2. INTRODUCTION
• Indian multinational steel-making company, based in Jamshedpur, Jharkhand
• Headquartered in Jamshedpur, Jharkhand.
• It is a member of the Tata Group.
• With a combined revenue of $32,836 million for the fiscal year 2022, Tata Steel, formerly known as Tata Iron
and Steel Company Limited (TISCO), is the tenth-largest manufacturer of steel in the world, with a capacity to
produce 34 million tonnes of crude steel annually.
• CORE VALUES: The five core values abided by Tata Steel are – integrity, unity, pioneering, excellence, and
responsibility.
• MISSION STATEMENT: Consistent with the vision and values of the founder Jamshed Tata, Tata Steel strives
to strengthen India's industrial base through the effective utilization of staff and materials. The means envisaged
to achieve this are high technology and productivity, consistent with modern management practices.
• VISION: We aspire to be the global steel industry benchmark for Value Creation and Corporate Citizenship.
3. INDUSTRY ANALYSIS
1. INTENSITY OF RIVALRY
There is an extreme degree of contest or rivalry in the media and the entertainment biz,
connecting with organizations to point to keep up with the ongoing purchasers through
offering administrations at financial plans cordial or reasonable expenses.
2. THREATS OF NEW ENTRANTS
Legal cost.
Marketing expense.
Distribution cost.
Licensing cost.
4. INDUSTRY ANALYSIS
3. THREAT OF SUBSTITUTES: The threat of alternatives in the market position moderate threat level in media
and show business. The business is fascinating among competitors from rivals using comparable services through
online streaming and rental DVDs. The client might also take part in other recreation and source of info as
compared to watching media content and online streaming.
4. BARGAINING POWER OF THE BUYER: Customers have a lot of bargaining power because of the
characteristics of the media and entertainment industry. The income and sales generated by the company are based
on customers located in various parts of the world. Similarly, the low cost of switching allows customers to switch
to another media provider and cancel their Porter's 5 Forces of Tata Steels Acquisition Of Corus Case Help
subscription, increasing the business risk. As a result, the company may not charge high rates for services provided
to clients, and it should maintain a pricing strategy based on customer demand, with minimal rate increases.
5. BARGAINING POWER OF SUPPLIERS: Suppliers wield considerable bargaining power in the market. This
is because there are several that create entertainment and media-based content. Given Porter's Five Forces Analysis
of Tata Steel's Acquisition of Corus, Help has been competing against traditional suppliers of entertainment and
media, so it must demonstrate greater agreement flexibility than traditional businesses. The items are technology-
based, and the business's reliance on them is growing on a regular.
5. MICROENVIRONMENT – PESTEL ANALYSIS
1. POLITICAL FACTOR OF TATA STEEL:
Investment in Unstable Political Countries: Though Tata steel made various acquisitions for the growth of the company
and for the reason of the expansion of the business they took a very high amount of risk by investing in the countries like
Bangladesh, Iran, and Thailand. For example, the plan set up in Bangladesh is getting delayed by the question of gas
supply, whereas the issue of lease of the mining of the iron ore in Iran country is responsible for the increase in the cost of
the production.
Infrastructural Development in India: Now a day’s government is launching various schemes for the development of the
infrastructure of roads and transport. Every year Tata steel and other steel industries in India spend a huge amount on
freight and transportation with the launch of various schemes in infrastructure company could be able to save some amount
that the company spends on freight and transportation.
Effects of Liberalization: The various liberalization schemes launched by the government after the year 1991. when the
Indian economy opened globally, is responsible for the tremendous growth in the various sectors but particularly in this
sector.
Apart from this the mining policies of the government and other policies helped Tata steel in the reduction of import duty
and export duties and other things which are responsible for the high growth of the Tata steel industry globally.
6. MICROENVIRONMENT – PESTEL ANALYSIS
2. ECONOMICAL FACTOR:
Two years back the United States economy faces the SUBPRIME CRISIS which affected
every strong economy in a very negative way. During this period there was a very high
risk in the international capital markets regarding liquidity. With the acquisition of
CORUS company gained a growth prospective in nature but, the cost of acquisition goes
beyond the financial expectations. The steel industry may get affected because of the
cyclical economic condition because many industries like automobiles, appliances, and
construction depend on the steel industry.
3. SOCIO-CULTURE FACTOR:
TATA STEEL got awarded for its commitment to business ethical behavior and improving
the lives of employees and their families. For this purpose, Tata, steel got awarded the
GON PEACOCK GLOBAL AWARD. TATA STEEL also focused to create a social
environment.
7. MICROENVIRONMENT – PESTEL ANALYSIS
4. TECHNOLOGICAL FACTOR: In the middle of 2000, Tata Steel and SAIL (India's steel
regulator) launched the E-PORTAL system. This technology sometimes referred to as the METAL
JUNCTION, benefits not only Tata Steel but the entire industry as a whole.
5. ENVIRONMENTAL FACTOR: Tata steel is designing a program in which Tata steel would be
able to reduce the CO2 emersion by 20 %. The DHAMRA port is the joint venture of LASRSEN
AND TOUBRO and TATA STEEL that came into existence for the protection of the Olive Ridley sea
Turtle & also supports saving water crocodiles as well as providing the breeding grounds for
horseshoe crabs and other rare species of reptiles and amphibians.
6. LEGAL FACTOR: The main importance is given to the employee’s safety at the workplace Tata
steel ensures the EHS (ENVIRONMENTAL HEALTH AND SAFETY) under which every employee’s
activity is managed by the EHS framework.
8. INTERNAL ANALYSIS
STRENGTHS: Tata brand is well established in the international market with a huge product portfolio for items with
multiple industrial requirements. ranging from Agriculture to Automobiles, it has industrial solutions for all types of needs
of its customers & has a well-established supply chain.
WEAKNESS: Unlike its Indian counterpart, the European operations of the company are not internally integrated and thus
rely heavily on suppliers. Also, approximately 50% of the company’s revenue has its source in the European market which
increases the risk factor for the revenue generation of the company dependent on the European economic performance.
CAPABILITIES: The company can cater to a wide variety of industrial requirements of steel products as they have a wide
product portfolio & build upon that knowledge and cater to upcoming and new technological requirements. Multi-level
integrated Enterprise Resource Planning Systems to streamline the resource division and planning communication between
all levels of decision-making authorities in the company hence increasing the overall utility of the limited resources of the
company.
RESOURCES: One of the strategic resources of the company is its high-reach supply chain in the Indian market because
of which it can penetrate its existing market with any new product offerings it has which reduces the overall costs attached
to launching a new product.
9. CENTRAL PROBLEM – 3S FRAMEWORK
STRATEGY:
Make sustainable products keeping the environment into consideration. Investing in initiatives to enhance their service and product mix.
Reorganizing our internal supply chain to raise customer service standards. Maintained a reduced pricing strategy due to an increase in the
demand for steel, access to cutting-edge technology, and the company's practice of sourcing its raw materials from nearby locations
SYNERGY:
Tata Steel is a corporation that values innovation and combines providing individualized customer service with a creative flair for coming up
with fresh concepts. Invests heavily in the development of life cycle assessment models for numerous sectors. Use the latest technology to
provide metal solutions. Tata Steel Europe is also engaged in a significant research and development project called ULCOS (ultra-low CO2
steelmaking) with other steelmakers in Europe to create ground-breaking technologies that can cut CO2 emissions per ton of steel produced
by at least 50%.
SYSTEM:
Work in collaboration with top global universities and research institutes, as well as key customers in the automotive, transportation,
packaging, and construction industries, they supply metal solutions to Tata Steel manufacturing sites across the world. They have a culture of
diversity and innovation. They encourage a high-performance culture and support it through various rewards and recognitions.
10. CENTRAL PROBLEM – 3S FRAMEWORK
Tata Steel has already made sufficient efforts to the achievement of the above-mentioned strategies.
Tata steel is an integrated Steel from having its mines to processing and marketing its product, Company has
achieved leadership in Steel manufacturing owing to the Scape and other rations it carries out. The problem here is
the challenge faced in terms of logistics. In India, unlike several other countries, most of the steel plants are located
in inland remote areas to get closer to the raw material source. This affects the outbound logistics to reach the
customer timely. So hence, this capital-intensive sector pins its hopes on a steady demand to continue financing its
huge debt.
Steel sector sales are cyclical, meaning, they shall go up when there is a boom and decline when there is a slump. A
growth in infrastructure and related activities growth, the automobile sector, the telecommunication sector, and
other household-related sectors could be the solution to this problem as well. Each of these sectors has its
determinants for the automobile sector, crude oil prices could be a determinant. Hence, the demand can keep
fluctuating, increasing the risk of financial leverage. Thanks to the rise in global steel prices, Tata Steel reduced its
debt to Rs 51,049 crore.
11. COMPETITIVE POSITIONING – VIP FRAMEWORK
Value:
Value to the customers: Determining consumer demands by utilizing several active listening and
learning strategies. Analysis and prioritization of input. A review of the viability and assessment
of "potential value for customers.” Multidisciplinary teams carrying out pilot initiatives. Projects
are being monitored.
Value to the organization: Consolidated EBITDA of Rs 15,047 crores. EBITDA margin
improved to 24% while EBITDA per ton increased by Rs 3,780 to Rs 22,717. Revenue per ton
rose by Rs. 8,534 QoQ to Rs. 83,625 per ton due to long-term contracts and product mix.
Reported EBITDA stood at Rs.9,582 crores, which translates to an EBITDA per ton of Rs
23,557.
12. COMPETITIVE POSITIONING – VIP FRAMEWORK
Imitation:
• Strategies used by Tata Steel Limited to prevent imitation by other market players:
• one of the most geographically diverse steel producers in the world; integrated steel
operations from mining to manufacturing and selling finished goods; capability and
adaptability to changing market trends.
• The customer's trust in TATA.
• A strong line of products.
13. COMPETITIVE POSITIONING – VIP FRAMEWORK
Perimeter:
• Diversification: Conglomerate-based diversification that is unrelated. This approach expands the
company's reach beyond its current markets and goods. the most geographically diverse steel
manufacturers in the world, with operations and a commercial presence everywhere.
• Integration: Tata Steel has vertical integration, which involves the production of GO steels, and creates
non-grain oriented (NGO) material. Vertical integration in the production of high-quality HiB grades was
accomplished in electric steels.
• Outsourcing: It outsourced secondary products to Metaljunction.com
• Internationalization: Tata Steel moved up to position six among the biggest steelmakers in the world
after purchasing the British steelmaker Corus (Noronha, 2007). They paid £6.7 billion to acquire Corus,
the second-largest steelmaker in Europe at the time, making it the most expensive acquisition ever done
by an Indian company (Noronha, 2007; The Economist, 2011). Tata Steel Group acquired the steel
business of Usha Martin Limited through one of its subsidiaries.
14. COMPETITIVE POSITIONING - DELTA MODEL
FRAMEWORK
System Lock-in: Tata Steel Limited is the market leader occupying a great position. The
following factors contributed to its success: Location, availability of raw materials, power
and water supplies, labor force, market, and transportation infrastructure are some of the
factors to consider. It has both digital and physical channels providing ground delivery with
a heavy distribution network.
Customer Solutions: delivers value to our clients through an integrated supply chain that
starts with raw material mining, continues with the production of various grades of crude
steel, and ends with the creation of customized steel products creating trust-based
relationships. Also, it provides highly valued differentiated products that include
Automotive Steels, Galvano, Tata Astrum, Tata Bearings, Ferromag, Tata Pipes, Tata
Precision Tubes, etc.
15. COMPETITIVE POSITIONING - DELTA MODEL
FRAMEWORK
Best product positioning: Provides best products with relevant costs. Having a
diversified product portfolio provides a wide range of products to customers and
hence caters to customers’ needs. It has great innovative technology. The first brand
of steel agricultural equipment in India, Tata Agrico, was introduced in the 1920s.
Tata Tiscon was the first to launch a retail brand of reinforcement bars. Tiscon
Superlinks was the first company to market branded stirrups; they are also sold
online. Tata Tiscon was the first to introduce branded footing. Tata Steel is
positioned as one of the lowest cost markers of steel internationally. Recently
launched corporate brand campaign of tata steel is., #WeAlsoMakeTomorrow
underlines the Company's focus on the future, positioning Tata Steel as an
enterprise that is technologically advanced and innovative. The tagline used by
them is., “Customer First-Har Haal mein”.
