Intensity of competition(Moderate to

High)
competition from foreign players
Spurt in Merger And Acquisitions activities
Excess demand met by import
High cost of exit
Commoditized

Suppliers power(Low)
High raw material
availability
Lack of transportation
Prices set as per
international benchmark

Porters Five
Forces

Threats of New
Entrant(low to
moderate)
High cost of basic inputs
and services
Industry is capital intensive
Regulatory environment

Buyers
power(Moderate)
increasing demand for Steel
Fragmented coke suppliers
Access to global market

Threats of
Substitute(High)
Use of Aluminum, Plastics,
Plastics, carbon fiber

India is expected to
become the world's
second largest
producer of crude
steel in 2015-16,
moving up from the
fourth position

 Recommendations on captive mines(FDI of US$ 1,669.49 millions)

Political National Steel Policy to remove bottlenecks
Factors

Economi GDP Growth rate is appreciable now.(Steel industry 2%)

Reduction in custom duty
cal
Factors
Rural-Urban Divide

Social Higher disposable income

Factors

Technolo Popularity of steel plants(Iran has shown interest in steel and mines sector)
gical Application of SML(Steel Markup Language)
Factors
Environm
ental
Factors

Legal
Factors

High resource availability

Poor transportation infrastructure

Acquire land in India become more competitive

Slow legal procedures

The Indian steel sector enjoys

advantages of domestic availability of
raw materials and cheap labour. Iron
ore is also available in abundant
quantities. This provides major cost
advantage to the domestic steel
industry.
The steel industry reflects the overall
economic growth of an economy in
the long term as demand for steel is
derived from other sectors like
automobiles, consumer durables and
infrastructure.
These indicators suggest that India
will soon move up to the second
position both in production and
consumption of steel, according to a
sectorial analysis by Frost & Sullivan's
Metals & Mining Practice

Products of Steel
Defe
nce
&
Secu
rity

Engine
ering

Energy
&
Power

Shipbuilding

Auto
moti
ve

Packaging

Rail

Lifting
&
Excava
tion

Constr
uction

Aerospace

Consu
mer
Goods

Internal Factor Evaluation

Factors taken into Consideration

Management( Planning,
organizing, motivating, staffing
and controlling)
Marketing

Finance/Accounting

Production/ Operations

Research and Development

Management Information
Systems

Value Chain Analysis( VCA)

Ratings:-1(Poor)-4(Superior)
Weights:- 0(Not important)
1(Very important)
Weighted score:- weights*Ratings
Total :- sum total of weighted
scores

External Factor Analysis

Factors taken into
Consideration
Management( Planning,
organizing, motivating,
staffing and controlling)
Marketing
Finance/Accounting
Production/ Operations
Research and Development
Management Information
Systems
Value Chain Analysis( VCA)
Ratings:-1(Poor)-4(Superior)
Weights:- 0(Not important)
1(Very important)
Weighted score:weights*Ratings
Total :- sum total of weighted
scores

Factors

Score(S Weight Total

)
age(W weighted
)
value(S*W)

Threats
Technology Risks

0.15

0.15

Raw Materials Security

and Price Volatility

0.12

0.24

Forex, Credit, Liquidity

and Counterparty Risk

0.07

0.14

Regulatory and
Compliance Risks

0.06

0.12

Health, Safety and

Environmental Risks

0.11

0.33

Macro environment

0.18

0.72

Industry Cyclicality

0.15

0.45

Growth Projects

0.12

0.36

Financing

0.08

0.24

Opportunities

Total

2.75

 Access to Raw Materials

Strong Brand Value
Access to Corus talent pool
Risk Mitigation
Good Corporate Governance

High debt loads

Operational Inefficiencies
Low demand for existing products
Less product innovations
High attrition rate

Strength

Weakness

Takeaway
Company should
continue their
expansion strategies if
possible through
acquisitions in
domestic as well as
foreign market
Company should focus
more on technology
driven operations to
gain competitive edge

Opportunitie
s
Competitive advantage by value of size
Growth of Infra Sector in India
Higher pricing opportunities in foreign
markets
Movement along Value chain front

Threats

Socio Political Scenario/ Cap on

mining activity
Advancing technology
International Competition
Regulatory requirements
Rising prices of Coal

Company should focus

on alternative sources
of energy as they are
highly dependent on
coal mines