STEEPLE and SWOT Analysis in the TATA Steel - Assignment Example

Analysis of an Steeple and Swot in the TATA Steel Introduction TATA Group is one of the leading legacies of India in having achieved its mark in business sector since more than 100 years. TATA Steel was one of the earliest ventures of the group which succeeded in implementing new changes with the passage of time. Over the period of time, it has been able to continuously evolve itself by being more proactive. Above, all TATA Steel was able to build strategic relationships with its community by contributing through various means. What is also significant to understand that TATA has been able to contribute to its environment not just to manage its corporate image as most firms do but achieved the same through genuine contribution to society. (Moir, 2001). This report will present an STEEPLE and SWOT Analysis of the TATA Steel based on the facts and figures provided in the case study by taking a bird eye view of the whole picture. STEEPLE Analysis Social Contributing towards society has remained a hallmark of TATA as the same has also resulted into the increased brand image for the firm as well as value.(Tangen,2004). However, what is also significant to note that due to competitive pressures as well as changes in the ownership structures of the firm, the overall priorities of the firm are changing and its historical legacy may not entirely be its guiding principle in future. Technological Technological factors have relatively changed over the period of time with focus now on developing sustainable technologies. Further the concern for having a technology which is safe for the workers. TATA has been able to base its technology management by keeping a pace with the time. Time based management of technology therefore has to be successfully integrated with other values such as focus on quality etc to achieve the desired objectives of the firm.(Gehani,1995). Environmental Environmental factors may be a significant challenge for the firm in future however, given the fact that TATA Steel has a history of contribution towards society; environmental factors may not be a significant threat. Further, the town of Jamshedpur has been designed by the firm itself as well as the interior of the plant indicate the overall concern for the environment. Economic Historically, firm has been able to perform better amid severe economic crisis owing to its relationship with the community and employees. The strong brand image has been the factor behind the consistent performance of the firm amid varying economic scenarios. Political Historically firm has been able to gain significantly due to political changes that took place in India. It has been able to successfully see off different nationalization attempts as well as different political pressures in the past. Legal Legal environment seems to be relatively more favorable for TATA because it has been to benefit from it. Possession of the firms through promulgation of nationalizations laws as well as de-regulation both could not hamper the growth of the firm. Ethical TATA’s overall philosophy of work seems to be doing business for the purpose of value creation. Business has been done from the perspective of creating value for all the stakeholders rather running the business as war.(Hansen&Smith,2006). Thus ethics have been used by the firm to achieve its consistent growth as well as market acceptability in a bid to achieve the value. SWOT Analysis Strengths 1. Rich history of success 2. Strong Brand Image 3. Community services 4. Quality Weaknesses 1. Narrow market base 2. Too much reliance and focus on community service 3. Larger outside influence Opportunities 1. Opportunity to diversify into new markets 2. Growing Indian market 3. New product development specially in Aluminimum Threats 1. Globalization 2. Growing influence of international investors and buyers. Porter’s Five Forces TATA has been fortunate enough in the sense that it has been able to withstand different pressures not only from their competitors but also from government. Overall the bargaining power of the buyers and suppliers is relatively low whereas the product is also generic in nature therefore there is a very little probability of having a competition from the substitute products. What is however, significant to understand is the fact that there are some natural barriers to entry which may further allow TATA to safeguard itself from the competition owing to high cost of capital. Considering above factors, it is therefore evident that there is moderate degree of rivalry between the competitors. Analysis The above analysis indicates very important insights into as to how the firm may be able to earn higher returns as well as keep its superiority over the competitors. It is important to understand that TATA has utilized its community service for its enlightened self interest however; it has been able to create value for itself. Corporate social responsibility, being a business strategy of responsibility towards community therefore can further provide TATA a sustainable advantage over its competitors.(Scott,2007). Further, its adoption of the latest manufacturing methods as well as more focus on the diversification will further allow it to create a niche for itself which can offer a further sustainable advantage to it in the future. Though the pressures of globalization and regional integration may hamper the progress of the firm in international market however, thriving on the increase in the local demand, TATA can further increase its domestic market first before consolidating and re-focusing on the international market with much vigor. Its brand image in Indian market therefore can provide it relatively better competitive advantage as compared to its international as well as local competitors. It is often argued that from a strategy perspective, the success of the services rendered by the firm to its community largely depends upon how successfully the managers are able to create that link with different other stakeholders benefit. (Navarro & Martinez,2009). Based on this argument, it is therefore critical for the overall success of TATA that it must develop a link between its organizational objectives with that of the corporate social responsibility in a bid to balance its roles between different stakeholders. This way, the firm will be able to neutralize the influence of all stakeholders and will focus on diversifying into new markets and products to achieve the higher returns in a market which is relatively more volatile. Conclusion TATA Steel has a rich legacy of serving its community and develops its stature within the Indian economy. However, increasing pressures from international institutional investors is pressing it hard to achieve the better returns and re-examine its strategy of serving the society at the cost of stakeholders. It is therefore important that a balancing of roles is achieved between all the stakeholders in order to achieve and maintain the competitive advantage in the market besides offering shareholders an opportunity to earn higher returns. References 1. Gehani, (1995) Time-based management of technology: A taxonomic integration of tactical and strategic roles. International Journal of Operations & Production Management. 15 (2) 19-35 2. Hansen, F & Smith, M (2006) The ethics of business strategy. Handbook of Business Strategy. 7 (1) 201 – 206 3. Moir, L (2001) What do we mean by corporate social responsibility?. Corporate Governance. 1 (2) 16 – 22 4. Navarro,, J & Martinez, A (2009) Linking corporate social responsibility with admiration through organizational outcomes. Social Responsibility Journal. 5 (4) 499 – 511 5. Scott, S (2007) Corporate Social Responsibility and the Fetter of Profitability. Social Responsibility Journal. 3 (4) 31 – 39 6. Tangen, S (2004) Performance measurement: from philosophy to practice. International Journal of Productivity and Performance Management. 53 (8) 726 – 737 Read More