Innovativeness of Tata Steel respect to its competitors it’s a clear, it has the lowest operating cost for steel manufacture in the world, it has displayed effective means in adopting an eco-friendly and sustainable approach towards the manufacture of steel thus proactive measures are undertaken to ensure the employee's health and productivity through ergonomically designed work stations and by protecting them from occupational hazards.
Ethical and Cultural, 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; it also 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.
WEAKNESSES
The most important weakness for 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.
Another one is having products in its portfolio with a very low demand in the recent past, such as aerospace steel. It also brings unrecoverable costs of production.
Internationally, the brand had suffer degradation because of shutting down plants in UK and Netherlands, it really affects its image of social and working security because many people lost their daily livelihood.
High attrition rate, because many of the engineers constantly change their jobs. It makes very difficult to form a strong work group across all of the departments. Team is ever changing.
OPPORTUNITIES
Actually, Tata Steel is a market leader in its national market (India), and also internationally is the sixth largest producer.
Acquisitions and Mergers, after the financial global troubles, might become easier. Various mineral assets are available globally at a price which is just a shade of their prime valuations. The government of various countries has been putting 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, Africa, etc., which is essential for its security of raw materials.
New technologies can be implemented such as the Corex process, the HI smelt process and the Direct Iron Ore Smelting (DIOS).
Because of the Tata Steel present, is its time for diversification, due to the highly demands for many products of steel.
India is the only country in the world where steel can be made cheaper and there is consumption.
The demand for steel is on arise both domestically and internationally as a result of the enhanced focus upon infrastructural development. This will permit increasing prices.
THREATS
Competitors: Companies like the Indian Steel magnate Lakshmi Mittal’s Arcelor Mittal, Posco has landed in the shores of India and have proposed to set up 8 MT and 12 MT respectively. These are amongst the largest steel producers in the world and have a high chance of eating into the market share of Tata Steel.
Tata Steel is having a huge debt of 10.2 billion USD in its books and hence a huge interest burden. With the volatility of the financial markets and the tightening of the liquidity by the central banks this rate is slated to go up and hence would further increase the interest burden of the company
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.
Low Barriers of Entry, there is easy for a competitor to become bigger due to the fact Indian Industry is a cheaper one at the Steel Industry.
