Introduction of Tata Steel Limited
Tata Steel Limited (previously Tata Iron and Steel Company Limited (TISCO)) which was established in 1907, it was the Asia’s first and India’s largest privately owned steel company. This company was the flagship company of Tata group, which started by Jamsetji Tata. Tata Steel had expended the business globally and successfully; their business have been running all over the world. It was ranked the 11th largest steel producing company in the world in 2013.
Is Tata Steel Limited successful just because it is using the right market strategy? Is Tata Steel Limited earning a big profit just because the workers are hard-working? In this essay, I ...view middle of the document...
Economic is the basic of modern politics. It is very important to a business. It includes interest rates, economic growth exchange rate and the inflation rate. These factors have huge impacts on how the business to set up its strategy and make decisions. For instant, exchange rates affect a firm’s cost or the revenue and therefore to consider whom to purchase and sell. Inflation rate affect the cost directly and plan for spending more money for expansion. If these factors are not stable, so the firm may face an expectable loss. With the changes in economic factors, a firm should have some particular tactics to overcome the difficulties and to sustain in the down turn period.
Since the market had changed to a free market, the economy had a very rapid growth in economy. From 2003 to 2013, India’s Gross Domestic Product had been growing with a growth rate of 6%.
During the terrific boost, India’s steel industry was benefited by this. Although there are numbers of new composite materials, such as, plastic and aluminium, being invented at an increasingly rapid speed, steel is still in irreplaceable material for construction. It is very inevitable for different kind of uses. For instance, freight-ship construction, car manufacturing, dispensable for railroads and the building of skyscrapers, these constructions are using steel as a main resource. Therefore, there is money to be made in steel as longs as the company is still running. The steel’s production went up around 6% to nearly 38 million tonnes. Due to the capacity of iron ore and coking coal in Jamshedpur were closed to the saturation point, so Tata Steel has been given an advantageous position to be set up at that time. This helped to lower the raw material, transportation cost, etc. In this few years, India’s steel industry had been modernised, although the majority of India’s steel was still produced with the inefficient open-hearth process. Tata Steel tried to use a more effective way of continuous casting its steelworks. It increased the capacity from 7 million tonne per annum to 10 million tonne in 2010. Along with expanding the capacity of its existing facilities, Tata Steel has established a numbers of green-field projects to increase its capacity as well. These projects included 6 million tonne per annum pant at Orissa and 5 million tonne per annum plant at Chhattisgarh, etc.
While there were local mines of iron ore and coking coal at Jamshedpur, the domestic raw material recourses were inefficient to supply the growing Indian steel industry. The hard coal deposits in India were in low quality, and therefore importation of hard coal had increased within the last five years ‘by a total of 40% to nearly 30 million tonnes.’ This made Tata steel sensitive to fluctuations in the price of raw materials from other countries, and they also had the added costs of importing these raw materials.
The productivity of the workers in India was not too outstanding if...