This is SWOT analysis of Tata Steel company which is a company of Tata Group.

1. SWOT Analysis of Tata Steel
By NevilleP, eHow Contributor , last updated April 17, 2014
Four quadrants of SWOT analysis are strengths,
weaknesses, opportunities and threats.
SWOT analysis is an examination of the strength, weakness, opportunities and
threats faced by a company during its phase of operation. A SWOT analysis is
important for Tata Steel to evaluate its current position and formulate
strategies to tackle its competitors.
1. Strengths of Tata Steel
o Tata Steel is the pioneer of steel business in India and thus enjoys brand equity.
Tata Steel has a multiple companies under the same banner, which gives it an
advantage of value-chain efficiency, whereby the company can utilize products
made in its sister companies to process raw materials and increase efficiency.
Weaknesses of Tata Steel
o The biggest weakness of Tata Steel is its increasing debt-to-equity ratio. Most of
its assets are financed by debt, which can be dangerous in the long-run. Tata Steel
largely depends on domestic and a few international markets for generating
business. This over-dependence can prove to be fatal in times of economic crisis.
Opportunities for Tata Steel
o Tata Steel is branching out to overseas market. The company has recently signed
a deal with Corus group, which provides access to European markets. Tata Steel
will now be in a position to utilize the R&D facility and the patents owned by the
Corus group. Exposure to new technologies and markets is a big advantage for the
company.
Threats to Tata Steel
o In the current scenario, the biggest threat for Tata Steel is to maintain the Co2
emission standards when it starts its operations in Europe. The sudden overseas
exposure along with a possible economic slowdown is the biggest challenge faced
by Tata Steel in the present circumstances.
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3. SWOT Analysis
SWOT is an acronym used to describe the particular Strengths, Weaknesses,
Opportunities, and Threats that are strategic factors for a specific company. A
SWOT analysis should not only result in the identification of a corporation’s
core competencies, but also in the identification of opportunities that the firm
is not currently able to take advantage of due to a lack of appropriate
resources. (Wheelen, Hunger pg 107)
The SWOT analysis framework has gained widespread acceptance because
it is both simple and powerful for strategy development. However, like any
planning tool, SWOT is only as good as the information it contains. Thorough
market research and accurate information systems are essential for the
SWOT analysis to identify key issues in the environment. (Marketing and Its
Environment, pg 44)
Assess your market:
 What is happening externally and internally that will affect our
company?
 Who are our customers?
 What are the strengths and weaknesses of each competitor? (Think
Competitive Advantage)
 What are the driving forces behind sales trends?
 What are important and potentially important markets?
 What is happening in the world that might affect our company?
 What does it take to be successful in this market? (List the strengths all
companies need to compete successfully in this market.)
Assess your company:
 What do we do best?
 What are our company resources – assets, intellectual property, and
people?
 What are our company capabilities (functions)?
Assess your competition:

4.  How are we different from the competition?
 What are the general market conditions of our business?
 What needs are there for our products and services?
 What are the customer-market-technology opportunities?
 What are the customer’s problems and complains with the current
products and services in the industry?
 What “If only….” Statements does a customer make?
Opportunity an area of “need” in which a company can perform profitably.
Threat
A challenge posed by an unfavorable trend or development that would lead (in
absence of a defensive marketing action) to deterioration in profits/sales.
An evaluation needs to be completed drawing conclusions about how the
opportunities and threats may affect the firm.
EXTERNAL: MACRO- demographic/economic, technological, social/cultural,
political/legal
MICRO- customers, competitors, channels, suppliers, publics INTERNAL
RESOURCES: the firm
Competitor analysis is a critical aspect of this step.
 Identify the actual competitors as well as substitutes.
 Assess competitors’ objectives, strategies, strengths & weaknesses,
and reaction patterns.
 Select which competitors to attack or avoid.
The Internal Analysis of strengths and weaknesses focuses on internal factors
that give an organization certain advantages and disadvantages in meeting
the needs of its target market. Strengths refer to core competencies that give
the firm an advantage in meeting the needs of its target markets. Any analysis
of company strengths should be market oriented/customer focused because
strengths are only meaningful when they assist the firm in meeting customer
needs. Weaknesses refer to any limitations a company faces in developing or
implementing a strategy (?). Weaknesses should also be examined from a
customer perspective because customers often perceive weaknesses that a

5. company cannot see. Being market focused when analyzing strengths and
weaknesses does not mean that non-market oriented strengths and
weaknesses should be forgotten. Rather, it suggests that all firms should tie
their strengths and weaknesses to customer requirements. Only those
strengths that relate to satisfying a customer need should be considered true
core competencies. (Marketing and Its Environment, pg 44)
The following area analyses are used to look at all internal factors effecting a
company:
 Resources: Profitability, sales, product quality brand associations,
existing overall brand, relative cost of this new product, employee
capability, product portfolio analysis
 Capabilities: Goal: To identify internal strategic strengths, weaknesses,
problems, constraints and uncertainties
The External Analysis examines opportunities and threats that exist in the
environment. Both opportunities and threats exist independently of the firm.
The way to differentiate between a strength or weakness from an opportunity
or threat is to ask: Would this issue exist if the company did not exist? If the
answer is yes, it should be considered external to the firm. Opportunities refer
to favorable conditions in the environment that could produce rewards for the
organization if acted upon properly. That is, opportunities are situations that
exist but must be acted on if the firm is to benefit from them. Threats refer to
conditions or barriers that may prevent the firms from reaching its
objectives.(Marketing and Its Environment, pg 44)
The following area analyses are used to look at all external factors effecting a
company:
 Customer analysis: Segments, motivations, unmet needs
 Competitive analysis: Identify completely, put in strategic groups,
evaluate performance, image, their objectives, strategies, culture, cost
structure, strengths, weakness
 Market analysis: Overall size, projected growth, profitability, entry
barriers, cost structure, distribution system, trends, key success factors
 Environmental analysis: Technological, governmental, economic,
cultural, demographic, scenarios, information-need areas Goal: To
identify external opportunities, threats, trends, and strategic
uncertainties

6. The SWOT Matrix helps visualize the analysis. Also, when executing this
analysis it is important to understand how these element work together. When
an organization matched internal strengths to external opportunities, it creates
core competencies in meeting the needs of its customers. In addition, an
organization should act to convert internal weaknesses into strengths and
external threats into opportunities.
Focus on your strengths. Shore up your weaknesses. Capitalize on your
opportunities. Recognize your threats.
Identify
 Against whom do we compete?
 Who are our most intense competitors? Less intense?
 Makers of substitute products?
 Can these competitors be grouped into strategic groups on the basis of
assets, competencies, or strategies?
 Who are potential competitive entrants? What are their barriers to
entry?
Evaluate
 What are their objectives and strategies?
 What is their cost structure? Do they have a cost advantage or
disadvantage?
 What is their image and positioning strategy?
 Which are the most successful/unsuccessful competitors over time?
Why?
 What are the strengths and weaknesses of each competitor?
 Evaluate competitors with respect to their assets and competencies.

7. Size and Growth What are important and potentially important markets?
What are their size and growth characteristics? What markets are declining?
What are the driving forces behind sales trends?
Profitability For each major market consider the following: Is this a business
are in which the average firm will make money? How intense is the
competition among existing firms? Evaluate the threats from potential entrants
and substitute products. What is the bargaining power of suppliers and
customers? How attractive/profitable are the market now and in the future?
Cost Structure What are the major cost and value-added components for
various types of competitors?
Distribution Systems What are the alternative channels of distribution? How
are they changing?
Market Trends What are the trends in the market?
Key Success Factors What are the key success factors, assets and
competencies needed to compete successfully? How will these change in the
future?
Environmental Analysis An environmental analysis is the four dimension of
the External Analysis. The interest is in environmental trends and events that
have the potential to affect strategy. This analysis should identify such trends
and events and the estimate their likelihood and impact. When conducting this
type of analysis, it is easy to get bogged down in an extensive, broad survey
of trends. It is necessary to restrict the analysis to those areas relevant
enough to have significant impact on strategy.
This analysis is divided into five areas: economic, technological, political-legal,
sociocultural, and future.
Economic What economic trends might have an impact on business activity?
(Interest rates, inflation, unemployment levels, energy availability, disposable
income, etc)
Technological To what extent are existing technologies maturing? What
technological developments or trends are affecting or could affect our
industry?
Government What changes in regulation are possible? What will their impact
be on our industry? What tax or other incentives are being developed that
might affect strategy development? Are there political or government stability
risks?

8. Sociocultural What are the current or emerging trends in lifestyle, fashions,
and other components of culture? What are there implications? What
demographic trends will affect the market size of the industry? (growth rate,
income, population shifts) Do these trends represent an opportunity or a
threat?
Future What are significant trends and future events? What are the key areas
of uncertainty as to trends or events that have the potential to impact
strategy?
Internal Analysis Understanding a business in depth is the goal of internal
analysis. This analysis is based resources and capabilities of the firm.
Resources A good starting point to identify company resources is to look at
tangible, intangible and human resources.
Tangible resources are the easiest to identify and evaluate: financial
resources and physical assets are identifies and valued in the firm’s financial
statements.
Intangible resources are largely invisible, but over time become more
important to the firm than tangible assets because they can be a main source
for a competitive advantage. Such intangible recourses include reputational
assets (brands, image, etc.) and technological assets (proprietary technology
and know-how).
Human resources or human capital are the productive services human beings
offer the firm in terms of their skills, knowledge, reasoning, and decision-
making abilities.
RESOURCE MAIN CHARACTERISTICS KEY INDICATORS
Tangible
Financial The firm’s borrowing
capacity and its internal
funds generation
determines its capacity to
weather fluctuations in
demand and profits
overtimes.
 Debt to equity ratio
 Ration of net cash to
capital expenses
 Credit rating
Physical The physical resources  Resale value of

9. related to plan, equipment,
assets, technology, raw
materials.
assets
 Age of capital
equipment
 Flexibility of PPE
Intangible
Technological Stock of technology in the
form of proprietary
technology (copyright,
patents, trade secrets) and
expertise in the application
of technology (know-how).
Reputation Reputation with customers
through the ownership of
brands, established
relationships with
customers, reputation of the
firm’s products and
services.Reputation of the
company with suppliers,
employees, etc.
 Brand recognition
 Price premium over
competing brands
 Percent of repeat
buying
 Level and
consistency of
company
performance
Human
Resources
Training and expertise of
employees determine the
skills available to the
firm.Adaptability of
employees determines key
aspects of strategic
flexibility of the
firm.Commitment and
loyalty of employees
determines the capacity of
the firm to attain and
maintain competitive
advantage.
 Educational, technical
and professional
qualifications of
employees
 Compensation
relative to industry
 Record of labor
disputes
 Employee turnover
Capabilities

10. Resources are not productive on their own. The most productive tasks require
that resources collaborate closely together within teams. The term
organizational capabilities are used to refer to a firm’s capacity for undertaking
a particular productive activity. Our interest is not in capabilities per se, but in
capabilities relative to other firms. To identify the firm’s capabilities we will use
the functional classification approach. A functional classification identifies
organizational capabilities in relation to each of the principal functional areas.
Functional Area Capability
Corporate  Financial
management
 Expertise in strategic
control
 Effectiveness in
motivating and
coordinating
business units
 Management of
partnerships
 Overall company
management/
resource
management
Information Management  Comprehensive and
effective information
system that can be
used for managerial
decision making
Research and Development  Capability in basic
research
Product Design  Design capability
Marketing  Brand management
and promotion
 Promotion and
exploiting reputation
for quality

11.  Understand of and
responsiveness to
market trends
Sales and Fulfillment  Effectiveness in
promoting and
executing sales
 Efficiency and speed
of fulfillment
 Quality and
effectiveness of
customer service

13. Strengths of TATA STEEL:
1.
Mineral Reserves
– Tata Steel has two collieries in West Bokaro and Jharia, in the
state of Jharkhand. The iron ore units are located in Noamundi,
Joda and Katamandi in the states of Jharkhand and Orissa. Tata
Steel Limited also has amanganese mines and dolomite quarries in
Orissa. These mines are located at an approximate distance of 150
km from Jamshedpur, home to the steel company's manufacturing
facility. The Steel Company's iron ore units produce 9 million tons
per annum of various grades of high quality iron ore including rich
blue dust ore. The company in India is having mines of 281 million
tones reserves in its mines in Jharkhand and thus having minerals
to cater its needs for more than 20 years. The company has also
been acquiring stake overseas in Canada, Mozambique,
Australiaetc. to boast its reserves for clean coking coal which is
rarely available in India.
2.
Management Team
- Tata Steel has a highly credible management team who has
displayed their skills in expanding the company through inorganic
route. The company has successfully acquired Nat Steel
of Indonesia, Millennium Steel of Thailand and more importantly
Corus. The company’s virtuosos of finance have been able to find
innovative ways to tackle the company’s bulgeoning debt and keep
thebottom line in the green zone despite lowering demand and huge
debts accumulated.
3.
Information Technology
- The entire mining operation of the Company is safeguarded
against accident occurrence. Proactive measures are undertaken to
ensure the employee's health and productivity through
ergonomically designed work stations and by protecting them from
occupational hazards. All its mines are ISO-14001 -Environmental
Management System Certified. Tata Steel's collieries use 'Surpac', a
state-of-the-art mine planning software that estimates the volume
of coal in every seam. This software is coupled with
qualitative detailing that focuses on output consistency. To
maximize productivity and utilization, a voice and data equipped
Global Positioning System is used, which helps to supervise mining
activity for machine movement and engine status.
4.
Innovativeness of TATA Steel with respect to its competitors
- TataSteel has the lowest operating cost for steel manufacture in
the world.
Further it has displayed effective means in adopting an eco-friendly
and sustainable approach towards the manufacture of steel thus

14. Proactive measures are undertaken to ensure the employee's health
and productivity through ergonomically designed work stations and
by protecting them from occupational hazards.
5.
Adaptability of the company in the fast change of the
environment
- Tata Steel has displayed immense agility in the recent past during
the globalfinancial tsunami. Its virtuosos of various fields have
adopted variousmethods like lowering of production and even
shutting down of steel plantsowing to the lack of demand, managing
the balance sheet efficiently etc. Thecompany has 70% of its
procurement of raw materials for its operations inAsia through long
term contracts and so its margins can be shielded from thenuances
of the volatility of the financial markets.6.
Brand value
- The TATA brand owing to its highly ethical and a socialistic
approach to business have made its name synonymous to
trust. After the acquisitionofCorus anotherpowerful brand, the brand
value of the company has enhanced further.7.
Corporate governance
- Tata Steel has had impeccable record for corporate governance. It
has set the benchmark in global corporate governance principles of
transparency, accountability and equity for others to follow. Tata
Steel has been consistently receiving prestigious awards at both the
national and the international arena. Recently it bagged the Best
Governed Company Award for corporate practices presented
by Asian Centre for Corporate Governance.8.
Excellent integration with Corus
– Corus has a great reserve of around2000 metallurgists and
technology which could be exploited by Tata Steel on several
fronts.9.
Excellent procurement philosophy
- Tata Steel has around 70% of its supplies throughlong term contracts.
Thus it can be shieldedfrom the volatility of the financial markets.10.
Spawning upon opportunities
- Tata Steel has been amongst the earliest to spot the escalation
in the demand for steel in the forthcoming years. It has hence
invested heavily in the expansion of its existing facility at
Jamshedpurand is setting up other green field projects at Orissa,
Jharkhand etc.

15. Weaknesses of TATA Steel-
1.
Huge debt burden
- Tata Steel is having a total debt of 10.2 billion USD in its books. It
has a debt equity ratio 0f 1.6 which means that the assets of the
company is largely financed through debt. With the inflation on
a rise the central banks of most all the countries are intending to
tighten in the liquidity in the money markets. As a result of which
the interest rates are on a rise. In India the banks are mulling the
option of a rate hike and most analysts feel that the RBI is going to
increase the repo rate by almost 100 bps further after a CRR hike of
75 bps in late February this year. Thus it would add to the interest
burden of the company which would further increase the liabilities
of the company and thus degrade the quality of its balance sheet
further.2.
High attrition rate
- Tata Steel has traditionally faced the brunt of high attrition rate.
In its Jamshedpur plant many engineers constantly change
their jobs to SAIL in Bokaro and vice-versa. Thus the formation of a
core team of capable individuals across all departments is
very difficult as the size of the team is ever changing.3.
Products in the portfolio lacking demand-
The company has certain products in its portfolio like aerospace
steel which lacked demand in the recent past. Primarily due to
the slow down of the aviation sector which led to delay in the
delivery of aircrafts as a result of cutting of capacity by airlines. The
company also had certain Cast products largely marketing in
the UK which has been witnessing slowdown in demand since 2001.
Hence the company had to close down its Tee Side plant.4.
Degradation in brand value owing to job losses-
TATA group has made its name synonymous to job security of
it employees. But the shutdown of its plants in the UK and The
Netherlands will dent its image to a certain extent. As a result
of which around 1600 employees would lose their daily livelihood.5.
Low cost recovery
– There are specific products like the aerospace steel and cast
products which has received feeble response in the past. The
company has failed to recover costs in this business front.6.
Laggard in technological front
- Companies like SAIL has efficiently introduced the XRF (X-Ray
Fluorescence) in its plants at Durgapur and Bokaro over 12 months
back which the Tata Steel has failed to do.7.
Bad raw material procurement philosophy of its subsidiaries-
The largest subsidiary of Tata Steel,
Corus has high exposure to spot prices and a higher operational gearing
among the larger European steel companies. Hence it has the risk of volatility
associated with pricing, one of the key elements in determining profitability of
a commoditycompany.

16. Opportunity
1) Competitive position of the company-
Tata Steel is the second largestproducer of steel in India and the
sixth largest producer in the world.2.
2) Newertechnologies –
i)
The Corex process
combines an iron melter/coal gasifier vessel with a pre-reduction
shaft to produce a liquid product that is very similar toblast furnace
hot metal. Coal, oxygen, and pre-reduced iron are fedinto the
melter/gasifier to melt the iron and produce a highly reducingoff-
gas.ii)
The HIsmelt process
Iron reduction and coal gasification take placein a liquid metal
bath. The fundamental processes of HIsmelt began with early
experiments in Germany with bottom-blown oxygen steel making
converters (LD, LD-AC, KMS, among others) to allow for coal, lime,
and/or iron ore injection through the bottom nozzles
iii) Direct Iron Ore Smelting
(DIOS) process in Japan and the AISI directsteelmaking process in
North America produced two similar routes tohot metal production.
Both processes utilize a smelting reactor wherethe primary
reactions occur in a deep slag bath as opposed to in themetal
phase.3.
3) Opportunities in the field-
India has geared up for rapid expansion in thefield
of infrastructure. The Government of India (GoI) has earmarked
Rs.1, 70,000 crore for infrastructural spending for the fiscal year
2010- 2011 and the trend is set to escalate up to the fiscal year
2025 when India is slated to become the third largest economy in
the world. Further many private players either independently or by
undergoing public private partnerships (PPP) has also come into the
fray. The consumption of steel has been steadily increasing with the
rapid investment in the infrastructure and real estate projects. The
annual steel production of India has touched 200MT and according
to governments steel policy is expected to touch around 250 MT by
2013-2014. The demand for Indian made steel is escalating
overseas out of the 200 MT of steel currently produced in India
around 50% of it is exported. In the first sixmonths of the fiscal
year 2009-2010 the Indian steel export almost doubledto 9.3MT
from 4.4MT in the same period the previous fiscal year.
Thecountry’s iron ore exports during April-October 2009 period
grew 20 per centover the year ago period to 53 million tons.4.
4) Acquisition opportunities -
In the aftermath of the financial tsunamivarious mineral assets are
available globally at a price which is just a shadeof their prime

17. valuations. The government of various countries has beenputting up
coal blocks under the hammer. Tata Steel has been very active in
the asset acquisition space and has bagged various coal blocks in
Asia, Africaetc. which is essential for its security of raw materials.5.
5) Opportunities for demand of higher prices
- The demand for steel is on arise both domestically and
internationally as a result of the enhanced focus upon infrastructural
development. Secondly with other steel projects of international
giants POSCO, ARCELOR MITTAL stalled due to land acquisition
problems the prices of steel are slated to soar. In the month of April
2010 the steel prices were increased by Rs.2500/ton and this is just
the brink of the U-Shaped economic recovery and the prices are
slated to rise further in the near future.6.
6) The movement of TataSteel in the value chain front-
India is the only country in the world where steel can be made
cheaper and there is consumption. Then there are other countries
like Ukraine, Iran, Brazil, Australia and Bangladesh where steel can
be made cheap because of the availability of iron ore and coal. Tata
Steel has been to Iran, Ukraine, Bangladesh - all in the last year
and is looking at China for finishing capabilities Ukraine is like India,
where the factors of production are competitive. The sustainable
level of demand in Ukraine is 12 million tons (MT),but one can make
much more steel because of the availability of ore. Secondly,
thelabor is cheap in India and so is the cost of energy
.
Hence, Tata Steel's strategy is based on breaking up this value
chain and putting each part where it's the most cost-effective. So
primary steel will be produced in India, where there are large
deposits of iron ore. But the Asian markets, now a key focus for
Tata Steel, will be better addressed by taking the semi-finished
steel to these countries for finishingand then selling there. For now,
Jamshedpur will provide the semi-finished steel forthe NatSteel
bases. Tomorrow, it could well come from Iran or Ukraine;
thesecountries have abundant iron ore and are therefore ideal
for primary steel making.
7 . I m p r o v e m e n t i n t h e q u a l i t y o f
o p e r a t i o n s , p r o d u c t s , i n v e n t o r y management –
7.1 Strategic Sourcing Approach
Tata Steel’s approach is based on the principle that strategic
procurement is an exercise beyond cost reduction. Commodities
used for steel-making processes and their allied services are being
selected and prioritized for study using strategicsourcingtools,before
theirannual procurement, depending upon their annual purchase
value and criticality of application. After the selection of
the commodities, a Commodity Competence Team(CCT) is formed
which is a cross-functional team wherein people from different
departments such as User/Operation, Research and

18. Development,Quality Control, MRO, Supply Management and
Finance come together toformulate sourcing strategies for
a commodity purely on a techno-commercial basis. After
the formation of the CCT, the commodity studies arecarried out
based on different technical and commercial parameters as
7.2 Strategic Sourcing Levers
Strategic sourcing requires the application and interpretation
of sophisticated strategic sourcing tools and techniques. Tata Steel
follows a variety of sourcing strategies, as shown in Figure 5, with
multifarious objectives which are mentioned below:
• Decrease specific consumption and specific cost of commodities on
life-cycle costing basis.
• Source consistent quality products.
• Ensure continuous supply of materials.
• To increase the productivity of blast furnaces or steel-Melting
shops bydecreasing the down time through the use of improved
quality, cost-effectivematerials, wherever applicable.
7.3 Total Refractory Management Concept
To ensure the quality of refractory, proper service and the life of
cast houserunners which are directly related to the hot metal
production and also todecrease the total cost of ownership on a life-
cycle costing basis, a strategicdecision was taken to go for ‘total
refractory management’. In the totalrefractory management of cast
house troughs for high-capacity blastfurnaces, the supplier is
responsible for the supply of the entire refractorymaterial for all
the locations of cast house troughs, initial installation,
regularsupervision, maintenance of troughs through casting till
guaranteedthroughput hot metal is achieved and the supply of all
kinds of equipmentsrequired for installation and maintenance of
cast houses.
7.3.1 Vendor Selection through comparative assessment
A comparative analysis of the suppliers was carried out based
on parameters,which includes total throughput commitment of
hot metal, throughput of hotmetal committed in between two
repairs, total down time of trough runners,a reference list of
a supplier’s customers, quality of refractory to be used andlife-cycle
cost of refractory in terms of Rs/ ton of hot metal (Rs/thm).
7.3.2 Reduction of Life-cycle cost

19. A reduction of the total life-cycle cost. Of refractory, in terms of
Rs/thm, hasbeen done by proper selection of material, optimization
of its amount toachieve the guaranteed throughput and finally by
knowledge-basednegotiation.
7.3.3 Benefit to TataSteel
• Reduced down time of the trough runners leading to higher rate
of production.• Reduced specific consumption of refractory in terms
of kg/thm.• Reduced overall cost of ownership due to higher
campaign life of refractories and also due to higher rate
of production, as the productivity of the blast furnace largely
depends on the quality of refractories used at thecast house.
8. Time for diversification-
Withthe demand for various products of steels oaring presents us with
the right time for upstream diversification.
Threats faced by Tata Steel-
1. Resources to cushion the from business environmental change-
Tata Steel is a company floated by Tata Sons whose assets are
valued at
around 108 billion USD and thus the company has enough reserves
to cushionitself from market fluctuations.
2. International competition-
Companies like the Indian Steel magnate Lakshmi Mittal’s Arcelor
Mittal, Posco has landed in the shores of India andhave proposed to
set up 8 MT and 12 MT respectively. These are amongstthe largest

20. steel producers in the world and have a high chance of eatinginto
the market share of Tata Steel. Indian market is also plagued
withcheaper Chinese made steel which is ubiquitously available and
issignificantly munching through the pie of all Indian steel makers
including Tata Steel.
3.Financial Crises -
Tata Steel is having a huge debt of 10.2 billion USD inits books and
hence a huge interest burden. With the volatility of thefinancial
markets and the tightening of the liquidity by the central banksthis
rate is slated to go up and hence would further increase the
interestburden of the company.
4. Adoptability of the company to technological changes –
Tata Steelhas shown immense integration abilities in the past. With
the acquisitionof it has been able to imbibe the high
end technological knowledge to itsproduction facilities and hence
has been able to produce high quality steelat least prices and
significantly bettered its operating margins.
5.Regulatory norms-
The government of India has chalked a strict norm for the
clearance of a plant through environmental impact
assessment(EIA). To get clearance from the concerned authority
demands more than eight months thus leads to delay and project
cost escalation. Albeit the governments’ steel policy has been pro
industry in order to increase the steel capacity at a brisk pace.
6. Adverse effects of land acquisition picketing-
India is plagued withviolent agitation against land acquisition. The
land acquisition process of the company’s plant in Orissa has been
stalled primarily due to the uprising of the land losers in
the concerned area. Albeit the company isproviding with attractive
compensation packages, the uprising is primarilydue to the cheap
politics of the local leaders to come into the limelight. This will
severely dent the company’s expansion plans of the future.
7.Decrementin thesales volumes-
Some of the Tata Steel products(like aerospace steel) have
witnessed a severe reduction in sales and as a result of which the
production facilities of the company in the UK and TheNetherlands is
facing the brunt of shut down.
8.Brandequity oftheproducts-
Tata Steel brand is a very powerful one,can only take a product
very far. Beyond that it will be necessary for the
product to strike ahead with its own brand. He says, "A villager
who goesto buy steel in the marketplace does not know what Tata
Steel is bringingto this steel. All he knows is that it is a
Tata product." That villager needs to be told about the superiority of
Tata Steel’s product over others. This isthe work of the brand.
Branding has begun to yield rich dividends. Lastyear Tata Steel
sold about 345,000 tons of branded steel, which represented about

21. 12 per cent of its total steel sales, as against 265,000tons,
representing 9 per cent of total steel sales, the previous year.
Thisyear the company plans to more than double its volume of
branded steel.Although the resultant increase in turnover of
branded products will beenormous, there are miles to go before
Tata Steel can rest on its laurels.