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Complete SWOT Analysis of JSW Steel – India’s 2nd Largest Steel Company

by | Case Studies | 0 comments

In our last blog, we did an ultimate SWOT Analysis of India’s leading steel supplier and manufacturer, Tata Steel.  Here we will be doing a complete SWOT Analysis of JSW Steel.

JSW Steel is one of the fastest-growing steel companies in India. It is also one of the largest steel producers in the world. It is also the 2nd largest steel company in India.

JSW Steel has gained such large success in the market with a large presence in the market with some excellent digital marketing. As most of the people are online it is easy for the companies to advertise and target their customers as most of the people are using digital media nowadays. Digital marketing has become the most essential part of every company. If you are interested in learning what digital marketing is and how to use it to your advantage – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.

Thus this makes us keen to know how JSW Steel has a prominent position in the market. To understand that we have given a complete SWOT Analysis of JSW Steel. Before we start with its SWOT Analysis let us learn about JSW Steelas a Company, its products, competitors, financials, and more.

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About JSW Steel

SWOT Analysis of JSW Steel | IIDE

JSW Steel Ltd is an Indian multinational company, with a presence in over 140 countries. It is a part of the 13 billion dollar JSW group. It was founded in the year 1982 by Sajjan Jindal. It is one of the top metal manufacturing companies in India. JSW is also the first company to manufacture high-tech and advanced light-end metal products for its all segments.

It offers a huge range of steel products like Hot Rolled, Wire Rods & Special Steel Bars, Cold Rolled, Galvalume, Pre-painted Galvalume, Galvanize, Pre-painted Galvanised, TMT Rebars, Rounds & pipes.  The JSW group is also in the business segment of steel, power, etc.

JSW Steel Ltd believes in creating sustainable growth while balancing the utilization of natural resources and social development in its business decisions. It also believes in doing its business in a very ethical way,  being transparent, and accountable to its stakeholders across the world.

 

Quick Stats About JSW Steel
Founder Sajjan Jindal
Year Founded 1982
Origin India
No. of Employees 55,000 (2020)
Company Type Public
Market Cap ₹162,280 Crores (2020)
Annual Revenue ₹73,872 Crores (2020)
Net Loss ₹4,009 Crores (2020)

 

Products of JSW Steel

JSW Steel is one of the largest companies in its market. Thus it caters to a large audience and it provides them with different products to retain them. Some of the products that JSW Steel provides are as follows:

  • Steel
  • Energy
  • Infrastructure
  • Cement
  • Ventures
  • Paints
  • Realty

 

Close Competitors of JSW Steel

JSW Steel is one of the big names in the industry thus it has to face large competition to sustain its position in the market. Some of the competitors that JSW Steel has to face are:

  • Tata Steel
  • Hindalco
  • SAIL
  • NMDC
  • Jindal Steel
  • APL Apollo

 

Now that we know about the company let us start with the SWOT Analysis of JSW Steel.

 

SWOT Analysis of JSW Steel

SWOT Analysis gives an overview of the company and helps in analyzing different factors that affect the company. SWOT Analysis of JSW Steel will tell us what are the various factors which are responsible for the success of this firm and factors which can be game-changing in the coming days.

Infographics - SWOT Analysis of JSW Steel | IIDE

SWOT Analysis of JSW Steel describes its internal factors which are Strengths and Weaknesses and external factors which are Opportunities and threats.

Let us now start with the SWOT Analysis of JSW Steel by first looking at the Strengths of JSW Steel.

 

Strengths of JSW Steel

Strengths are the factors that help JSW Steel to maintain its position in the market. Below are the strengths of JSW Steel:

  • Backward and Forward Integration – JSW Steel Operates in both the upstream sector and downstream sector. This gives it an additional advantage to avert potential interruptions in raw material sourcing and end-products distribution. This strategy is very beneficial in driving margin expansion if the integrated resources are managed efficiently. It also has a strong distribution channel with its chain of retail outlets For eg: JSW Shoppe and JSW Explore, its stockyards, service centers, and others.
  • Diversified and Value Added Product Portfolio – JSW Steel is a globally recognized high-end, value-added steel manufacturer. It has a large variety of flat and long products to meet different needs throughout the world. The steel products manufactured by JSW steel are used by many companies in different sectors like automobile, electrical transmission, oil and petrochemical, heavy engineering, construction, etc.
  • Strong financial position – JSW Steel has High growth prospects with a consistently increasing revenue and strong financial position in the market. With continuously increasing profits JSW has made a name for itself in front of its stakeholders. Also, the debt of the company has reduced to an extent, plus it also has a large amount of cash to set off that debt.
  • Economics of scale – Demand for steel has a huge correlation with economic development. JSW Steel is the second-largest steel manufacturing company in India and hence it enjoys economies of scale.JSW steel contributes to approx 23% of the total steel produced in India. Being one of the biggest private steel company JSW enjoys large economies of scale.

 

Weaknesses of JSW Steel

Following are the weaknesses of the JSW steel that they need to work on in order to maintain their position in the industry:

  • Limited portfolio diversification – The portfolio of JSW Steel is not as diversified as compared to other industry leaders like Tata steel, reliance s& a, BHEL, etc.
  • Nonavailability of raw materials – Having fewer mines under its control affects the availability of primal materials. Hence at times, there is the unavailability of the raw material which is required.
  • Capital utilization – Capital is not utilized to a certain percent. If the capital is invested in a proper way, completely then the company can get to see better results. Sometimes funds are not used in a proper manner or spent on some other things which lead to a lack of funds at the time when there is an urgent need of capital for this reason the capital should be used in a careful manner and used up to its highest dignity. A certain percentage of the money from the total can be invested in other things so that there is an interest, later on.

 

Opportunities for JSW Steel

These are the factor that creates an opening for JSW Steel to expand their business in different fields. It should be aware of such opportunities and work on capturing them and making them their strengths. Following are some of the opportunities for JSW Steel:

  • Expected Rise in Domestic Steel consumption – With a stable central government and a strong approach to programs like the “Make in India” movement, the domestic demand for steel is expected to rise at a fast pace across all sectors. JSW steel is favorably poised to take benefits in India’s next growth cycle with a wide variety of outputs, advanced technology, and flexibility.
  • Growing Global Automotive Manufacturing Industry – The automotive industry which had gone into a downfall has been up again. JSW tries to cater to various products for these industries in terms of both quality and quantity. This will also lead to an increase in revenues shortly.
  • Strategic Acquisitions – JSW has acquired companies like Ispat and Welspun. Such acquisitions will help the company to achieve further economies of scale and enhance its product portfolio. The acquisition of companies like bpsl has made JSW steel the second largest steel manufacturing company in India.

 

Threats for JSW Steel

Threats are the factors that affect the companies growth in the future. These are unexpected events that can happen in the future. JSW Steel needs to predict these types of threats or similar events that can take place in the future and be ready with proper solutions. Following are some of the potential threats for JSW Steel:

  • Competition – Competition from existing and foreign players is a huge threat to JSW steel. Some of the competitors are TATA Steel, Hindalco, sail, etc.TATA steel is its biggest competitor who is the market leader. due to this ongoing competition, there are price cuts which lead to a decrease in profit margin.
  • Government and environmental regulations – The government has slightly different and more strict laws for the steel industry because it is our natural core and to maintain their control over the consumption of natural resources. While on the other hand organizations concerned about the environment also have their eyes on the steel industry due to its threat to natural resources and the environment.
  • Changes in the prices of raw materials & end products – For steelmaking, it requires iron ore, metallurgical coal, limestone, etc. All these resources are scarce and procuring them is a difficult task. Sometimes it’s very difficult to mine in certain areas hence the prices of these materials keep on increasing and even the end products prices tend to change, this is a backdrop for JSW steel.

 

With this, we have come to an end of the SWOT Analysis of JSW Steel. This study helps the company to know what are the different aspects of the business that it needs to look out for and what it needs to improve on.

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Conclusion

On the study of the SWOT Analysis of JSW Steel, we know that it is one of the fastest-growing steel companies in India. It has a diverse portfolio and a strong financial position in the market. It can grab the opportunities like the rise in domestic consumption of steel and the growing global automotive manufacturing. Even with such advantages in the market it still faces some flaws.

There is a lack of availability of raw materials, an increase in competition, a change in government and environmental regulations. It can reduce some of its flaws by improving its marketing strategy with the use of advanced digital marketing techniques. As most people are online nowadays it is easy to advertise your brand to a relevant audience and increase your brand name. Thus digital marketing is essential for every business. If you are interested in learning and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

If you would like to read such detailed analyses of companies, find more such insightful case studies on our IIDE Knowledge portal.

Thank you for taking the time to read this, and do share your thoughts on this case study in the comments section below.

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Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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