Tata Steel is among the leading brands in the industrial as well as chemical sector. The company’s products have been impacting our lives in a positive way even if we are not aware of it directly. Let us see everything in detail about the swot analysis of Tata Steel and discover its workings.
About Tata Steel
Be it your vehicle or the house you stay in, the company offers high quality with its customized value-added solutions that have made our lives very much here.
The marketing activities of Tata Steel have made huge advancements and the company has been making marketing changes from time to time as per the population preferences. A number of successful campaigns of the company have been shifted to the digital world.
Tata Steel has a natural steel capability of more than 35 million tonnes per year. It is one of the biggest steel makers across the globe. The company was established in 1907 in India and is termed the first integrated Steel company in India.
In 1907, Jamshedji Tata and Sir Dorabji Tata incepted TISC Company (Tata Iron and Steel Company). However, the company expanded usually during World War I. Today l, the company has presence in approximately 50 countries and has self-production operations in more than 20 countries. They have their own captive mines that help them maintain cost-effectiveness as well as effective production by supplying steel regularly.
Tata Steel at a Glance
| Present CEO & MD | Mr. T V Narendran |
| Year of Establishment | 26 August 1907 |
| Annual Revenue (as of FY24) | US$28 billion |
| Net Profit (as of FY24) | US$−590 million |
| Origin | Jamshedpur, Jharkhand, India |
| Type of Company | Public |
| Total no. of employees | 77,000 |
| Total assets (as of FY24) | US$33 billion |
SWOT Analysis of Tata Steel
Now, let us see the SWOT analysis of Tata Steel in detail with its comprehensive strengths, weaknesses, hazards, and opportunities.
Strengths of Tata Steel
The strength of Tata Steel is the competitive advantage of being the biggest steelmaker company in India along with some other strengths. Let us now see more strengths in detail.
Unified operations
The process of extracting steel from mines as well as ores till producing finished steel material is made in India. Even though it is a technical area the company has the required equipment support. These unified operations of the company help it save huge time and cost while also helping to maintain the specified quality of steel.
Sturdy demand
Tata Steel is the leading steel producer not only in India but also across the globe. Additionally, it is the second most diversified Steel producer as per the geographical conditions. Talking about its strong presence, the business has a powerful sight in Europe and Asia Pacific territories.
Huge product portfolio
Tata Steel offers a different selection of products starting from agriculture implements construction-related products, steel products, etc. This kind of diversified portfolio helps companies gain more revenue in different markets.
Worldwide footprint and trust
The company has a presence in more than 50 countries across the globe which clearly indicates its big market share and penetration. Also, Tata Steel is one of the most trusted brands in the world known for their top quality products. The brand is closely associated with consistency, top quality, and productivity.
Weaknesses of Tata Steel
Weaknesses are those areas for a company that needs to improve. Tata Steel has the following weaknesses –
Dependency on other countries
Tata Steel being an Indian brand is 50% dependent on the Europe market. However, if the economy falls down in Europe then it hugely affects the revenues of Tata Steel.
Spoiled brand image
Ratan Tata and Cyrus Mistry had a big fallout which tarnished the image of Tata Group immensely and transferred the spoilage to Tata Steel.
Lack of operations in Europe
Tata Steel has operations in India which are quite unified but its Europe operations are disintegrated and are a bit complex with different suppliers across the globe. It is this reason why the quality may be affected sometimes and the cost increases.
Functional concerns
When we compare Tata Steel with other companies then the operation and efficiency is average and lag a bit on the technical side.
Opportunities for Tata Steel
Opportunities are those areas that help the company grow and improve its outputs and profits.
Following are the opportunities for Tata Steel in the market –
Adoption of new technologies
Tata Steel is behind its rivals on the technical front and has a huge area to adapt latest technology including Cortex, Hismelt processes, etc.
Huge demand for steel
The Indian steel market is estimated to grow immensely in the next 5 years due to the expansion in the housing industry as well as in the manufacturing facilities. Tata Steel and leverage this opportunity to expand its base and products.
Worldwide expansion
Today the world is constantly transforming in the construction, automotive, and manufacturing sectors which is driving the demand for steel. Tata Steel can leverage this opportunity for public-private partnerships and can also make acquisitions of coal areas.
Threats to Tata Steel
A number of external factors affect the company’s growth and these factors are the threats to the company.
Severe competition
The main competitors of Tata Steel are Essar Steel, JSW Steel, etc. These competitors are the main reason behind the reduced market share of the company as per the previous experience.
Rules and regulations
Another threat to Tata Steel is the government and environmental regulations that need to be followed from time to time. High compliance cost for the corporate concern is related to the government as well as environmental rules and regulations of mining.
Reduction in steel prices
Excessive production of Steel in China indicates that steel is getting cheaper for the customers. This forced to reduction of the prices of steel across the globe.
Various Issues
India has a number of issues to deal with including land acquisition, violent agitation due to that, etc. The country also has to deal with government as well as regulatory concerns that hamper the steel business.
Top Competitors of Tata Steel
Here are the top 5 competitors of Tata Steel –
- Arcelor Mittal – Having its headquarters in Luxembourg, the company offers a wide range of steel products and competes with Tata Steel in the industry.
- Nippon Steel Corporation – The company is a strong competitor in the construction, automotive, and infrastructure sectors.
- POSCO – Like the rest companies, POSCO also competed with Tata Steel in various sectors like shipbuilding, automotive, etc.
- SAIL – Steel Authority of India Ltd offers wide products in engineering, construction, automotive, etc.
- JSW Steel – It is the strongest competitor of Tata Steel in the Indian market with a strong presence in long and flat steel products.
Conclusion
Tata Steel is a reputed name in the chemicals and goods industry. The main elements include over-dependence as well as functional complexions with Europe. Therefore, it is highly recommended that Tata Steel completely concentrate on fulfilling the demands of the customers in India expanding their unique services across the globe with some additional nations, and upgrading their technologies for better outcomes.
Tata Steel has a worldwide reach and its marketing strategy includes dominating manufacturing and distribution areas with offline and online presence. The company makes use of different channels as well as digital marketing strategies including content marketing emailing, SEO, etc. Also, it is recommended that the company should turn its weaknesses into powers for alluring results.