Strategic Management

TATA Steel
Strategy Development
TATA Steel
Content
 Introduction
 Current Performance
 Corporate Governance
 SWOT, TOWS
 List of Strategies
 Best Alternatives
TATA Steel
Introduction
Current Performance
Introduction
 11th Largest Steel Company.

 2nd most geographically deversified.
 Crude Steel capacity of 27 Million Ton.
 Employees : 81,000
 Group Turnover : US$ 26.13bn
 Group profit after tax: US$ 1.01 bn
Introduction
Market Trend
Market Trend
TATA Steel Performance
Current Performance
 Group Revenue : 27,471 crore 4% q/q

 Indian Delieveries : 23 % q/q
 Indian Sales effected by china
 Europe Deliveries effected by economic issues
 EBITDA/t = 7,620 - Seasonal Slowdown, Ramp-up Cost.
 Fund Raised through 10 year NCDs (1,000 crores)
 Accrual Sales
Current Performance
India
 Hot metal production : 10 MT/A
 Production portfolio : downstream facility
 Automobile industry : 15% Y-o-Y growth
 Best sales through Tiscon, Shaktee & Steelium
 Profitability from Ferro Alloys division is interrupted
by mining disruption
Current Performance
India
Current Performance
NATSTEEL
 Investments in Technology & Internal Capacity Building
 Sales grwe to $ 2.0 billion (1.05 MTPA)
 Loosed sales in Vietnam by 0.05 MT
 Malaysia is a key market for NATSTEEL
 Working on Tsing Land for a new plant in Hongkong
Current Performance
TATA Steel Thailand

 Steel inventories reduced by 1000 million Baht.
 Help repaid long-term loan commitments.
 ‘SAVE’ project help reduce energy consumption by 4%
 Achieved lowest cost as compared to last 4 years
 Increased revenue by 10% Y-o-Y.
Current Performance
TATA Steel Europe
Increased imports into the EU depressed global steel selling

prices and the Selling Result.
A planned reduction in Production Volume.
Manufacturing improved due to cost savings following recent
structuring announcements
Construction started of new slab caster in IJmuiden to boost
sales of higher-strength steels, particularly for automotive
customers
Current Performance
TATA Steel Europe

Current Performance
TATA Steel Europe

Current Performance
A New Greenfield Initiative

 Tata Steel minerals Canada
 Shares = 80% tata Steel and 20% Millennium Iron Corp.
 It is working at 60% capacity.
Current Performance
The Mining Challenge

 Mine closure in Noamundi.
 Supply reduced by 5.2 million
Current Performance
Kalinganagar Project
 Mining Project
 Capacity of 11.5 MT/A
 It can contribute to
 Engingeering
 Constrution Project
 Lifitng and Evacuation
 Ship building and defence
 Has groth potential – currently providing 8.5 MT/A to market.
Current Performance
Automobile Oppertunity
 High growing demand for cold rolled steel.

 High Market shares are with Nippon Steel, Summitomo Corp.
 Tata can have joint venture with them.
Current Performance
Automobile Oppertunity
 High growing demand for cold rolled steel.

 High Market shares are with Nippon Steel, Summitomo Corp.
 Tata can have joint venture with them.
Current Performance
Current Performance
TATA Steel
Strategic Direction
Strategic Direction
Vision
 We aspire to be the global steel industry benchmark for
value creation and corporate citizenship
 The vision of Tata steel is;
“We aspire to be the global steel industry benchmark for
value creation and corporate citizenship”.
Strategic Direction
Mission
 Consistent with the vision and values of the founder jamsedij
 Tata steel strives to strength Indians industrial base through
effective. becoming a global benchmark in value creation and
corporate citizenship
Strategic Direction
Strategies:
 Manage Knowledge.
 Outsource Strategically.
 Encourage innovation and allow the freedom to fail.
 Excel at TBEM.
 Unleash people’s potential and create leaders who will build the future.
 Invest in attractive new business.
 Ensure safety and environmental sustainability.
 Diverse, |Merge Acquire.
Strategic Direction
Objectives:
 Move from commodities to brands.
 EVA positive core business.
 Continue to be lowest cost producer of steel.
 Value creating partnerships with customers and suppliers.
 Enthused and happy employees.
 Sustainable growth.
Strategic Direction
Business Ethics:
“We do not claim to be more unselfish, more generous or more
philanthropic than others, but we think, we started on sound and
straightforward business principles considering the interest of the
shareholders, our own health and welfare of our employees... the sure
foundation of our prosperity”
Strategic Direction
Policies:
They have polices in place that cover all areas that leads to successful
business by achieving their strategies and objectives, they have detailed
polices in place for business privacy, customer service relationships,
quality, material subsidiary, corporate social responsibility and
accountability, sustainability, environment, health and safety.
BoD Structure – Strategic Direction
Mr. O. P. Bhatt
(Chairman, Independent Director)
He is a graduate in Science and a post graduate in English Literature
(Gold Medalist)
He was the Chairman, State Bank Group
Served as Chairman of Indian Banks
He was formally appointed as the Chairman of Tata Steel with effect from
November 25, 2016.
Mr. Subodh Bhargava

(Independent, Non-Executive Director)
He is a Mechanical Engineer from the University of Roorkee
Mr. Bhargava was the President of the Confederation of Indian Industries,
The President of the Association of Indian Automobile Manufacturers and
the Vice President of the Tractor Manufacturers Association.
Mr. Cyrus P Mistry

(Non-Executive Director)
He is a graduate of Civil Engineering from Imperial College, UK, and has a
M.Sc. in Management from London Business School
A Director of Tata Sons since 2006
Mr. Koushik Chatterjee

(Group Executive Director, Finance and Corporate)
He is an Honor Graduate in Commerce from Calcutta University and a
Fellow Member of the Institute of Chartered Accountants of India. A
Wholetime Director on the Board, he was appointed as the Group
Executive Director (Finance and Corporate) w.e.f. September 19, 2013.
Mr. Ishaat Hussain

(Non Independent, Non-Executive Director)
He graduated in economics from St Stephens College, New Delhi. He is a
fellow of the Institute of Chartered Accountants in England and Wales
(FCA). Mr. Hussain joined the Board of the Indian Tube Company (a Tata
Steel associate company) in 1979.
Mr.Ishaat hussain
having vast experience in the areas of finance, banking, accounts, audit,

taxation and general management
Mr. T. V. Narendran (Managing Director

– Tata Steel India and South East Asia):
He is an Honours Graduate in Science from the University of Patna. He is
the former Chairman of Life Insurance Corporation of India (LIC).
Managerial Expertise
Senior Management:
Areas of Experties
 Management
 Engineering
 Marketing & sales
 Finance.
 Human Resource management
Managerial Expertise
Senior Management:
Areas of Experties
 Metallurgical Engineering
 Masters in Physics
 Electrical Engineering
 Steel manufacturing
 Chartered Accountant
 Bachelor of Arts
TATA Steel
Environmental Scanning
Intenal Factors
Strengths
 High control over rawmaterial.

 Value Chain Efficiency.
 Diversified product portfolio.
 Strong Backing of TATA Brand name.
 Mineral Reserves.
 Top Management Team.
 Excellent integration with Corus.
 Innovative Products of TATA Steel.
 Adaptability of company in the fast changing environment.
Intenal Analysis
Weaknesses
 Slightly lagging in technological front.

 Increasing ration of debt to equity.
 Depend on domestic and few internaional markets.
 High attrition rate.
 Products in portfolion lacking demand.
 Low cost recovery.
 Weak process oriented Research and Development.
External Analysis
Opertunities
 Newer Technologies
 Growth of Infrastructure Sector in India
 Overseas Market
 Acquisition of coal block
 Competitive position of the company
External Analysis
Threats
 International competition
 Financial Crises
 Regulatory Norms
 Land acquiring issues (India)
 Decrement in the sales volume
Internal Analysis
External Analysis
Strategic Factors Analysis Matrix
TOWS
Intenal Factors
Proposed Strategies
SO
 1=Joint venture for automobile Industry
 2=Invest existing resources to cover infrastructure sector
 3=Collabration with governments in developing nations
WO
 1=R&D focused on coking coal
 2=Tackling overseas market can strengthen global reach
ST
 1=Invest in Green field Initiative
 2=CSR Focused in marketing campaigns
WT
 1=Acquisitions of Tsing Yi Land in Hongkong - Reduction in supply cost
 2=CSR Focused in marketing campaigns
Intenal Factors
Best Alternatives
 Joint venture for automobile Industry

 Invest existing resources to cover infrastructure sector
 Collabration with governments in developing nations
 R&D focused on coking coal
 Tackling overseas market can strengthen global reach
 Acquisitions of Tsing Yi Land in Hongkong - Reduction in supply cost

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TATA Steel

 11th Largest Steel Company.

 Group Revenue : 27,471 crore 4% q/q

TATA Steel Thailand

TATA Steel Europe

Increased imports into the EU depressed global steel selling

TATA Steel Europe

TATA Steel Europe

A New Greenfield Initiative

The Mining Challenge

 High growing demand for cold rolled steel.

 High growing demand for cold rolled steel.

Mr. Subodh Bhargava

Mr. Cyrus P Mistry

Mr. Koushik Chatterjee

Mr. Ishaat Hussain

having vast experience in the areas of finance, banking, accounts, audit,

Mr. T. V. Narendran (Managing Director

 High control over rawmaterial.

 Slightly lagging in technological front.

 Joint venture for automobile Industry

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