INTERNATIONAL BACCALAUREATE DIPLOMA

PROGRAMME

BUSINESS MANAGEMENT RESEARCH PROJECT –

HIGHER LEVEL

“Can Bharat Steel increase its market share if there is a change

in the marketing strategies?”

CANDIDATE Number: - gwj552

Written report: - 1700

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Executive summary (abstract)

This research proposal is an examination to conclude whether the increase of market share of

Bharat steel if they change their marketing strategies.

The viability of the product is done by observing the present position of the company, their

market shares and the current profit margin sustained. This data will be collected by

interviewing managers, clients, and customers of Bharat steel and also through secondary

research data to justify the feasibility of the expansion. From the survey, it will be seen that

plans to increase their overall market share and profit margin with the expansion of the Bharat

steel. The research will be conducted in Bharat steel Guntur and will explore whether the

market conditions are favorable and whether the current capital retained along with the market

share in the Guntur is sufficient for them to expand into other parts of Andhra Pradesh. The

survey will help Bharat steel to understand where all they can develop in to increase their

market share by increasing its market share.

(Word Count: 167)

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Acknowledgement
I would like to thank, the chief executive director MR.K. Krishna Mohan and
all the employees of the Bharat Steels for their assistance in providing and
allowing me to do the research on their company. I would also like to thank
my teacher Ms. Sreeharinee Raman for guiding me.

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Table of contents
EXECUTIVE SUMMARY (ABSTRACT) ........................................... 2

ACKNOWLEDGEMENT…….............................................................. 3

INTRODUCTION ....................................................................... 6

RESEARCH QUESTION........................................................... 6

RATIONALE ………................................................................ 6

METHODOLOGY …….................................................................6

MAIN RESULT AND FINDINGS ......................................................8

ANALYSIS AND DISCUSSION ...................................................... 13

CONCLUSION AND RECOMMENDATIONS .................................... 15

BIBLIOGRAPHY …………………………………………………………. 16

APPENDIX 1 ......................................................................... 17

APPENDIX 2 ......................................................................... 18

APPENDIX 3 ......................................................................... 19

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5|Page
Introduction
India being one of the fastest developing countries, expected to lead the world by the year 2035 with a
phenomenal growth of 7.5%-8.0%. Iron and Steel has a very important role to play. The manufacturing
of steel is regarded as one of the key industries. Large amount of iron and steel is required for
constructing. The basic need of Indian economy today is industrialization. Like a ship building and light
machine are depending of the availability of iron and steel, iron and steel industry accelerates
industrialization and even is also known as backbone of Indian economy. Bharat steel Is presently
operating in Guntur, Vijayawada, Vishakhapatnam and Rajahmundry. India is one of the fastest
developing countries. In this situation infrastructure plays a major role in this fastest growth. Even
expected to lead the world by 2035with a phenomenal growth of 7.5-8. Iron and steel is the main major
element involved in all infrastructure products.

Research Proposal
Can Bharat Steel increase its market share if there is a change in the marketing
strategy?
Rationale
The iron and steel are one of the most important industries in India. In the years of 2014 and 2015 India
is the third most producer of raw steel. It is a prerequisite for modern industrial development. And the
basic need of Indian economy is rapid industrialization. As important industries like railway locomotive,
ship building and construction are dependent on iron and steel industry. It is even a major factor for the
growth of India’s GDP and also backbone of the country’s economic growth.

Theoretical Framework:

The analysis of the research proposal is based on two methods which is both financial and non-
financial. In this research work I will present the challenge and the positive aspects of the business.
Key areas of Syllabus:

1.3) Organization objectives

3.5) Profitability and Liquidity ratios analysis
3.8) Investment appraisal
3.4) Financial accounts

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Methodology
Research Methodology The study being descriptive in nature, mainly rely upon secondary data. To
support the secondary information, primary data has also been collected. For the purpose of, A Study of
Financial Efficiency of Indian Steel Industry, the secondary data have been used. As definition point of
view, the term secondary data refers to the statistical material which is not originated by the investigator
himself but which he obtains from someone else ‘s records9 ‖ As conclusion point of view inter firm
comparison has been made for analysis of financial performance of selected companies with the help of
various techniques of financial strength, i.e., Ratio Analysis and ANOVA. Secondary information
mostly collected from existing sources like publications of various ministries, namely, Ministry of Steel,
Ministry of Commerce, Ministry of Finance, Ministry of Heavy Industries and Public Sector
Undertakings, Government of India, Confederation of Indian Industries, Chamber of Commerce, world-
steel Association, Indian Institute of Metal Delhi, Joint plan Committee on Steel, and Industries, and
Bureau of Public Enterprises.

Methods used to collect and analyze data

Possible Problems Solutions

 Interviewing the Managing Director,  During vacations, will go to the

as the industry is in other region and I
live in a boarding school.
 Reluctance on the part of employees to
response interviews and may not give
un biased information.
 Adequate information was not
available about the company online
industrial unit to collect the data.
 Questionnaire with multiple choice
questions and some direct questions.
 Talking to local and experienced
industrialists.

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Main Results and Findings

SWOT Analysis

Strengths Weakness

Strength- Weakness-

1. The company is doing well in terms of goodwill 1. Bharat Steels’ marketing strategies
of the customers need to be improved.
2. The business gives quality service to the 2. Cost on hiring & training the
customers. workforce.
3. Good management & skilled workforce.

Opportunity Threat

1. Good economic conditions in the state for huge
businesses expansion in this line of activity i.e.
Iron & Steel and cement
2. Local policies and regulations favor widening of
business scope.
3. Huge structural steel demand is envisaged in this
region due to new capital of AP
1. High competition from new players in
this region
2. Online marketing & E commerce
websites are becoming a major threat
to conventional trade
3. Introduction of direct outlets of major
steel producers will effect on working
margins and turnovers.

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 Ansoff matrix
Existing New

Existing Market Penetration Product Development

new Market Development Diversification

Since Bharat Steels is aiming to increase their market share and profit margin,
they should focus mainly on Market Penetration strategies.

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Graphical representation
Sales Revenue

sales revenue
37200000
37000000
36800000
36600000
36400000
36200000
36000000
35800000
35600000
35400000
2013 2014 2015 2016 2017

The above graph shows the sales revenue and there is increase in the sales revenue from
the year 2013- 2017

Total Expenses

Total expenses
29200000

29000000

28800000

28600000

28400000

28200000

28000000

27800000

27600000
2013 2014 2015 2016 2017

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The above graph shows the total expenses from the year 2013-2017 and the
expenses are decreasing.
Profit

profit
10000000
9000000
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
2013 2014 2015 2016 2017

The above graph indicates the profits from the year 2013-2017.
Market Share

Market Share of the businesses in the region

3% Kantipudi steels Pvt
limited
8%
Vijaya steel corporation
33%
14%
Bharat Steels

Madhuri steels
20%
A S steel traders
22%

others

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Financial Analysis
1) Net profit Ratio
Net profit/sales revenue*100
48, 45,907.37/15,158,875*100
31.96%
2) ROCE – Return on Capital Employed
Net profit before tax/ capital employed*100

1. Net profit Ratio

Net profit Ratio =

Net Profit Ratio=

= 31.96%

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Analysis and discussion
Bharat steel has proposed to increase its market share and make its presence felt in the
pan Indian scenario eventually after the proposed market penetration. The business is
planning to adopt quite a change in its business and marketing strategies. The research
proposal focuses on (based on primary research and with few secondary research
information) on how best the business can go in for this increase in the market share and
customer base. The analysis has taken into consideration the business tools, financial
analysis of the business and graphical presentations.

SWOT business tool helps to identify the strengths and weaknesses of the business
during the process of marketing strategy and the expected result after the increase in
market share. The company is doing well in terms of goodwill of the customers and
the business gives quality service to the customers. Good management & skilled
workforce. Increase in competition due to entry new manufacturers into might make
the competition tough, which the business has to face and sustain its position. It need
to improve in the marketing strategies need to be improved and cost on hiring &
training the workforce. Bharat steel also has huge opportunity to good economic
conditions in the country for businesses including Iron & Steel and government
policies and regulations favors business start-up and expansions.

Since Bharat Steels is aiming to increase their market share and profit margin they should
focus mainly on Market Penetration strategies.

Graphical Presentation

The above graph shows the sales revenue, total expenses and profit of the company
Bharat Steel from the years 2013-2017 and the sales revenue is increasing every year.
And the total expenses are very being decreasing. Due to this the profit of the company
Bharat Steel is increasing.

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Return of Capital Employed (ROCE) is a financial ratio that measures a company’s
profitability and the efficiency with which its capital is employed.

The ROCE value is derived by using the above formula is 15.54% for the year 2017 it is
good and the ways which it can improve are is by maintain operating profit but reduce the
value of capital employed.

And even by calculating ratios like Net Profit Margin Ratio (NPM) it reveals the
remaining profit after all the expenses like costs of production, administration have been
deducted from sales. Accordingly, Margin above 25% indicates financial efficiency and
stability so here it is 31.96% it means that it is good.

It is evident from the analysis that the position of the business is quite positive. The
business is proposing to evolve and implement effective business strategies, focusing on
the marketing aspects, to make the proposal of increasing the customer base and market
share in a better way.

The research proposal focused on the analysis of the primary research in the form of
graphs, secondary research in the form of financial analysis and effective application of
business tools to highlight the position of the business as well as the evaluation of it
proposed strategies.

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Conclusion and Recommendations

The research proposal investigated Bharat steel for changing its marketing strategies by
increasing its market share in its market region (Andhra Pradesh). The enhancement of
marketing strategies will result in increasing its market share and customer base. With a
healthy financial position of the company Bharat steels business can go ahead with its
proposal. As an iron and steel industry business, there is a good scope for them go for
market penetration. However, the following recommendations given as part of
investigation can be considered by the business to make the proposal successful.

 The business has to implement improved marketing strategies, such as, promotion,
good quality service to clients and good sales promotional techniques to attract
customers
 There are many competitors, Bharat steels needs to make their presence felt in the
market, hence innovative strategies and customer wants can be tailor made.
 The business needs to hire trained workers and other workforce and give adequate
motivation for them to serve better.
 Bharat Steels, once implemented the strategy of market penetration effectively,
they can go in for market development – expand their business to other regions
also in the future.
 Focus on quality management, quality assurance in the process is required for them
to win over the customers.

From the analysis and results shown given a favorable condition for iron and steel
market in India and overseas, Bharat steels can have an advantage in the trade scenario of
Indian Iron and Steel industry. It is optimum time for them to go for changing the
marketing strategies and increase in the market share. The firm can go for expansion and
enter new market segments for better visibility of its brand. This will enhance the firm’s
image amongst its competitors.

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Bibliography

https://www.indiamart.com/bharatsteels-guntur/

Paul Hong

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Appendix- 1

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Appendix-2

Appendix-3
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 Questionnaire

1. Since when have you been running this business

Ans: We have been running the business since 1992
2. What is the current market share sales of the sales of your company?
Our current market share is 20%

3. What are all products your company offers?

Our company offers iron rods, cement and steel.
4. Where are all your products sold?
We offer our company’s products in Guntur, Visakhapatnam, Rajahmundry and
Vijayawada.
5. Who are your major competitors in Andhra?
The major competitors for our company are Kantipudi Steels, Vijaya Steels
Corporation and Madhuri Steels.

6. Do you have any plans of increasing your market share?

Yes, among our company is in the idea of increasing the market share in our place.

The employees
1. What is your name?
My name is Lagadapati Rajagopal
2. What is your occupation?
I am currently working as a chief engineer in Bharat Steels pvt ltd.
3. For how long have you been working as an employee in this company?
I have been working for 7 years in the company
4. Can you see a clear link between your work and the company goals and
objectives?

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 Yes, the company always discusses the present objectives and goals with their
employees and will give the
5. Do you have a good understanding of informal structures and processes at the
organization?

6. Is your working hours flexible?

7. Are there any fringe benefits provided by the company?

Customer
1. What is your name?
2. Are you happy with the products offered by the company?
3. Is the quality offered by the company up to the standard?
4. Have you ever contacted customer care?
5. If you contacted customer service have all problems been resolved to your
complete satisfaction?

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