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 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 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 Whos 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