and
desto):ing )ould 'ut 'ressure on
'ri)es o/ /lat steel 'rodu)ts in %ar)h
Cuarter>

Steel Industry
Produ)tion o/ /inished steel in (000
tonnes)
Aug 200= B ?<02
Se' 200= B ?5DD
7)t 200= B ??D1

(sour)e B 1%I, Jan 2009)

Key 'layers in the !orld

Name Production
( ) ArcelorMittal Global . 116 4 Mton
( ) Nippon Steel Japan . 35 7 Mton
( ) JFE Japan . 34 0 Mton
( ) POSO Sout! "orea . 31 1 Mton
( ) S!an#!ai $ao%teel Group orporation !ina . &' 6 Mton
( / ) (ata Steel )ndia Global . &6 6 Mton
- ( ) *iaoNin# An $en )ron and Steel Group !ina . &3 6 Mton
( ) S!a#an# Group !ina . && + Mton
& ( ) ,e$ei (an#%!an )ron Steel Group !ina . && ' Mton
( ) -nited State% Steel orporation -nited State% . &1 5 Mton
( ) .u!an )ron and Steel !ina . &0 & Mton
( ) Nucor orporation -nited State% . &0 0 Mton
( ) Gerdau $ra/il . 1' 6 Mton
( ) Gruppo 0i1a )tal2 . 17 + Mton
( ) Se1er%tal 0u%%ia . 17 3 Mton
Key Players in India

1> Steel Authority o/ India 9td(SAI9)

2> Rashtriya Is'at 4igam 9td(RI49)

+> Tata Steel ltd(TS9)

?> JS! Steel 9td

5> ,ssar Steel 9td

<> Is'at Industries 9td

D> Jindal Steel E Po$er 9td

T$o Routes to Steel %a:ing

1>1lassi)al route or 'rimary route *
6ased on 8last /urna)e (6-) and
8asi) o;ygen /urna)e (67-)
2>%odern route or se)ondary route *
6ased on ele)tri) ar) /urna)e
(,A-)" using steel s)ra' or s'onge
iron i>e> Aire)t Redu)ed Iron (ARI)
as 8asi) ra$ materials>
Ten main rolled steel 'rodu)ts

5ot Rolled 1oil

5ot Rolled Plate

1old Rolled Sheet

1oated Sheet

!ire Rod

Se)tions and 6eams

Re8ar

%er)hant 6ar
Tata Steel B -a)ts and
-igures
,m'loyee Strength F +5=D0
#olden Pea)o): A$ard 2009 /or its 1SR
a)ti.ities
,arned the distin)tion o/ 8eing the
lo$est )ost steel 'rodu)er in the
$orld (sour)e B 1%I,)
,;'anding 'rodu)tion )a'a)ity 8y 50@
to a''ro; D>? mn tonnes 8y -( 2011
(sour)e B 1%I,)
A)Cuisition o/ 1orus" 2
nd
largest steel
ma:er in ,uro'e>

Tata Steel
Tata Steel is engaged in mining"
'rodu)tion and distri8ution o/ steel
and steel 'rodu)ts in se.eral
)ountries a)ross the $orld>
The )om'any2s o'erations are
segmented on the 8asis o/ its
holding and su8sidiary )om'anies
o'erations in)ludingG Tata Steel"
1orus #rou'" 4atSteel" Tata Steel
Thailand and Tata %etali:s 9imited>
Produ)ts o/ Steel Ai.ision
Tata Steel !ho2s !ho
1hairman B Ratan Tata
%A * 6 %uthuraman
1,7 * 5% 4erur:ar
1-7 * Koushi: 1hatter&ee
Tata Steel 'resen)e
4ational
4ational
Jhar:hand
1hhattisgarh
7rissa *
Kalinganagar"
Aharma Port
Tamil 4adu

International
3ietnam
7man
South A/ri)a
Australia
%oam8iCue
I.ory 1oast

Key Su))ess -a)tors

Im'ro.ed )ost stru)tures
#ood To' %anagement
Te)hnologi)al e;'ertise
To' 1om'etitors /or Tata
Steel
Ar)elor%ittal
,ssar #rou'
4>3>Aaido Steel 1o>" 9td>
Steel Authority o/ India 9td>
Jindal 3i&aynagar Steel 9td>

1hallenges
Tata Steel /a)ed many )hallenges in
res'e)t o/ Cuality" glo8al )ost
)om'etiti.eness" )a'a)ity
e;'ansion and moderniation"
o.ersta//ing" )hange management
and trans/ormation into )ustomer*
dri.en )ulture" and shi/t in /o)us
/rom steel )ommodity 8usiness to
Tata Steel 8rand 'rodu)ts
Res'onses to )hallenges
Tata Steel res'onded 'roa)ti.ely to
these )hallenges 8y $ay o/ 'ro)ess
inno.ation" )ontinuous
im'ro.ement in 8usiness
'ro)esses" em'loyee*/riendly 5R
management 'ra)ti)es" )reating
and s'reading ne$ 'er/orman)e*
dri.en )ulture" and )reating .alue
/or )ustomers and shareholders>
1om'etiti.e 9ands)a'e
Aemand )omes largely /rom the
manu/a)turers o/ dura8le goods li:e motor
.ehi)les" ma)hinery" )ontainers" and
)onstru)tion steel> The 'ro/ita8ility o/
indi.idual )om'anies de'ends largely on
efficient operations" 8e)ause most
'rodu)ts are )ommodities sold 8ased on
'ri)e> 6ig )om'anies ha.e large
economies of scale in 'rodu)tion>
A))ordingly" most 'rodu)ers o/ se)ondary
'rodu)ts 8uy ra$ metal /rom the large
'rodu)ers> Small )om'anies )an )om'ete
8y o'erating e//i)ient lo)al mini*mills or
'rodu)ing s'e)ialty 'rodu)ts> The industry
is highly automatedG a.erage annual
re.enue 'er $or:er is )lose to H+00"000>
Strategy o/ Tata Steel in
-uture
,m'hasis on )osts
,m'hasis on o'erational e//i)ien)y
,nsuring )hea'er resour)es
,nhan)ing re.enue through 8etter
'remium in 'rodu)ts
Strategy /or /uture
,m'hasis on + as'e)ts B 6randing"
'rodu)t mi;" )osts (6 %uthuraman
in an inter.ie$)
3alue 4et
Re/eren)es
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