When you visited us last time, we are sure you must have checked out our previous blog about the SWOT Analysis of Tata Steel, one of the most trusted brands in India. Today, we will be taking a brief look at the SWOT Analysis of Prakash Industries – One of India’s well-recognized steel manufacturers.
The main objective is to show you the evolution of Prakash Industries, a company that envisioned making India a self-reliant producer of steel to now being one of the country’s biggest representatives in the field of steel production.
One of the main aspects of Prakash Industries’ huge success was how the company was technologically forward and innovative since its establishment. The future is all about innovation and digital marketing is one such aspect that is taking the business world by storm, each business must know how to market itself on the internet, as it is the next normal. To learn more about digital marketing and add a new feather to your skill hat, we suggest you attend a Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
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Before starting with the SWOT analysis of Prakash Industries, let us understand more about the company.
About Prakash Industries,
Prakash Industries Ltd. was established in 1980 with a clear focus on the main competencies of mining, steel, and power generation. It is rapidly creating a name for itself in the Indian steel sector and has become one of the country’s leading makers of value-added steel products. Forward and backward integration has always been emphasised by the organisation for maximum value addition. The company has remained closely aligned with economic trends and market needs in the country, resulting in excellence in a varied variety of goods, quick expansion, solid financial foundations, and a promising future.
At the integrated steel mill in Champa, Chhattisgarh, Prakash Industries Ltd (PIL) is one of the most trusted organisations, defining and offering higher levels of customer satisfaction and faster adoption of the latest available technologies. In terms of the highest quality goods, use of environmentally friendly technology, customer, vendor, and contractor satisfaction, and social obligations, the Champa Plant has set several benchmarks. Furthermore, their R&D section participates actively in strict quality control processes to guarantee a consistent supply of high-quality products.
The company takes a fully integrated strategy with products of unrivalled quality. Moreover, the company has always placed a strong emphasis on backward integration to assure a steady supply of high-quality raw materials. Additionally, it has set up facilities to manufacture Wire Rods, HB Wires, and TMT bars, demonstrating the company’s forward integration strategy to provide the most value. Prakash Industries also owns Iron Ore mines to provide the Iron Ore demand for Sponge Iron production.
The firm now runs a captive power generation facility, allowing it to be entirely self-sufficient in terms of electricity for its integrated steel factory and future development plans. PIL has been able to focus on its goal of increasing power generation as well as development ambitions in the steel sector thanks to the installation of boilers based on the use of low-grade fuel and cutting-edge turbines.
|Founder||B. D. Agarwal|
|No. of Employees||4,440+|
|Market Cap||₹ 972.41 Crore (2022)|
|Annual Revenue||₹ 2949.62 Crore (2021)|
|Net Income/ Profit||₹ 388.34 Crore (2021)|
Products By Prakash Industries
Prakash Industries had been in business for over four decades and primarily deals in:
- Sponge Iron
- Ferro Alloys
- Wire Rod and HB Wires
- TMT Bars
- Wind Power
Competitors of Prakash Industries
Prakash Industries compete on a global level with several other manufacturers, of which its top competitors include:
- JSW Steel
- Tata Steel
- Jindal Steel
- Beta Steel
- APL Apollo Tubes
Now that we understand the company’s core business, let’s delve into the SWOT Analysis of Prakash Industries.
SWOT Analysis of Prakash Industries
The SWOT analysis of Prakash Industries evaluates the strengths, weaknesses, opportunities, and threats that a firm faces. Prakash Industries may evaluate its business and performance against rivals and the industry as a whole using this tried-and-true management model.
It’s a great tool for figuring out where the firm shines, where it falters, devising countermeasures, and figuring out how to expand.
To better understand the SWOT analysis of Prakash Industries, refer to the infographic below:
So let us start by expanding on the strengths of Prakash Industries from the SWOT analysis of Prakash Industries.
Strengths of Prakash Industries
The distinctive qualities that provide a company with an edge in acquiring greater market share, attracting a larger audience, and maximising profitability are essentially its strengths. The following are Prakash Industries’ strengths:
- Integrated Operations in India: Though it is a technical element, the entire process of extraction from mines and ores to producing finished steel material is integrated in India. The combined processes save a lot of time and money while maintaining the desired quality.
- Market Position: Prakash Industries is one of the world’s most prominent steelmakers and the world’s second-most geographically diverse steel producer. It has a significant presence in Asia, the Pacific, and Europe.
- Product Portfolio: As can be seen, Prakash Industries offers a diverse range of goods ranging from flat steel to agricultural tools to building materials and much more. A diverse product portfolio provides revenue from many markets across the world.
- Prakash Industries’ Trust: Because of its quality, it is one of the most trusted and famous brands not only in India but also throughout the world. At the same time, the association with the name generates enormous brand equity for the company.
- Global Footprint: Prakash Industries has a global footprint of over 50 nations, with activities in over 26 countries, increasing its penetration and share.
- Capability & Adaptability: This company produces about 14 million tonnes of ore each year from its captive collieries, iron ore mines, and quarries. The company’s fundamental flexibility is due to its fast-changing environment. There are operations in 26 countries and a billboard presence in over 50.
- The Great Old Experience: Prakash Industries, a pioneer organisation in the steel manufacturing industry has over three decades of experience in Owning, Operating, Maintaining & Controlling steel mining and production.
- Government Support: Prakash Industries gets immense support from the government of India which is why the limited company is still generating revenues in increasing directions.
Weaknesses of Prakash Industries
Weaknesses are the areas where the company is lacking behind and needs improvement. Let’s have a look at the weaknesses of Prakash Industries:
- Overdependence on Europe: Despite being an Indian brand, you may be aware that more than half of Prakash Industries’ business originates from Europe, and so any economic slowdown in Europe such as the recent war has an impact on their sales.
- Fragmented Operations in Europe: While Prakash Industries’ operations in India are integrated, its operations in Europe are disintegrated, requiring them to rely on a variety of different suppliers from other nations. As a result, quality control is compromised, and expenses rise.
- Functional Issues: The operational efficiency of the country is not as good as that of world leaders. On the technological front, it is somewhat trailing.
- Limited Portfolio Diversity: Prakash Industries’ portfolio is not as diverse as that of other industry heavyweights such as Tata Steel, JSW Steel, Reliance Steel & Power, BHEL, and others.
- Raw Material Scarcity: Having fewer mines under its control has an impact on the supply of primary resources. As a result, raw materials are sometimes unavailable.
- Government Intervention: Government intervention and decisions in the steel mining and producing business can cause operation inefficiency and labour unemployment.
Opportunities for Prakash Industries
Potential areas of attention for a corporation to enhance results, expand sales, and, ultimately, profit help determine the opportunities of a company.
- Adapt Newer Technologies: Prakash Industries falls behind its rivals in terms of technology and has the opportunity to embrace modern technologies such as the Cortex process, Hismelt process, Direct iron ore smelting, and so on.
- Increasing Steel Demand: The steel market in India is expected to rise over the next four years as the housing sector and manufacturing facilities in India expand. Prakash Industries will undoubtedly gain from this.
- Global Development: Future growth in the industrial, construction and automotive industries will drive industry expansion, and Prakash Industries will gain from it. Public-private collaboration. Acquisition of coal blocks in Asia, Africa, and elsewhere.
- Expected Rise in Domestic Steel Consumption: Domestic steel demand is predicted to expand rapidly across all sectors with a stable central government and a strong attitude to projects such as the “Make in India” campaign. With a diverse range of outputs, modern technology, and flexibility, Prakash Industries is well-positioned to gain from India’s next economic cycle.
- Strategic Acquisitions: Prakash Industries has made strategic acquisitions such as Ispat and Welspun. Such purchases will assist the corporation in achieving more economies of scale and expanding its product offering. Prakash Industries has become India’s second-biggest steel manufacturing firm through acquisitions of enterprises.
Threats to Prakash Industries
Threats are environmental factors that could potentially be detrimental to a company’s growth. Following are some of the factors that pose a threat to Prakash Industries:
- Intense Competition: Prakash Industrie’s primary competitors continue to include JSW Steel, Essar Steel, and ArcelorMittal, among others. According to prior experience, this diminishes its global market share.
- Government & 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 organisations concerned about the environment also have their eyes on the steel industry due to its threat to natural resources and the environment.
- Global Steel Prices are Falling: Because of excess production in China, steel became more affordable to the rest of the world, forcing the process to be scaled back globally. Cooking coal costs are rising.
- Miscellaneous Issues: In India, there has been a fierce uprising against land acquisition, government and regulatory guidelines and international competition is also a hindrance to their business.
- Changes in the Prices of Raw Materials & End Products: Steelmaking necessitates the use of iron ore, metallurgical coal, limestone, and other minerals. All of these resources are limited, and obtaining them is tough. Because it is often difficult to mine in particular places, the prices of raw resources continue to rise, and even the prices of final products fluctuate; this is a threat for Prakash Industries.
This ends our extensive SWOT analysis of Prakash Industries. Let us conclude our learning below.
One of the biggest takeaways of this article can be how Prakash Industries has always been an inspiration to many businesses for being innovative and technologically forward. The company, being one of the leading steel producers in India has always put a good hand forward to help the country flourish by conducting CSR activities and at the same providing quality products.
The company has ever since gained huge recognition for being one of the companies to embrace digital marketing to make its products well known. With the current trend of customers buying everything online, businesses need to follow the same and retain their customers.
Digital Marketing is one such tool that can help businesses to approach a huge audience in the digital world. Thus, to be skilled at knowing the basics of digital marketing in today’s business scenario is a must. To learn more about digital marketing, you can head to our page and check out IIDE’S 3 Month Advanced Digital Marketing Course to know more. You can also start your journey in digital marketing by taking our short term certificate courses in digital marketing and learning different topics related to the field of digital marketing.
We hope this blog on the SWOT analysis of Prakash Industries has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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