Profitability Analysis of Steel Industry
Industrial Organization and Competitive Strategy
Analysis of competitive advantage of Tata Steel in the Indian Steel Industry.
Submitted by:-
Himanshu Singh, G12024
Paul Jacob, G12034
Aninda Goswamy, G12008
Objective:
This study has multiple goals:-
1. To find out if Tata Steel does enjoy a competitive advantage vis-à-vis other players in the Steel industry in India.
2. To ascertain the source of this competitive advantage.
3. Find out if this competitive advantage is sustainable.
Industry Overview
India today is one of the topmost producers of steel in the world. With the industry attributes like low cost manpower and abundance of iron ore and coal reserves India today is a highly competitive market. The reasons for expansion of the sector can be primarily attributed to the huge expansion of the oil and natural gas sectors on infrastructure projects coupled with growth in housing, and the increase in demand for consumer durables and automobiles.
According to the World Steel Association, India is the fourth largest producer of crude steel. India has an annual capacity of 80 million tons. With the government laying a lot of emphases on the infrastructure space the sector is poised to grow.
The 1991 economic reforms has propelled the industry and its growth, and the steel industry has been positively been affected by it. With the licence requirement being removed and the
Automatic approval of foreign equity investment up to 100 per cent is now available. Price and distribution controls were removed 20 years ago in an effort to make the steel industry more efficient and competitive. Restrictions on external trade, both on imports and exports have been abolished. Meanwhile, import duty rates have been reduced considerably. Certain other policy measures such as the reduction on import duty of capital goods, the convertibility of the rupee on trade accounts, the ability to mobilise resources from overseas financial markets, and the
Analysis of competitive advantage of Tata Steel in the Indian Steel Industry.
Submitted by:-
Himanshu Singh, G12024
Paul Jacob, G12034
Aninda Goswamy, G12008
Objective:
This study has multiple goals:-
1. To find out if Tata Steel does enjoy a competitive advantage vis-à-vis other players in the Steel industry in India.
2. To ascertain the source of this competitive advantage.
3. Find out if this competitive advantage is sustainable.
Industry Overview
India today is one of the topmost producers of steel in the world. With the industry attributes like low cost manpower and abundance of iron ore and coal reserves India today is a highly competitive market. The reasons for expansion of the sector can be primarily attributed to the huge expansion of the oil and natural gas sectors on infrastructure projects coupled with growth in housing, and the increase in demand for consumer durables and automobiles.
According to the World Steel Association, India is the fourth largest producer of crude steel. India has an annual capacity of 80 million tons. With the government laying a lot of emphases on the infrastructure space the sector is poised to grow.
The 1991 economic reforms has propelled the industry and its growth, and the steel industry has been positively been affected by it. With the licence requirement being removed and the
Automatic approval of foreign equity investment up to 100 per cent is now available. Price and distribution controls were removed 20 years ago in an effort to make the steel industry more efficient and competitive. Restrictions on external trade, both on imports and exports have been abolished. Meanwhile, import duty rates have been reduced considerably. Certain other policy measures such as the reduction on import duty of capital goods, the convertibility of the rupee on trade accounts, the ability to mobilise resources from overseas financial markets, and the