Fordham -How effective decision-making is within the IT department - Analysis...
Business policy
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2. Strength Weakness Unscientific mining Low productivity Coking coal import Dependence 4. Low R&D investment 5. Inadequate infra structure Availability of Iron ore and coal Low labor wages rates Abundance of quality manpower Mature production base Opportunity Unexplored rural market Growing domestic demand Export Consolidation Threats China becoming net exporter Protectionism in the west Dumping by competitor Increase in price of raw material especially cooking
3. Objective The objective of the project is to build one of the world’s most competitive steelworks with advanced technology and stable iron ore supply from captive mines, together with the economic development of Orissa. The Sustainable Competitive Advantages will be attained when the strengths of India and POSCO are combined. India’s huge growth potential, human resources, its open policy, and vast natural resources create an ideal environment for investment. We believe POSCO India can effectively utilize these resources, in combination with POSCO’s experience for successfully constructing and operating 2 integrated steel plants in Korea, along with its advanced technology and solid financial structure. National Steel Policy (NSP), 2005 estimates that India’s steel production of 40 million tons in 2005-06 will rise to 110 million tons by 2019-20. With the changed scenario it is expected that the steel production will skyrocket to 200 million tons by 2019-20. The government is actively encouraging steel consumption so that the steel industry will act as the locomotive for economic growth. To realize this goal and catapult India into a steel superpower, POSCO India will contribute 12 million tons per annum from its envisioned Greenfield project.
9. Threats 1. China becoming net exporter 2. Protectionism in the West 3. Dumping by competitors
10. Objective Strategic Goal: The long-term goal of NSP - 2005 is that India should have a modern and efficient steel industry of world standards, catering to diversified steel demand. The focus of the policy would, therefore, be to achieve global competitiveness not only in terms of cost quality and product-mix, but also in terms of global benchmarks of efficiency and productivity. This would require indigenous production of over 100 million tonnes (mT) per annum by 2019-20 from the 2004-05 level of 38 mT implying a compounded annual growth of 7.3 per cent per annum. The above strategic goal is justified on the ground that global steel consumption, around 1000 mT in 2004, is expected to grow at 3 per cent per annum to reach 1,395 mT in 2015, compared to 2 per cent per annum in the past fifteen years. China would continue to have a dominant share of the world steel demand. At home, the Indian growth rate of steel production over the past 15 years was 7 per cent per annum. The projected Indian growth rate of 7.3 per cent per annum compares well with the projected national income growth rate of 7-8 per cent per annum, given an income elasticity of steel consumption of around 1.
11. SWOT Analysis of India’s Steel Industry The strengths, weaknesses, opportunities and threats for the Indian steel industry have been tabulated below. NSP-2005 lays down the broad roadmap to deal with all of them.
12. Strategy A multi-pronged strategy, as laid down in NSP – 2005, is directed at a long-term policy goal. On the demand side, the strategy would be to create incremental demand through promotional efforts, generate awareness and strengthen the delivery chain, particularly in rural areas. On the supply side, the strategy would be to facilitate the creation of additional capacities, remove procedural and policy bottlenecks in the availability of inputs, make higher investments in R&D and HRD, and, encourage the creation of physical infrastructure.
