NALCO Case Study Paper

need another 20 years to supply its own scarps. Until such time, the import of scrap from the matured markets is a better option.

Extend value chain by vertical integration: As per the annual report of NALCO (2014, p. 86), the cost of the major raw materials constitute about 17 % of the sales amounting to US $ 170 million. According to the company's internal data, there is a rise in the cost of raw materials ranging from 5-15 % per year. Because of price volatility in the LME, any minor upward revision in the prices of the raw materials will adversely affect the company's bottom line. Extending the value chain for major raw materials will ensure competitive advantages to the company, while insulating the impact of price fluctuations in the
If this option materializes, it will truly complement the vision statement of the company, i.e., to be 'globally reputed company in the energy sector.' The company is already in the business of power generation for three decades with captive grid for distribution to the state's network. NALCO has adequate numbers of experienced power engineers and professionals with long experience in power generation, whose experiences can be gainfully utilized by the company. This diversification has the potential to generate sizeable revenues to the company at a time, when the entire country is reeling under energy crisis.

Strategic alliance with technology provider for up-gradation, waste management, research, and development: In the past, the company has faced the public wrath in the area of management of industrial and hazardous waste. With growing concerns on sustainability and pressure from the public, and the NGO, the company needs to make strategic alliance with technology provider for finding long-term solutions. Since the pressure is likely to be mounting in the coming years, management and dilution of the existing waste with a structured approach and committed action plan will be of paramount
Short-term strategic options: The suggested strategies that can be implemented within a time range of 2 to 3 years are:

• add value added products;
• recycling;
• strategic alliance with technology provider for management of waste;
• introducing commercial grade aluminium with low purity.

Long-term strategic options: The suggested strategies that can be implemented within a time range of 5 to 7 years are:

• acquire captive coalmines and commercial production of coal,
• further vertical integration, and extension of the supply chain,
• independent power production, distribution, and retailing.

For each of the strategic options, the company has the requisite experience, skills, and competence to implement within the time frame. Before the real time execution, each of the strategic options is to be further evaluated to assess the cost-economic benefits, risks involved, market survey, and overall strategic life cycle to gauge the extent of growth and sustainable competitive advantages derived by the