MAN 790 Strategic Management

Final Learning Project

Strategic analysis
Strategy Formulation
Strategy Implementation

Submitted By
Gaurav Agarwal
 Guide:
Karin Sixl-Daniell
Company Overview
Business Operations
Hindalco Industries, a flagship company of the
Aditya Birla Group, is a leading player in
the global non-ferrous metals industry, with a
focus on aluminum and copper.
Global Presence
With operations in 10 countries, Hindalco has a
diverse geographical footprint, encompassing
Asia, Europe, and the Americas and serves a
wide range of industries.
Market Position
Hindalco's strategic acquisitions and sustainable
practices have positioned it as a key player in
the aluminum and copper segments, catering to
both domestic and international markets.
 Product Portfolio
Aluminum Segment
Hindalco's aluminum business includes bauxite
mining, alumina refining, and aluminum
smelting, offering a comprehensive range of
products for various industrial applications.
Copper Segment
In the copper segment, Hindalco is engaged in
the production of copper cathodes, continuous
cast copper rods, and other copper products,
serving diverse sectors such as electrical,
automotive, and construction.
Value-added Offerings
company's value-added products, including
extrusions, foils, and rolled products, cater to
specialized requirements, enhancing its market
competitiveness.
 Strategist’s Challenge
1)Value
2)Opportunities
3)Capabilities
Capabilities
Value Opportunity
1) Integrated Operations:
“To be a premium 1) Risk Management
metals major, and Opportunities: 2) Scale and Efficiency:
global in size and 3) Diverse Product Portfolio
reach, excelling in
2) Strategic Initiatives 4) Innovation and R&D:
everything we do,
and Growth 5) Global Presence:
and creating value
Opportunities: 6) Strong Brand and
for its
Reputation:
stakeholders”.
7) Focus on Sustainability
 Thread of Entry

Capital Intensity Economies of Scale Regulatory Hurdles

The non-ferrous Hindalco's economies of Stringent regulatory
metals industry scale and operational requirements and
demands efficiencies create entry environmental standards
substantial capital barriers for new players, pose entry challenges,
investments, acting making it challenging for requiring new entrants to
as a barrier to new them to compete on cost navigate complex
entrants and and production compliance frameworks,
safeguarding the capabilities. favoring incumbents like
market position of . Hindalco.
established players
like Hindalco.
 Bargaining Power of Suppliers
Supplier Diversity Raw Material Vertical Integration
The company's Procurement Hindalco's vertical
diversified supplier Hindalco's strong integration across
base and global supplier the value chain
sourcing relationships and empowers it to
capabilities reduce backward negotiate favorable
dependency on integration terms with
individual strategies mitigate suppliers,
suppliers, the bargaining minimizing the
enhancing power of raw impact of supplier
negotiation material suppliers, bargaining power on
leverage and ensuring a stable its operations.
supply chain and cost-effective
resilience. supply chain.
 Bargaining Power of Buyers
Industry Product Long-term Contracts
Concentration Differentiation The company's long-
The concentration Hindalco's focus on term contracts with
of buyers in the product quality, key buyers and
non-ferrous metals customization, and strategic customer
industry limits value-added relationships reduce
their individual offerings enhances the impact of buyer
bargaining power, its bargaining bargaining power,
allowing Hindalco power, enabling it ensuring stability
to maintain to cater to diverse and predictability in
competitive pricing buyer sales and revenues.
and value requirements and
proposition. preferences.
 Threat of Rivalry
Market Processing Costs Customer Allocation:
Dominance Regulatory Hindalco and Vedanta
Hindalco and Despite differences were accused of
Vedanta are the in capacities, splitting customers
only three domestic sources, and raw between them, with
producers in India material costs, both neither approaching the
engaged in the companies other’s customers
production of had identical
refined copper. processing
Together they share costs for converting
80 to 90% market copper concentrate
share into saleable
products (copper
rods and copper
cathodes).
 Threat of Substitutes
Product Industry Customer Loyalty
Uniqueness Regulations The company's
Hindalco's Regulatory strong customer
specialized product standards and relationships and
portfolio and industry brand reputation
value-added certifications foster loyalty,
offerings reduce create barriers for reducing the
the threat of substitute propensity for
substitutes, as its products, buyers to switch to
products cater to reinforcing the substitute materials,
unique industrial demand for thereby mitigating
applications and Hindalco's non- the threat of
specific customer ferrous metal substitutes.
needs. offerings in critical
sectors.
SWOT ANALYSIS
 Strength and weak
Strengths Weakness
a)Fully Integrated business model a) Commodity
b)b) Dominant player in India across product (upstream)
upstream and downstream b) Smaller market
c) Utkal - among the world’s most share in Extrusions
economical and efficient Alumina and Foils
producers; with capacity expansion of 500 c) Upstream business
kt Utkal capacity reached 2.1 Mt in linked to LME
FY2021-22 volatility.
d) Increased focused on Value Added
Products (VAP) will lead the company to
be delinked from LME
e) Market leadership in Flat Rolled Products
 Opportunity & Thread
Opportunity Thread
a) Immense headroom for a growing market in India; a) LME, Forex, and raw
Per Capita Aluminium consumption in India at 1/4th material price volatility
of global average b) Competition from China
b) Rising Aluminium Consumption in the end use in the downstream
segments like Building & Construction, Automotive, c) Rising imports of scrap
Packaging, and Consumer Durables
d) Increasing imports of
c) Substitution opportunity versus steel, uPVC, wood,
VAP from the Free Trade
among others.
Agreement (FTA) countries.
d) Light-weighting initiatives in commercial vehicles,
e) Domestic availability/
personal mobility, etc. leading to a higher Aluminium
shortage of resources
adoption in the country.
(mainly coal)
e) PLI scheme for White Goods and proactive trade
measures by the Government to help in import
substitution.
Competitive Strategy
 Competitive Strategy
Innovation and Differentiation Market Expansion
Hindalco's focus on product Strategic diversification and market
innovation, technological expansion initiatives will enable
advancements, and value- Hindalco to tap into new
added solutions is pivotal in geographies and industry segments,
sustaining its competitive edge bolstering its competitive position.
and market leadership.

Sustainable Practices
The integration of sustainable practices
and environmental stewardship into its
business strategy will enhance Hindalco's
brand equity and competitiveness.
 Conclusion
Hindalco Industries Limited emerges as a dominant player in the
aluminium industry with a comprehensive value proposition, extensive
geographic presence, and diverse capabilities. Bolstered by the acquisition
of Aleris Corporation, Hindalco solidifies its position as the world's
largest flat-rolled products player and aluminium recycler. Its state-of-the-
art facilities and integrated operations spanning bauxite mining to
downstream rolling underscore its industry leadership. With a focus on
sustainability, technological innovation, and a robust track record of
profitability, Hindalco stands out as a global metals powerhouse, poised to
capitalize on future opportunities and contribute to India's industrial
growth.
 References
IBM SWOT
Analysis 2024: In-Depth Report With Infographics (swotwizard.com)
IBM_Annual_Report_2023.pdf
THANK YOU