2.0.2: Application of Position Analysis to TATA Steel (2): S.W.O.

T Analysis
S.W.O.T analysis is done for an organization, to uncover its overall Strengths,
Weaknesses, Threats and Opportunities leading to measuring their competitive edg
e. The SWOT Analysis enables an organization to adopt strategies accordingly and
recognize its market standing.
Using this analysis, I will analyze their weakness and threats that Tata Steel i
s currently facing. First, I will examine internally what weaknesses that Tata S
teel is facing then after that I will examine externally what are their Threats.
Regarding their Strength and Opportunities please look at table appendix 1.0.2,
page analysis on Tata Steel Competitor.
Weakness:
1. Steel production in India is also hampered by power shortages.
2 Insufficient freight capacity and transport infrastructure impediments to hamp
er the growth of Indian steel industry.
3. Raw materials for steel production are rapidly depleting and are nonrenewable
; organization has to come up with sustainable methods in steel production.
4.
India is deficient in raw materials required by the steel industry. Iron
ore deposits are finite and there are problems in mining sufficient amounts of
it.
5.

Low Labour Productivity:

In India, the advantages of cheap labour get offset by low labour productivity;
e.g., at comparable capacities labour productivity of SAIL and TISCO are 75 t/ma
nyear and 100 t/manyear, for POSCO, Korea and NIPPON, Japan the values are 1345
t/man year and 980 t/manyear.
6. High Cost of Basic Inputs and Services:
High administered price of essential inputs like electricity puts Indian steel i
ndustry at a disadvantage; about 45% of the input costs can be attributed to the
administered costs of coal, fuel and electricity, e.g. cost of electricity is 3
cents in the USA as compared to 10 cents in India; and freight cost from Jamshe
dpur to Mumbai is $50/tonne compared to only $34 from Rotterdam to Mumbai.
7.

Endemic Deficiencies:

These are inherent in the quality and availability of some of the essential raw
materials available in India, e.g. high ash content of indigenous coking coal ad
versely affecting the productive efficiency of iron making and is generally impo
rted. Advantages of high Fe content of indigenous ore are often neutralized by h
igh basicity index. Besides, certain key ingredients of steel making, e.g. nicke
l, Ferro-molybdenum is also unavailable indigenously.
Threat:
1.
Threat of Substitutes: Plastics and Composites.
2. High raw material input cost and scarcity of nonrenewable raw materials are a
threat to the industry. (e.g. Coal, limestone etc.).
3.
In the developed world, industries have been facing rising environmental
costs due to the increased concerns on Global Warming. It is, therefore, a chal
lenge and responsibility for the Steel industry to be the trustee in conservatio
n of nature for future generations.

4.
It is recognized that the steel and aluminum industries are significant
contributors to man-made greenhouse gas emissions as the manufacture of steel pr
oduces carbon dioxide (CO2), and the manufacture of primary aluminum generates b
oth CO2 and per fluorocarbons (PFCs).