SWOT Analysis of Tata Steel

Tata Steel is part of the most reputed business group in India, Tata group. It is the largest private-sector steel company in India. The company has a presence in over 50 countries with manufacturing operations in over 26 countries. Tata Steel has faced a downfall in demand after the European crisis and has experienced decreasing revenues in the recent years.

Strengths in the SWOT Analysis of Tata Steel :

Market Position: Tata Steel is one of the largest steel manufacturers in the world and world’s second most geographically diversified steel producer. It has the strong presence in Asia-pacific and Europe.

Diversified Product Portfolio: Tata Steel has a wide range of products ranging from flat steel products, agricultural implements, construction products and much more. A diversified product portfolio ensures revenue flow from different markets around the world.

Trust of TATA: Tata is one of the most trusted and respected brands not only in India but all over the world. The association of the name provides immense brand equity to the company.

Integrated operations in India: The whole process of extraction from mines and ores to producing finished steel material is integrated in India. The integrated operations save a lot of time and cost and also maintain the required quality.

Global footprint: Tata Steel has the presence in over 50 countries with operations in over 26 countries which increase its market penetration and share.

Weaknesses in the SWOT Analysis of Tata Steel :

Mistry fiasco has hurt the image: The fallout between Ratan Tata and Cyrus Mistry has had an adverse impact on the image of the Tata group which also translates to Tata Steel.

Over dependence on Europe: Over 50 percent of Tata Steel’s business comes from Europe and thus any economic slowdown in the Europe affects Tata Steel’s revenues.

Disintegrated operations in Europe: Although Tata Steel’s operations in India are integrated; its operations in Europe are disintegrated and hence are dependent on various other suppliers. This affects control on quality an increased costs.

Opportunity in the SWOT Analysis of Tata Steel :

Increasing demand for steel in India: The steel market in India is expected to grow in the next 4 years due to the growth in the construction industry and manufacturing facilities in India. This will certainly benefit Tata Steel.

Adapt newer technologies: Tata Steel lags behind its competitors in the technology front and has an opportunity to adopt newer technologies such as the Cortex process, Hismelt process etc.

Growing manufacturing, construction and automotive industry around the world: Growth in manufacturing, construction and automotive industry in the future will drive the growth in the steel industry and Tata Steel is set to benefit from it.

Threat in the SWOT Analysis of Tata Steel :

Intense competition: Tata Steel faces stiff competition from industry giants such as JSW Steel, Essar Steel, and ArcelorMittal etc. This reduces its market share around the world.

Government and Environmental regulations: Tata Steel is subjected to stringent governmental and environmental regulations in mining as well as production. This increases compliance costs for the company.

Decreasing global steel prices: Excess steel production in China meant that it supplied steel cheaper to the world which forced the process to lower down throughout the world.