strategic brand analysis of tata steel

7/31/2019 Strategic Brand Analysis of TATA STEEL

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contents

Introduction of cipla

Executive summary

Brand over the year (cipla)

Market analysis of cipla

Competitive analysis of cipla

Brand equity of cipla

Brand identity of cipla

Leveraging of brand

Outlook & valuation of cipla


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Executive Summary

Tata steel was incorporated as The Tata iron & steel company ltd in 907 as

a public limited company, the company was established by jamsetji N. Tata,the founder of the Tata companies and is one flagship companies.

Tata steel manufactures a diversified portfolio of steel products range thatincludes flat products, as well as some non-steel products such as Ferroalloys and minerals, tubes and bearing.

Tata steel ltd. is one of the worlds largest steel companies with a steelproduction capacity of approximately 27.2 mtpa. According to wasa, thecompany was the seventh largest company in the world in terms of crudesteel production volume in 2009.

Tata steel has grown significantly in recent years with its steel productioncapacity increasing from approximately 5.0 mtpa in fy06 to 27.2 mtpa

currently. This growth was primarily due to the company's acquisition in april2007 of corus group plc (corus), which at the time was estimated by wsa tobe the ninth largest steel producer in the world.

Tata steel has to access to raw material for steel production and a skilledworkforce with arelatively low cost of labour at its operation sin india.


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Contd Tata purchased Thailands millennium steel and Singapores Nat steel Asia,

and in 2007 completed its acquisition of anglo-dutch Corus group in a $12

billion transaction.

Tata Steels vision is to be the worlds steel industry benchmark through

the excellence of its people, its innovative approach and overall conduct.

Underpinning this vision is a performance culture committed to aspiration

targets, safety and social responsibility, continuous improvement,

openness and transparency.

Tata Steels larger production facilities include those in India, the UK, the

Netherlands, Thailand, Singapore, China and Australia. Operating

companies within the Group include Tata Steel Limited (India), Tata Steel

Europe Limited (formerly Corus), NatSteel, and Tata Steel Thailand

(formerly Millennium Steel)

Hemant M. Nerurkar has been Executive Director of India and South East

Asia of Tata Steel Limited since April 9, 2009 and Managing Director since

October 01, 2009.


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Introduction of the Brand 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 companys virtuosos of finance have been able to find innovative

ways to tackle the companys bludgeoning debt and keep the bottom line

in the green zone despite lowering demand and huge debts accumulated.


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Porter Five Forces Model

Threats of new entrants: the willingness and ability of firms to enter a

particular industry depends on the barriers to entry. Such barriers include; capital requirements,

economies of

scale, government policy & product differentiation.

Intensity of rivalry among existing competitors

The bargaining power of suppliers

The threat of substitute products

The bargaining power of buyers


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Brand Equity Initiatives

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.

. In the past one year, the Companys financing strategy was focused on

raising capital from portfolio divestments and external financing methods

to rebalance the capital structure and finance the growth projects. All

these financing initiatives coupled with substantially better internal

generations enabled improvement of the financial metrics of Tata Steel

Group significantly.

Assurance, reliability and superior brand experience in every segment

have always been the key focus for Tata Steel's brand building endeavours.

In addition, the realigned operating strategy takes into account current

realities of the marketplace and enhancement of customer satisfaction

and relationships with existing clients.


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Contd In recent times, the Tata Steel Group has been concentrating on the

geographies that are logistically favorable to its plants in Europe and Asia, in

response to current realities of the marketplace. Tata Steel has been working to enhance customer satisfaction and

relationships with existing clients

As opposed to competitors who split and diversify, Tata Steel is focusing on

positive markets by applying its resources to the core business where theyare most needed. In order to spread the customer base and maximise

leverage from the economic packages, special initiatives were devoted to

Government funded projects and the Railways.

Tata Steel had implemented Vehicle Tracking system (VTS) way back in

2002. In line with the Companys endeavour to improve customerservice, approx 1600 Global Positioning System (GPS) mounted

vehicles have been deployed by transport partners of material

movement across the Country. This is the largest implementation of

GPS enabled fleet in the steel industry.


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Contd To bring about improvement in delivery reliability, a billboard has been

created and uploaded on CSD webpage to track vehicles on-line, again a

first in the Indian Steel industry. Major drive has been taken to reduce service claims through development

of desired infrastructure at Hubs/Stock yards and deployment of

specialised vehicles.

In order to create service differentiation, an auto compliant hub has been

developed at Chennai. Fleet of special vehicles has further been

augmented to deliver damage free skin panels

Standard operating procedures for receipt, storage, handling and delivery

of steel materials at all stock points have been implemented.

Tata Steel has created transport parks in Jamshedpur to ease out traffic

flow and educate all drivers on safety and health concerns. As a CSR

initiative approximately 2000 drivers undergo medical check-up at our

facilities every month.


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Leveraging of the Brand

The Tata Finance controversy notwithstanding, Tata Sons is making a

concerted attempt to shift focus from a commodity-oriented conglomerateto a brand-oriented corporate group. Catalyst talks to one who's driving

this change.

It is an image that has stuck to the Tata Sons conglomerate all these years.

But now the image is in for a makeover. Put differently, the winds of

change are blowing within the organization's formidable corridors. . "The corporate portfolio is changing from 40-50 per cent commodity

orientation to an equal percentage of brand orientation," says R.

Gopalakrishnan, Executive Director, Tata Sons Ltd.

. "The perception of Tata Chemicals, for example, is hardly that of a

marketing company. But Tata Salt, marketed by Tata Chemicals, ranksupfront as a leading FMCG brand in most consumer surveys, besides, of

course, being the market leader among branded salts," observes

Gopalakrishnan


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Contd The Tata group's new corporate ad campaign is an obvious step in this

direction. So is the recent effort to associate with young icons - motor

sports prodigy Narain Karthikeyan is one such example.

Then there has been the fairly contemporary ad campaign for Idea, the

group's cellular services venture, created by Lowe India and themed

around `liberation through an idea'.

In case of packaged tea, Tata Tea intends to build on a long-term

association with the arts and cinema. One such example was Tata Tea

recently sponsoring the Cinefan festival of Asian cinema held in the

capital.

Take Tata Chemicals, which recently repositioned Tata salt asDesh ka

namak. The company sees this as a paradigm shift from the rational

advertising approach to an emotional platform. The objective, according

to Kapil Mehan, Vice-President (Sales and Marketing), Tata Chemicals, is to

be a category clutter breaker.


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Contd And recent marketing initiatives to push Tata Salt are being led by a team

of clearing and forwarding (CFA) agents and distributors with the objective

of servicing the market better and expanding product penetration.


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Brand Valuation

The Tata groups intense activities in 2007 have seen it rising 45 places toNo. 57 in Brand Finance Top 500 Global Brands.

A widely respected ranking of brands by brand value published by the UK-

based Brand Finance Plc.

No other Indian brand figures in the top 100.

The study, which valued the Tata brand at $11.8 billion (Rs47,082 crore), is

value at the end of 2007

Brand stand: Tata groups Ratan Tata. The Nano, and the Jaguar and Land

Rover acquisition, could help Tata break into the top 50 in 2008.

In 2007, one Tata company, Tata Steel Ltd, acquired UK steel maker Corus

Group Plc. for $11.3 billion in January

By the end of the year, it was clear that Tata Motors Ltd, another group

company, was the front-runner to acquire the Jaguar and Land Rover brands

from Ford Motor Co.


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CONTD

The end of the year also saw interest building up around Tata Motors

small car Nano, which was unveiled on 10 January. Unni Krishnan, managing director, Brand Finance India, said the Jaguar and

Land Rover acquisition and the Tata Nano launch could help Tata break

into the Top 50 in 2008. The Corus acquisition helped boost Tatas brand value because it brought

to the group more products and capacity, a wider geographical reach, and

the heritage value of British Steel.

Corus was formed in 1999 through the merger of British Steel and Dutch

firm Koninklijke Hoogovens.

According to the Brand Finance study, the Tata brand is rated AA+

(indicating robust strength) in terms of brand strength, a measure that

reflects its current value and future prospects


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CONTD

About 80% of Tatas brand value actually stems from the three engines ofsteel, motors and consulting, and the thrust of the action is in these areas,signaling a positive future for the brand.

. The company has been restructuring, and been active in global mergersand acquisitions,

. With Corus, and a string of truly blue-chip brand acquisitions, the centreof gravity of the Tata group has shifted out of Indiaabout 60% of itsrevenues would be out of India now.

Brand Finances brand valuation methodology is based on fair marketvalue, which the firm that calls itself an independent brand valuationconsultancy, defines as the estimated amount .

Brand Finances Krishnan said there are four factors driving the value ofthe Tata brand: mergers that contribute to revenues; media coverage; achange in perception that it is no longer largely a steel and auto firm but amulti-dimensional conglomerate


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Future course of action Chairman of the Tata Group, Ratan Tata, got listed among the top 10

steelmakers of the world by steeling the show at the Corus takeover.

Tata will have a major role in creating the presence of Indian companies inEurope.

Over the last few years Tata has had a strategy of acquisitions in various

countries even where raw material might not be available.

Europe is requires high-quality service and Corus will help us in fulfilling

those needs. Corus will also help Tata Steel in improving our technology,

Muthuraman explained.

The Managing Director said that Corus management and work practices

are similar to Tata Steel and they are planning to form an executive

committee for the two companies.

economic downturn after a range of strategic actions were taken,

including a radical restructuring of the Speciality Steels business, which is

now in profit


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CONTD

However, the Long Products business as a whole has continued to make

losses over the last two years.

. The decline in some major markets, particularly the construction sector,

has been a key factor.

Demand for structural steel in the UK is only two-thirds of the 2007 leveland is not expected to fully recover within the next five years.

Synergies between the two companies will be on the following terms:

Improvement of operations

Procurement of material

Shared services


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CONTD

Tata Steel is showing its commitment to making this strategy work byearmarking 400 million of investment for this business over the next five

years. At the same time we are aware that our employees and their families will

experience a very unsettling few months as a result of this announcement.We will do everything we can to provide them with support andassistance.

Besides, there remains a great deal of uncertainty about the level offurther unilateral carbon cost rises that the UK Government is planning.

Some of our key markets are not forecast to fully recover from the globaleconomic downturn for a number of years. Other market sectors havechanged and our customers are demanding new and different productsfrom us, as well as improved levels of service.


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CONTD

This investment will improve Long Products manufacturing capabilities,

particularly in the area of plant reliability. The investment follows a number of recent announcements in the

business, including upgrading the rail rolling mill at Hayange in France, aswell as improvements to the plate and wire rod rolling facilities in Scotlandand England.

The jobs at risk are in operational, functional and management positions.A 90-day consultation process will begin soon with affected employeesand union representatives.

The company will make every effort to achieve the job losses

through voluntary redundancies. However, it is important thatcritical skills are retained enabling the business to increase output

should the markets recover.


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CONTD

A comprehensive range of redundancy packages and outplacement

support services will be made available to those leaving the

company. There will be full consultations with employees and their

representatives throughout the process.


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THANK YOU

strategic brand analysis of tata steel

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