We previously looked at the Marketing Strategy of Tata Steel. This time, we’ll take a look at the SWOT Analysis of Tata Steel and delve deep into the company’s workings.
Tata Steel is one of among leading brands within the industrial products and chemicals sector. They probably had an impact on your life today, even if you aren’t aware of it. From the vehicle you drive to the house you reside in, they convey worthy quality through their tailored value-added solutions to make our lives easier.
Tata Steel’s marketing activities have aided them in their endeavours. Marketing changes with time in response to the current population’s wants and preferences. The majority of successful campaigns have now moved to digital media. Check out our Free MasterClass on Digital Marketing 101, delivered by Karan Shah, CEO and Founder of IIDE, if you want to learn more about today’s effective marketing.
To better understand the path behind Tata steel’s continuous growth via the SWOT Analysis of Tata Steel, let’s first delve into the company, its founding, financial status, products/services and competitors.
About Tata Steel
Tata Steel, with an annual crude steel capacity of 34 million tonnes, is one of the world’s major steelmakers. It was founded in India in 1907 and is regarded as Asia’s first integrated steel firm.
The Tata Iron and Steel Company (TISCO) was formed on August 26, 1907, by Jamsetji Nusserwanji Tata and Sir Dorabji Tata. They constructed India’s first industrial city in Jamshedpur. On February 16, 1912, the first steel ingot was produced. The firm saw considerable expansion during World War I.
Tata Steel has deemed its presence in around 50 countries and own production operations in 26 countries, including India, Canada, Vietnam, Mozambique, UAE, the United Kingdom, Australia, France, and others. They own and run captive mines that help them maintain cost-competitiveness and production efficiency by supplying basics on a consistent basis. That is how they maintain their position as Asia’s lowest-cost steel production.
|Origin||Mumbai, Maharashtra, India|
|No. of Employees||32,364|
|Market Cap||₹1,61,664 Crore (2021)|
|Annual Revenue||₹64,869 Crore (2021)|
|Net Profit||₹13,606 Crore (2021)|
Products by Tata Steel
Following are among the few and major products manufactured and sold by Tata Steel –
- Long steel products
- Structural steel
- Wire products
- Steel casing pipes
- Household goods
Competitors of Tata Steel
There are various organisations built to cater to social needs for steel. Here are the top 5 of Tata Steel’s competitors –
- Jindal Steel and Power
- JSW Steel
- VISA Steel
Now that we are familiarised with the background of the company, without further ado, let’s delve deep into the SWOT Analysis of Tata Steel.
SWOT Analysis of Tata Steel
SWOT Analysis is an overall appearance that is proven and enables a brand like Tata Steel or any other company to mark its business & performance as compared to the competitors as well. The strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.
1. Strengths of Tata Steel
A company’s strengths are the internal factors that provide it with an advantage in establishing a larger client base and high profitability. Let’s look at how Tata Steel compares to its peers in terms of competitive strength –
- Integrated operations in India: The entire process of extraction from mines and ores to producing finished steel material is integrated in India though it’s a technical part, they have that equipment support. The integrated operations save tons of your time and price and also maintain the specified quality.
- Market Position: Tata Steel is one of among foremost important steel manufacturers on the planet and thus the world’s second-most geographically-diversified steel producer. It has a strong presence in Asia-pacific and Europe.
- Product Portfolio: You can see that Tata Steel features a wide selection of products starting from flat steel products, agricultural implements, construction products, and many more. A diversified product portfolio ensures revenue due to different markets around the world.
- Trust of TATA: Tata is one among the foremost trusted and popular brands not only in India but also everywhere on the planet because of their quality. The association of the name provides immense brand equity to the corporation at the same time.
- Global footprint: Tata Steel has a presence in over 50 countries with operations in over 26 countries which increase its penetration and share.
- Capability & Adaptability: Every year this Company raises over 14 million tonnes of ores from its captive collieries, iron ore mines, and quarries. A fast-changing environment is the main adaptability of the company. Operations in 26 countries and a billboard presence in over 50 countries.
2. Weakness of Tata Steel
Weaknesses are qualities of a business or brand that need to be improved. The following are some of Tata Steel major flaws:
- Over-dependence on Europe: Though it’s an Indian brand, you may know over 50 per cent of Tata Steel’s business comes from Europe and thus any economic slowdown within Europe affects Tata Steel’s revenues.
- Mistry’s fiasco: The fallout between Ratan Tata and Cyrus Mistry has hurt the image of the Tata group which also translates to Tata Steel.
- Disintegrated operations in Europe: Although Tata Steel’s operations in India are integrated; its operations in Europe are disintegrated and hence are hooked into various other suppliers from the other countries. For this reason, this affects control on quality and increased costs.
- Functional Issues: Operational efficiency is not as good as international leaders. Slightly lagging on the technological front.
3. Opportunity for Tata Steel
Opportunities are potential areas that give a firm the opportunity to improve its outcomes, increase sales, and profit. Tata Steel has the following opportunities:
- Adapt newer technologies: Tata Steel lags behind its competitors within the technology front and has a chance to adopt newer technologies like the Cortex process, Hismelt process, Direct iron ore smelting, etc.
- Increasing demand for steel in India: The steel market in India is predicted to grow within the next 4 years thanks to the expansion within the housing industry and manufacturing facilities in India. This will certainly benefit Tata Steel.
- Global Expansion: Growth in the manufacturing, construction and automotive industry within the future will drive the expansion within the industry and Tata Steel is set to benefit from it. Public-private partnership.Acquisition of coal blocks in Asia, Africa, etc.
4. Threats to Tata Steel
Threats are external factors that may have an impact on a company’s growth. The following are some of Tata Steel threats:
- Intense competition: JSW Steel, Essar Steel, and ArcelorMittal, etc are still the main competitors of Tata Steel. This reduces its market share worldwide according to the previous experience.
- Government and Environmental regulations: Increases compliance costs for the corporate cause Tata Steel is subjected to stringent governmental and environmental regulations in mining also as production.
- Decreasing global steel prices: Excess production in China meant that it supplied steel cheaper to the planet which forced the method to lower down throughout the planet.Rising coking coal prices.
- Miscellaneous issues: India is plagued with violent agitation against land acquisition. Government & regulatory norms. International competition also hampers their business.
With this, we come to the end of the SWOT Analysis of Tata Steel. In the below section, let’s briefly summarise the takeaway of this case study.
Tata Steel is a well-known name in the industrial goods and chemicals industry. Some of the key concerns include functional difficulties, overdependence, and break up with Europe. Based on the information presented above, Tata Steel should concentrate on meeting demand inside India and expanding their services to additional nations, all while upgrading and adapting to current technology for better results.
It has a global reach that goes beyond its limits, not just in its native nation but also geographically. The brand’s marketing strategy, which includes control over manufacturing and distribution, has a strong presence both online and offline.
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