SWOT Analysis of Tata SteelBy 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 Steelo 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 Steelo 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 Steelo 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 Steelo 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.

Read more : http://www.ehow.com/facts_7621882_swot-analysis-tata-steel.html

Read more : http://www.ehow.com/facts_7621882_swot-analysis-tata-steel.html

Read more : http://www.ehow.com/facts_7621882_swot-analysis-tata-steel.html

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:

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

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

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.

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?

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

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

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

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

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

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 acquisition of Corus another powerful 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 through long term contracts. Thus it can be shielded from 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.

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.

Opportunity1) 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) Newer technologies –i)The Corex processcombines 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 processIron 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 nozzlesiii) 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 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 Tata Steel 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 strategic sourcing tools, before their annual 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 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 LeversStrategic 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 assessmentA 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

 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 Tata Steel• 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-With the 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 ataround 108 billion USD and thus the company has enough reserves to cushion itself 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 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. Decrement in the sales 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. Brand equity of the products- Tata Steel brand is a very powerful one,can only take a product very far. Beyond that it will be necessary for theproduct 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 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.