BUSINESS STRATEGY FORMULATION IN TATA STEEL IN EUROPE
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Table of Contents INTRODUCTION ..........................................................................................................................3 TASK 1: REPORT...........................................................................................................................3 1.1 How business mission, vision inform strategic planning ......................................................3 1.2 Factors considered while formulating strategic plans ...........................................................4 1.3 Effectiveness of techniques used when development strategic plans ...................................5 2.1 Strategic positioning of Tata steel Europe ............................................................................6 2.3 Significance of stakeholder analysis .....................................................................................7 3.1 Analysing Appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment. ..............................................................................................................8 3.2 Justifying selection of strategies in terms of suitability, feasibility and acceptability ..........9 4.1 Assessing roles and responsibilities of personnel in Tata Steel Europe ............................10 4.2 Estimating resource requirements to implement new strategy for Tata Steel Europe ........11 4.3 Contribution of smart targets to achievement of strategy implementation ........................12 CONCLUSION .............................................................................................................................13 REFERENCES ..............................................................................................................................14
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INTRODUCTION Business strategy is associated with overall plans and policies being developed by business with the motive to accomplish desired goals and objectives. Further, in the modern era where businesses operate market has become challenging due top which companies are required to develop effective strategies for their overall growth and development (Epstein, 2008). Apart from this, mission and vision of every business is developed with the help of which it can be easily known the main reason behind conducting overall operation. Moreover, different strategies are being employed by companies such as market entry, substantive growth etc with the help of which it become easy to carry out overall operations. The present study is based on Tata steel where company is second largest steel producer with steel making facilities in Europe. Business is indulged into practices of supplying wide range of steel, organic and metallic coated products. Further, business has developed effective business strategy in order to successfully operate in the market. Apart from this Tata steel operates on wider basis due to which each and every strategy is being developed by analyzing the overall business environment. Various tasks have been covered in the study which involves factors to be considered while formulating strategic plan, significance of stakeholder analysis etc.
TASK 1: REPORT 1.1 How business mission, vision inform strategic planning Mission statement of the enterprise supports in knowing its overall functions, market and all other range of activities being carried out. Further, it highlights the reason for existence of enterprise in the market. Moreover, vision of the organization is declaration of all the objectives of the company which supports in taking different type of decisions (Ferrell and Hartline, 2010). It supports in knowing what organization wants to accomplish in near future and in turn acts as development tool for the business. Mission of Tata steel is to strengthen India’s industrial base through proper utilization of resources such as materials and staff. Further, organization has employed advanced technology to enhance overall productivity and this supports in accomplishing overall objectives (Thompson, 2005). Apart from this, vision of enterprise is to be global steel industry benchmark for value creation along with corporate citizenship. Overall goals and objectives of Tata steel are enhancing market share along with profitability, expanding product base, increasing global presence etc. Apart from this, core competencies of the organization involve research and development activities, product expansion, strong financial base etc. All these competencies directly contributes in strategic planning of the business. Further, large numbers of plans are being prepared by enterprise where vision, mission along with strategic planning assists in development of such plans which enhances market performance of the entity in Get best Marketing Assignment Help by the dedicated writers of Assignment Desk at very less price to score higher grades.
every possible manner (Ohnson and et.al .,2013). Apart from this, market where organization operates is highly competitive due to which strategic plans provide base in competing with other firms on continuous basis. Mission and vision of Tata steel totally relies on the long term aims of the business where each and every area of business contributes in achievement of desired objectives and has supported company in gaining competitive advantage. In short without setting overall aims and objectives it is not possible for company to indulge into practices of strategic planning and it can lead to decline in overall level of performance (Rothaermel, 2015). On the basis of overall objectives plans are modified by Tata steel and it influences overall performance of entity. Apart from this, long term objectives of Tata steel highlights that company wants to expand its share in the steel industry and have to offer highly differentiated products to its target market. So, this is also one of the most integral parts of strategic planning which only takes place by forming mission, vision, long term objectives (Malerba and et.al., 2015). 1.2 Factors considered while formulating strategic plans Strategic plans are most important for company and by forming the same it becomes easy for organization to focus on its overall goals and objectives. Further, development of strategic plan is not at all easy for business and it requires consideration of large number of factors. Following are the key factors which Tata steel has to consider at the time when strategic plans are prepared and they are: Need and expectations of customers: Company has to clearly identify the actual requirement of the target market. Further, steel and other type of products are being used in commercial properties due to which target market of business is somehow different. Moreover, Tata steel has to ensure well in advance what type of steel customers prefer to purchase and on the basis of same strategic plan is being developed by the organization for its future growth (Spender, 2014). Apart from this, main priority of company is to enhance customer satisfaction as its absence can bring unfavorable results for enterprise in the market where it operates. Efficiency of the workforce: It is necessary for staff members working in Tata steel to identify whether its workforce is efficient enough in formulation of strategic plans or not. Further, in case if organization is having efficient workforce then it highlights that plans can be easily formulated along with this its implementation is quite effective of organization (Taylor and et.al., 2013). Therefore, it is also regarded as one of the most crucial factor at the time when strategic plans are being developed. Business environment: It is necessarily required for Tata steel to analyze the surroundings where it operates. Further, large numbers of challenges are being present such as competition along with legal barriers Get best Marketing Assignment Help by the dedicated writers of Assignment Desk at very less price to score higher grades.
which prevents company from accomplishing desired goals and objectives. Due to this reason development of effective strategy is must so that business can easily operate in the market and in turn it becomes easy to deal with the hurdles affecting overall performance (Yudin and et.al., 2014). Apart from this, business environment consists of various components and due to this reason identifying such components leads to favorable results for company in every possible manner. So, these are some of the most important components which need to be considered by Tata steel at the time of formulating strategic plans and same leads to favorable results for business operating in the market. Through appropriate plans long term performance can be enhanced easily (Bederr and Chen, 2015). 1.3 Effectiveness of techniques used when development strategic plans Different types of techniques are being present with the help of which business can easily develop strategic plans and it has positive impact on overall performance. SWOT analysis is regarded as one of the most effective technique with the help of which business is able to identify strengths along with weaknesses in the internal environment (Longoni and Cagliano, 2015). Along with this, opportunities and threats in the external environment can be identified easily. Overall strength of Tata steel allows company to indulge into practices of better strategic plans and in turn business is able to gain competitive advantage with the help of this. Moreover, through this tool it becomes easy to identify the range of opportunities along with threats present in the external surroundings and same supports in enhancing overall level of performance (Santos and Baptista, 2015). Without undertaking this tool it is not at all possible for organization to undertake any type of strategic plan and can lead to unfavorable outcomes for business in the market. Moreover, SWOT analysis represents the real capabilities of business in the market along with the ways through which better plans can be prepared by company easily. Another model which is being considered by business is PESTLE analysis with the help of which it becomes easy to develop strategic plans (Parnell, 2010). PESTLE analysis as a tool highlights the range of factors affecting business performance such as political, social, economical etc. Apart from this, all these are key factors which influences overall performance of business in the market and allows in performing better if all the factors are undertaken while developing strategic plan fruitful for the business.
PESTLE analysis as a technique is considered to be most effective for Tata steel as organization carries out overall operations in the market where large number of factors are present which influences business
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performance and management has to take corrective measures so that such factors may influence its operations positively (Ghezzi, 2013). These two techniques are most effective for Tata steel especially at the time when strategic plans are being developed by business and in turn it has favorable impact on organization in every possible manner. Apart from this, it can surely lead to positive benefits such as rise in market share along with profitability level of the business. At the time of considering various tools business has to identify its disadvantage so that it is possible to attain favorable outcomes (Pehrsson 2007). 2.1 Strategic positioning of Tata steel Europe In order to understand the real strategic positioning of Tata steel in the market it is necessary to carry out organizational audit where SWOT analysis has been considered as one of the major tool. Strengths
Excellent integration with corus where more than 2000 metallurgists are being present.
Presence in more than 50 counties along with operations in 26 nations worldwide.
Around 14 million tones are raised from captive collieries iron ore mines and quarries.
Well established brand name in the market.
High control over raw materials (Allio, 2006).
Strong financial base.
Ability to meet with the challenges present in the business environment.
Weaknesses
Lack of technologically advanced tools employed.
Ineffective operational efficiency.
Opportunities
In the market of Asia and Africa company can easily acquire coal blocks.
Presence of advanced tools such as corex process, hismelt process etc acts as development tool for the business.
Presence of public private partnership (Alsudiri, Al-Karaghoul and Eldabi, 2013).
Threats
Increase in prices of coal.
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Rise in level of government legislation along with laws.
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Rising international competition.
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Presence of violent agitation in India against land acquisition (Veiga and Franco, 2015).
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2.3 Significance of stakeholder analysis Stakeholder refers to the parties which are associated with the business and they are influenced by the decisions taken by the management. Further, different types of parties are associated with Tata steel and due to this reason business has to identify their needs for enhancing performance in the market. Stakeholders of business are suppliers, banks, employees, customers, government etc (Stan Abraham, 2013). Moreover, need and requirement of every party differs from each other due to which effective strategies are required for satisfying need of every party. With the help of stakeholder analysis organization can easily identify what are the actual expectations of every individual and how they are influenced in case if any new strategy is being implemented by the organization. In case if Tata steel plans to implement any new strategy then it will have direct impact on all the parties associated with the organization (Braun, Latham and Porschitz, 2016). Especially management along with investors, government etc are the main parties who are affected in case when new strategy is implemented by the organization. Therefore, Tata steel is required to develop effective plans so that overall performance of the company is positively affected through introduction of new strategy in the Get best Marketing Assignment Help by the dedicated writers of Assignment Desk at very less price to score higher grades.
workplace. Apart from this, business is required to identify the interest of every party in the affairs of organization as its absence can surely lead to unfavorable results for business in the market such as decline in customer satisfaction level etc ( Akhtar, Lodhi, and Khan, 2015). 3.1 Analysing Appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment. Tata Steel Europe can analyze appropriateness of alternative strategies regarding market entry, substantive growth, limited growth and retrenchment. It is described below in the points. Substantive growth: Management of organization can consider this method for better planning of strategy. Substantive growth is divided in as vertical, horizontal, related and unrelated diversification strategies. Tata Steel Europe can utilize horizontal process for making effective strategic plans. In addition to this, corporation can consider merger approach to expand its operations in United Kingdom (Yuliansyah, Rammal and Rose, 2016). In the this method process, two enterprises are merged together to enhance its business operations in global and national market. Tata steel and other firm can develop approaches to add better values which can support in selling more steel in the current market. Other than this, Merger method can aid the organization to raise its income and revenues of its steel by using both organizational resources. On the other side, it produces delay to make any product development decisions because consent of both directors are necessary to conduct any business activities at the workplace. So these activities create complexities to manage organizational operations effectively in the market (Cheng, 2013). Limited growth: In this process, Tata Steel Europe can consider many strategies to expand its business in United Kingdom. For this, corporation can utilize market penetration and new product development strategies in the market. As per present trend, enterprise can choose new market penetration approaches to enhance its sales of the steel products and services. This method can help Tata Steel Europe to increase its sales and market share in UK. In addition to this, it can aid the organization to enhance its profit in the present sector (Murthy, 2012). Furthermore, It can support the management of corporation to increase its brand value and image front its corporate clients within manufacturing sector. Furthermore, it aids the Tata Steel Europe to develop better business strategies. On other the side, Implementation of strategies are very typical which creates complexities to manage its operations which can create complexities to expand its business (Wang, and Shyu, 2008). Retrenchment: Generally, Tata Steel Europe uses this kind of strategy in recession period. This method can support the organization to decrease reduce its expenditure at the workplace. The main reason behind to use Get best Marketing Assignment Help by the dedicated writers of Assignment Desk at very less price to score higher grades.
this strategy is to reduce their employees due to low sales and profit. In addition to this, it creates issues to provide monthly or weekly salary of many employees at the workplace (Kim, 2016). So, management of Tata Steel Europe terminate its staff members to handle business activities in the recession period. On the other side, it produces negative image front of people and staff members which create impact on sales and market share in the market.
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3.2 Justifying selection of strategies in terms of suitability, feasibility and acceptability There are many reasons to select market entry strategies which can aid to expand the business of Tata Steel Europe. Mainly, management of corporation should select licensing method to expand its business in market of UK. Furthermore, justification of this strategy are represented as follows. Suitability: Generally, licensing method is suitable for Management of Tata Steel Europe because corporation already is operating in the European market. In addition to this, organization has effective experience to manage its operations in international market in a appropriate manner (Johnston and Bate,
2013). Furthermore,
corporation has many resources which can aid to assess the foreign manufacturing sector to increase its sales in the United Kingdom.
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In addition to this, employees of organization is also capable to make effective strategies which contribute effectively to establish its business in United Kingdom (Ward and Peppard, 2016). Feasibility: Mainly, Licensing method is also feasible for Tata Steel Europe due to its existence in the European market. In addition to this, brand value and image can help the organization to increase its sales in UK market. This process can aid the corporation to its complete goals and objectives in present manufacturing sector in a appropriate manner. In addition to this, Tata Steel Europe has appropriate knowledge about rule and regulation of United Kingdom due to presence in European market from several years (Burgenmeie and Mucchielli, 2013). This efforts can provide better flexibility to enter in UK market through licensing method effectively. Acceptability: Licensing method is acceptable for management of Tata Steel Europe because financial condition of organization is effective. So firm does not need any partner to expand business operations in manufacturing sector. Due to this reason, Tata Steel Europe can implement licensing strategy in the United Kingdom. Along with this, corporation has effective knowledge regarding steel manufacturing sector which aid to increase its sales and revenues (Swayne, Duncan and Ginter, 2012). 4.1 Assessing roles and responsibilities of personnel in Tata Steel Europe There are many roles and responsibilities of personnel like marketing, human resource and financial manager regarding strategy implementation in United Kingdom. Some of them are described below in the points. Marketing managers: Marketing managers help Tata Steel Europe to accomplish roles and responsibilities in a systematic manner. For example, They aid the organization to give better report in respect of different marketing factors such as need and requirements of corporate in the market. In addition to this, these factors support the management of Tata Steel Europe to execute the market entry strategies in the present sector (Ferrell and Hartline, 2010). Further, they also aid in making promotional, customer service as well as competitive strategies in the manufacturing sector of United Kingdom. Finance managers: Financial managers are also major part for execution of strategies in the market. For example, they are responsible for giving proper financial information such as insurance policies, investment, arrangement of monetary funds through loans and retained earnings as well as knowledge about taxes, tariffs in present sector (Ohnson and et.al .,2013). Other than this, they also prepare different type of statements such as debt-equity, cash reserve ratios and other income statement for board directors of Tata Steel Europe. Get best Marketing Assignment Help by the dedicated writers of Assignment Desk at very less price to score higher grades.
Human resource mangers: Generally, HR manager contribute effectively for management of Tata Steel Europe at the workplace. Along with this, they are associated regarding implementation of strategies because they give appropriate human and other resources to manage its operations. For this, they hire and train employees which aid to enhance increase probability of success in respect of strategy implementation in the market (Malerba and et.al., 2015). In addition to this, these activities help Top level directors of Tata Steel Europe to implement strategies strategies in a appropriate manner. 4.2 Estimating resource requirements to implement new strategy for Tata Steel Europe Corporation needs many human, financial as well as technological resources to implement market entry strategy in the United Kingdom. Human resource level: management of Tata Steel Europe need different kind of human resources such as higher, middle and operational managers, IT employees as well as international experts to execute licensing strategy in the UK (Taylor and et.al., 2013). For example, top level managers aids Tata Steel Europe to make strategy and rules and regulations for market entry strategies at the workplace. In addition to this, Middle and operational level managers supports in implementing proper business activities which are essential for Tata Steel Europe at the workplace (Johnston and Bate, 2013). Other than this, international experts and legal advisers contribute effectively to give knowledge about global barriers, taxes and tariffs which aids in designing proper business approaches to top level managers. Along with this, IT employees of Tata Steel Europe also provides their effective efforts to handle IT activities which aids in executing licensing strategy in United Kingdom (Yudin and et.al., 2014). Technological level: Tata Steel Europe needs various kind of technological resources to execute licensing strategy in the present sector. For example,
management of corporation can consider ERP
(Enterprises resource planning) to handle its technological activities at the workplace. This tool play important role for Tata Steel Europe to extract appropriate information of market which aids to take better decision in the market. In addition to this, it can support to enhance efficiency of corporation which can give better aid to implement market entry strategy in United Kingdom (Longoni and Cagliano, 2015). Financial level: Management of corporation needs financial resources like monetary funds for investment plan in the market. For example, financial managers of Tata Steel Europe can handle its monetary funds by unused fixed assets, taking loan from bank and selling scrap which can aid to execute licensing strategy in the UK Get best Marketing Assignment Help by the dedicated writers of Assignment Desk at very less price to score higher grades.
4.3 Contribution of smart targets to achievement of strategy implementation SMART targets are being developed by business with the motive to enhance market performance of the business. Further, it provides proper direction to the company and in turn challenges prevailing in the business environment can be tackled easily. By setting proper targets it is possible for Tata steel to implement the strategy of market entry in appropriate manner and this can surely bring favorable results for enterprise in the market (Alsudiri, Al-Karaghouli and Eldabi, 2013).
SMART objectives being developed by Tata steel are as follows: Specific: The main objective being developed by company is to enhance profitability level along with market share in the new market by 15%. This objective is linked with overall performance of the business and by accomplishing this aim it is possible to become market leader (Veiga and Franco, 2015). Measurable: In order to measure accomplishment of this objective business will compare present profitability level with the past. Attainable: This aim can be easily accomplished by Tata steel as company is quite strong and through appropriate marketing along with other strategies company can attain this objective (Braun, Latham and Porschitz, 2016). Realistic: Tata steel carries out all the operations on wider basis and business posses capability to implement large number of strategies. So, to accomplish this objective is quite realistic for Tata steel Timely: Around time period of 1 year is required to accomplish this objective. Firstly Tata steel is required to understand the specific requirement of its target and on the basis of same business is required to indulge into practices of product development (Jenkins and Williamson, 2015). Therefore, in this way the SMART objectives being developed can assist Tata steel in performing better where organization can efficiently implement the new strategy and it can lead to favorable outcomes for business in the market such as improvement in overall performance.
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CONCLUSION From the report, it is found that mission, vision, goals and objectives of Tata Steel Europe aids the organization to make better strategic plan at the workplace. Furthermore, different factors supports the corporation to formulate strategies in a systematic manner. Organizational audit guides the Tata Steel Europe to analyses strategic positioning effectively at the workplace. In addition to this, Significance of stakeholder analysis aids the organization to make new strategic strategies in better ways. Environment and legal factors affect the Tata Steel Europe to establish its business in the United Kingdom. Furthermore market entry strategies play important role for organization to expand its business. Roles and responsibilities of marketing managers aids the corporation to implement licensing strategies in the Britain. Financial, technological as well as human resource level requirements helps the organization to execute strategy effectively. It can be concluded that SMART targets contribute effectively for management of Tata Steel Europe to implement present strategy in a appropriate manner.
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