“How Should Posco-Ippc Increase Its Footprint in the Automobile Segment?
| Concern Address IA| “How should POSCO-IPPC bud its symptom in the Automobile portion? | Candidate Name: Amrit Shah Session no. 002798011 School: Symbiosis Interpolitical Nurture Exploration Proposal: Executive Summary: 199 say Word Count: 1977| | Acknowledgements: I would relish to propound and thank: * Mrs.
Vaishali Phatak for her food and succor in ancillary me after a while this communication * Mr. Bharat Indu Bhattacharya- Electric Steel Dept. Overseer of POSCO-IPPC, Pvt. Limited, Pune - for his gift to the communication and his duration for the confronting. * Mr. Joseph Joe- Automobile Steel Dept. Overseer of POSCO-IPPC, Pvt. Limited, Pune- for his gift to the communication and his duration for the confronting. * Mr. Jacy Kim- Notorious Overseer of POSCO-IPPC, Pvt. Limited, Pune- for allowing me to do this communication on the sodality and for providing control and succor throughout.
Executive Resolution POSCO-IPPC, a steel distributor for the Korean sodality POSCO move guiles encircling firing themselves attachedly in the Indian Steel Activity dedicated that they are oppositeness consumer quantitys from their customers in the Automobile sector. As such this Nursing Dissertation irritates the inquiry, ““How should POSCO-IPPC bud its symptom in the Automobile portion? ” Primarily, a exploration inquiry exaltedlights the rationale, hypothetical framework, force guile and modeology applied and approvely constraints in echoing the inquiry.
An Introduction illuminates us encircling the setting and basic narrative kindred to the sodality itself and of alliance to the inquiry. Findings and segregation is written on the reposeation of primitive exploration implied of multiple confrontings conducted after a while irrelative aggravateseers and induced exploration implied of mails touching their expenses aggravate the advenient prospects by the automobile sector aggravateseer that acted as a catalyst in evaluating using twain financial (magnitude utilization and sentence tree) and non-financial modes(SWOT & PEST).
The communication comprehensively focuses on the quantity of raw esthetic which POSCO-IPPC is popularly oppositeness due to which they are not conducive to confront the increasing insist. Installed on the exploration conducted, it is repose that POSCO-IPPC has two libertys to aggravatecome this quantity. One that it could ask POSCO, Korea to minister them after a while ocean raw esthetic and the other that it could ask POSCO, Orissa, a manufacturing individual to minister them after a while raw esthetic. These libertys move been evaluated care in desire the stipulations to furnish out the most permissible liberty to imsegregate a impetuous omission.
Possible solutions are discussed and the omission suggests that POSCO-IPPC in enjoin to oceantain itself in the Indian Steel Traffic scarcitys to bud its output and using the financial and non-financial techniques discussed and the best viab1e liberty would be to bud its raw esthetic minister from POSCO, Korea. Contents Acknowledgements…………………………………………………………………………2 Executive Summary………………………………………………………………………... 3 Exploration Proposal………………………………………………………………………….. Introduction……………………………………………………………………………… 8 Procedure/ Methodology………………………………………………………………… 9 Ocean Results and Finding ……………………………………………………………. … 10 Analysis/Evaluation……………………………………………………………………… 12 Conclusions and Recommendations……………………………………………………… 16 Bibliography……………………………………………………………………………… 17 Appendix…………………………………………………………………………………… 18 Exploration Proposal Exploration Inquiry How to bud POSCO-IPPC symptom in the Automobile portion? Rationale
POSCO-IPPC, a disposal consummate of Korea’s POSCO Steel Company, is a newbie in the Indian Steel traffic; they move a preoccupancy in the Electric steel traffic and they are undergoing quantitys in the Automobile sector so they should toil on capturing elapsed consumers in the Automobile sector so that they are conducive to stabilize themselves. The exploration inquiry focuses on the ways POSCO-IPPC should engage to set its symptom in the automobile portion. Hypothetical Framework
My guile is to economize twain financial and non-financial techniques to evaluate the quantitys incurred by the address so that they are conducive to attachedly fir themselves in the automobile sector. The communication conciliate analyse the quantitys faced, thus it conciliate try to toil-out it using the financial techniques of Magnitude Utilisation and Sentence Tree and non-financial techniques of SWOT and PEST which conciliate analyse the other quantitys, opportunities and threats. Key Areas of Syllabus Individual 4 – Operations address Decisions * Introducing Operations Address Improving operational efficiency: Capacity, Scale of genesis Individual 6 – Numereprimand techniques for concern studies * Instruction for sentence making Primitive Research: * Meeting after a while Electronic Steel aggravateseer Mr. Sharad Indu Bhattacharya in-reference-to the sodality narrative, sodality stipulation, traffic and other notorious aspects encircling the sodality’s toiling. * Meeting after a while Automobile Steel aggravateseer Mr. Joseph Joe in-reference-to the traffic stats in Automobile sector, drawbacks, quantitys and approvely implications so as to discern their traffic in the Automobile sector.
Secondary Research: * Some Instruction and the register of customers of POSCO-IPPC, Pune, India accepted through mail from Mr. Joseph. * Other setting narrative of POSCO, Korea used and other facts and figures were charmed from the internet. Likely Problems:| Solutions:| Managers were not conducive to discern the penny aspect of the confronting producting in very conglomereprimand answers. | Managers were asked inquirys in a very cramped perspective which crampeded down to exact elements. | Responses from the aggravateseers were kindred to simply their departments, unconducive to imsegregate a notorious aspect. Requested them to get instruction from other aggravateseers as polite-behaved-mannered. Paltry confronting after a while a employee and the genesis aggravateseer. | Scant entrance to constructive instruction on the customers and the sodality as the locations are very far and element instruction is private. | Acknowledged in the omission. | Financial Postulates was scant to a vast size as it was a new sodality and Postulates was yet not published. | Estimates move been charmed and where estimates could not be charmed, it has been descriptive in say. | | | Force Plan: Date| Task | 18th August, 2008. | Talked on phone after a while Mr.
Jacy Kim who agreed to let me do my contrivance on the sodality. | 20th August, 2008. | Conciliate siege an Meeting after a while Mr. Bharat Indu BhattacharyaWill siege an confronting of Mr. Joseph Joe Exploration Inquiry mouldulated. | 22nd August, 2008. | Planning conciliate be executed as to the way this essay scarcitys to go encircling. Introduction and Exploration Proposal conciliate be written. | 30th August, 2008. | Postulates Collection should be executed. | 5th September, 2009. | Ocean products and furnishings conciliate be written down installed on the instruction gathered from Mr. Bharat Indu Bhattacharya and Mr. Joseph Joe aggravate the days. 13th September, 2009. | Segregation of the postulates conciliate be executed. | 14th September, 2009. | Techniques of Magnitude Utilization and Sentence Tree conciliate be applied. Conciliate bring-encircling a SWOT and PEST segregation. Segregation to be completed. | 15th January, 2009. | Recommendations written. Appendices made and resolute. | 16th January, 2009. | Executive resolution, gratified page, Force guile| Introduction: POSCO-India Pune Processing Consummate Co. Ltd. , fired in August 2006 but launched its wholesale disposal in 2006, and is a extremely true by all the moderationingant companies of India for its vast sort of its steel.
Although life a newcomer in the Indian Steel Market, it has set its symptom as a Sort and commencement installed sodality. POSCO-IPPC is a spiral consummate for the Korean Steel monster POSCO Steel Scant which is a global principle of harsh steel and ripe steel commodities. POSCO-IPPC concerned an siege of 15 favorite dollars. It is an defiant sodality of its own as it is a junction speculation of POSCO (pursuit 65% of divides. ) and LG (pursuit 35% of divides. ) POSCO-IPPC is a mannering individual which is concentratively managed. It is a manneror-cum-distributor of steel in the electronic and automobile portion.
It simply plays a paltry role of slitting and shearing of the raw esthetic as a manneror. Its output is 10,000 metric tons per month after a while an annual turnaggravate of 320 Crores in the anterior financial year. It employs 120 vulgar as its toiling staff out of which 60 are filled as payroll toilers and other 60 are in mould. After a while the moderationing appraises and duties of steel and life a newbie in the Indian Steel traffic, it is oppositeness emulation from other distributors relish ESSAR, TATA STEEL, JINDAL and other Chinese and Russian companies.
In the Automobile sector, there are numerous quantitys inventd due to its exalted appraise and failure of output compared to that in the electronic steel sector for it hinders preoccupancy in the sector for numerous of its fruits. As the address is extremely equipped in its elements of genesis, it is explorationing on ways to act the Automobile traffic in enjoin to attachedly fir itself in the state. Therefore this communication focuses on- “How should POSCO-IPPC bud its symptom in the Automobile portion? ” Procedure/Methodology The Initial exploration conceived a constructive confronting encircling the sodality and its tenures after a while Mr.
Bhattacharya-Electronic Steel aggravateseer. Another confronting was after a while the Automobile Steel aggravateseer- Mr. Joseph Joe encircling the Automobile sector implied of the argument aggravate the quantity mentioned in the exploration inquiry. Underlining the moderationingant aspects in the confronting, the inquirys focused on POSCO-IPPC’s ability, tenures in the traffic, inner and palpcogent elements concerned for and athwart genesis (which inventd the PEST, SWOT segregation and instruction for the segregation), and financial stipulation and estimations advising financial techniques to be applied ( Magnitude utilization and Sentence Tree. The induced exploration producted in analyzing of POSCO Steel’s instruction and entranceing other communications, activity statistics, traffic instruction and postulates via numerous internet sites. This succored in the products and furnishings, in abilityening the instruction availconducive and recommendations and omissions. It should be famous however, that financial postulates calm is installed upon twain ‘actual’ and ‘estimates’, which scarcity degree validation. In favoringation, the nerve of this communication may be influenced by the presumcogent questionivity of some financial postulates dedicated privately progenys.
Main products and Findings POSCO-IPPC Private Scant is a watching of POSCO, the universe's fourth comprehensivest steel principle and one of the most competitive steel companies (World Steel Dynamics 2006) whose fruits are shipped to aggravate 60 countries encircling the globe. Aside from this individual, POSCO has besides invested 12 billion USD in Orissa which is contemplated to yield an output of 12 favorite ton per annum by 2010. Since 1990, elapsed than Rs 19,000 crores (US$ 4470. 58 favorite) has been invested in the steel activity of India and there is an increasing deviate in its genesis. See Figure 1) The auto constituent sector has besides posted symbolical bud of 20 per cent in 2003-04, to consummate a sales turnaggravate of Rs. 30,640 crore (US$ 6. 7 billion)(See Figure 2). Such opportunities in the automobile sector and the Indian husbanding can succor POSCO-IPPC to fir itself attachedly. In stipulations of popular traffic collocation, POSCO-IPPC brands itself as a innate provider of electric steel in some of the areas in India for not numerous of the companies move explored the electric steel traffic.
Being a newcomer, it guiles to colonize the automobile steel traffic, where it quiet hasn’t managed to set its bottom attachedly. The sodality is installed upon true policies and elements which numerous of the customers are unconducive to bear after a while. POSCO is a global player and it furnish and moldings steel all aggravate the universe. It exports steel from South Korea at an interpolitical appraise which is comparatively exalted in Indian vogue so this dissimilitude betwixt the appraises, controls to a exalted appraise pregnant by the sodality.
Due to the exalted appraise, POSCO attached to put a segregateicular appraise (Rs 49000-self-possessed rolled steel) to fit in the traffic but in modify for inferior minister of steel so this subjugates the minister rule of POSCO-IPPC. POSCO-IPPC is simply a disposal consummate and does not molding. It is a traffic-oriented attached and supervenes the concept of superiority customization for it invents the output oceantaining to irrelative customers scarcity. It slits and shears steel depending upon the customer’s insufficiency. Its ocean customers are Crompton, LG and Suzlon in the electrics sector and Tata and Bajaj in the automobile sector.
It uses devise genesis to yield an output of 10,000 metric tons per year where 1. 5% of the raw-esthetic is worn in slitting and shearing. The insist for their steel is a lot exalteder than their output and their magnitude is besides exalteder (35,000 metric tons/year) but the failure of raw-esthetic limits them, due to the segregateicular appraise-low minister element. Instead of creating elapsed output, their utensils are doing job toil for other competitors relish JINDAL, ESSAR, etc. of 5000 metric tons monthly. Highlighting the inaptitude suffered in the predicament of TATA MOTORS Pvt.
Limited Whole Requirement of TATA | 30,000 (Demand going up by 7-10% annually) | TATA’s insist from POSCO (for exalted sort steel)| 5000-7000| POSCO-IPPC’s Minister to TATA| 2000-2500 (Rest to be provided to other customers. )| POSCO-IPPC’s Self-possessed Rolled Steel Appraise at the traffic | Rs. 53-55000| TATA’s pay appraise to POSCO | Rs. 48000| | | | | (All figures are in metric tons/month) Analysis/Evaluation: The evaluation of irrelative quantitys which purpose oppositions in dealing after a while other companies conciliate be executed after a while the succor of true financial and non-financial techniques. Financial Analysis:
I. Magnitude Utilization After a while the aspect of utilizing its consummate to the fullest, POSCO-IPPC has two pathways in enjoin to minister elapsed in the steel traffic and set its bottom impetuously: a) acquiring elapsed raw-materials from POSCO, Korea. b) Purchasing of raw-esthetic from POSCO manufacturing individual at Orissa, India. Thus, we conciliate irritate the introduce scenario of magnitude utilization in compared after a while the two libertys mentioned balancehead. Introduce Magnitude Utilization scenario: The consummate utilization is fitted in percentage and the mouldulae used for it is dedicated below: OutputMaximum magnitude? 00 Popular Output: 10000 metric tons/ month. Ultimatum Capacity: 11250 metric tons/ month. Magnitude Utilization = 1000011250? 100 = 88. 89% Liberty a): acquiring elapsed raw-materials from POSCO, Korea: Estimated output: 11250 metric tons/ month Ultimatum magnitude: 11250 metric tons/ month Magnitude Utilization = 1125011250? 100 = 100% Liberty b): Purchasing of raw-esthetic from POSCO manufacturing bough at Orissa in India: Estimated Output: 11250 metric tons/ month Ultimatum Capacity: 11250 metric tons/ month Magnitude Utilization = 1125011250? 100 = 100% II. Sentence Tree:
Utilizing this admission for twain the libertys and other sentences to be made by the sodality are evaluated and financially viconducive sentences are suggested. (Figure 1) (All prevalence appraises are in Indian Rupees) Key: Sentence clear Chance node Calculations: (611. 105mn ? 0. 6) + (466. 07mn ? 0. 4) - 500mn = 53. 091mn INR (572. 88 ? 0. 3) + (491. 04 ? 0. 7) – 500mn = 15. 592mn INR Non-financial segregation: India has bybygone through a considerconducive veer in the genesis and decay of Steel in the elapsed 10 years.
Driven a booming husbanding and accompanying insist razes, decay of steel has amplifyed by 12. 5 per cent during the accountinal three years it has been foretaste that the presumcogent steel use top in India conciliate bud by 11. 8 per cent in 2008. POSCO-IPPC has vast opportunities to set their bottom attachedly in the Automobile sector. The POSCO steel guilet is India’s unique comprehensivest alien siege contrivance eternally. For its segregate, the Indian legislation is cutting to boost its steel genesis and induce elapsed alien siege through such a gainful segregatenership.
But it besides may control to limiting of alien ownership and impression of protectionism to checkmate alien siege from liberal its razes. Technology raze in POSCO-IPPC is of exalted holdards and succors them after a while oceantaining the sort. The utensils brought in are moderationinged but India is a amplifying county and it has true quantitys of electricity which products in certain rule-cuts causing oppositions in mannering of steel. These admonish-shedding continuances are repeatedly practised by the use of generators but these generators argue to be exalted-priced.
The steel life moderationinged is unsupposcogent by any veer in the alien modify policies and any legislation/fiscal policies which may prewatch them. POSCO-IPPC life a new-comer may move threatened by the interway of multi-national companies as it controls to ocean emulation and elapsed actation of instrument. Conclusions and Recommendations: Availconducive address’s sight on the opportunities to fir themselves in the Steel Industry, it does answer that the address should exploration this degree by the succor of a traffic exploration and exploration on all of the customer scarcitys.
Analysing the written communication on the reposeation of the postulates provided, it answers that POSCO-IPPC’s simply opposition is its limitation of minister which if toil-outd conciliate toil-out numerous of their other quantitys. Using Magnitude Utilisation and Sentence tree, it was silent that if ultimatum magnitude utilisation sieges allay, it conciliate subjugate the appraise; bud the output; increasing the output conciliate control to crave account alliances after a while the customers; it conciliate mingle ultimatum utilisation of instrument. Ultimatum magnitude utilisation is simply approvely after a while the bud in output which can be simply executed by bud in the minister of steel.
There had been two libertys discussed after a while the succor of sentence tree to contemplate for the best and cheapest way to bud the minister by deciding upon the commencement. The segregation showed that purchasing from POSCO, Korea at the segregateicular appraise is elapsed profitconducive (53. 091mn INR) but this is simply approvely if POSCO, Korea agrees to minister them at the segregateicular appraise. The succor approvely liberty was from purchasing steel from the other bough of POSCO at Orissa, India but this would argue hither profitconducive (15. 592mn INR) as they would retail it at the retailing appraise in enjoin to snatch their income.
Other elements which watch to food POSCO-IPPC to set its bottom in the Automobile sector conceive in the non-financial segregation: growing Indian husbanding and its Steel Industry; Legislation food; Vast Sort Steel; later technology used after a while explicit disciplinary progenys which bring-abouts them a good-natured-natured-natured supplier. Recommendations: As such, my recommendations would be: * Undersiege degree exploration in stipulations of favoring of customer requirements and quantitys, by performing a traffic exploration and exploration on the clients, as numerous of my furnishings are collective to the sodality’s familiarity. Elapsed accurately designate the explicit affection of the requires and income upon purchasing steel from the commencements irritated in the written communication. * Embark upon liberal exploration as to pursuit other ways to bud the output and besides craving POSCO, Korea to minister elapsed at the segregateicular appraise. However, my segregation is scant; it does not caggravate all the aspects of this question due to the reposeraints of the postulates provided. The exploration was not elapsed liberal bepurpose the individual was far abroad and numerous confrontings were not approvely after a while the officials as this would intersect in their toil .
With simply two personnel confrontinged, a ramble perspective from other departments must besides be obtained . The communication is a allusion esthetic, the exploration can be elapsed liberal and fair products can be consummated if entrance to elapsed postulates was approvely. The Communication is quiet in progress; there are numerous progenys which scarcity to be toil-outd which can be executed after a while the succor of the recommendations and elapsed entrance. Bibliography Books: AS Raze and A raze Concern Studies, Peter Simpson, Cambridge University Press, Cambridge, 2002, Websites: http://www. stratfor. com/analysis/india_poscos_steel_investment_challenge Steel, India Brand Equity Fund, http://www. bef. org/industry/steel. aspx India Steel Industry, Husbanding Watch, http://www. husbandingwatch. com/india-steel-industry/ India Automobile Industry, Husbanding Watch, http://www. husbandingwatch. com/business-and-economy/automobile-industry. html Corporeprimand aggravateview, POSCO-INDIA, http://posco-india. com/website/company/corporate-overview. htm APPENDIX: * Appendix 1: Meeting Transcript after a while Mr. Bharat Indu BhattaCharya * Appendix 1: Meeting Transcript after a while Mr. Joseph Joe * Appendix 3: SWOT Segregation * Appendix 4: PEST Segregation * Appendix 5: Graphs * Appendix 6: Mail from Mr. Joseph Joe Appendix 1: Meeting Transcript after a while Mr.
Bharat Indu Bhatta Charya, Electric Steel Dept. Overseer of POSCO-IPPC, Pvt. Limited, Pune 1) Good-natured Afternoon, Could you gladden illuminate us encircling your sodality? * Good-natured Afternoon, POSCO-IPPC holds for POSCO – India Pune Processing Unit. We are situated in the Talegaon Horticulture and Industrial Park in the dist. Of Pune. POSCO-IPPC is a spiral consummate as notorious by its creator sodality POSCO, which is a steel moldingr monster in South Korea. It is the fourth comprehensivest principle of steel in the universe and its distributors and manufacturing individuals are circulate all aggravate the universe.
From the set-on-foot of this sodality to the introduce date, POSCO has led to superiorityive degreements in the socio-economic stipulation of South Korea. Coming tail to POSCO’s siege in India, this is POSCO’s third siege, the other two life in Delhi and Orissa. Although POSCO is POSCO-IPPC’s ocean investor but it is an defiant sodality which is concentratively managed. POSCO entering in a new traffic guilened to fir this mannering individual as a junction speculation after a while LG International, where POSCO has 65% of divides and LG interpolitical owns the repose 35%.
A whole 15 favorite $ was invested in this contrivance and it wholesale mannering launched in 2006. 2) Can you emphasize elapsed on your wholesale mannering and the toiling of this individual? * POSCO-IPPC manneres the raw esthetic which comes from POSCO, South Korea and distributes it to the customers. By mannering, we moderation the steel which comes from POSCO is slatted and sheared according to the customers scarcity. We select our steel in the mould of spirals, this is one close for our life notorious as spiral consummate, then the spiral is put in a utensil which slits and shears it installed on the dimensions set.
This is then packed and sent to the relative customers. Our moderationingant customers are Crompton, LG, Suzlon, TATA and Bajaj. Our sodality yields output for electric steel as polite-behaved-mannered-mannered as automobile steel. Although in the electric steel traffic, we hinder a preoccupancy but in automobile, we are yet to spolite our admission. These are the irrelative types of steel we yield: Electric Steel * CRGNO- Self-possessed Rolled Grain Oriented Steel * CRNO- Self-possessed Rolled Non-Grained Steel Automobile Steel * HR ; PO- Hot Rolled and Pickled ; Oiled Steel Self-possessed Rolled Steel * Stainhither Steel White Commodities * Electro-Galvanised Steel We move 120 vulgar as staff, out of which 60 are on payroll and 60 are on mould. We supervene the devise genesis for our mannering individual. Our output is 10,000 metric tons / month after a while an annual turnaggravate of 320 Crores as of accountinal year. The raw esthetic which comes to us, we add a appraise favoringation of 10% and retail it in the traffic. Our magnitude to yield is 135,000 metric tons per annum where as its output is low bepurpose of the failure of raw esthetic so the magnitude utilization is not up to the symptom.
So to mingle our other utensilry, we do job toil for other companies of 5000 metric tons. 3) Can you gladden judge me encircling the aggravateseers of this sodality? * The aggravateseers at all the innate posts in the sodality are all from South Korea and they move been assigned by POSCO for a urban continuance of years for a ripe set-on-foot in the Indian Steel traffic. These are very skilled and are explicit superveneers of organization and sort. The toil at POSCO-IPPC is fruitful and advancing due to these aggravateseers. These are: * Gil Ho Bang – Managing Director Jongyeol Her – Notorious Overseer * Jung Chule Kim – Notorious Overseer * Woon Tae Jung – Notorious Overseer 4) Can you gladden judge us encircling the difficulties you are oppositeness as a new sodality in the Indian Steel traffic? * We move a preoccupancy numerous in the traffic for Electric steel so we don’t move any quantitys in that sector but in the automobile sector, our competitors are polite-behaved-mannered-mannered fired and they move a far ocean traffic divide than POSCO-IPPC in the traffic so it invents influence on us to invent our fruit amelioreprimand than theirs to cling in the traffic.
Our competitors: TATA STEEL, JINDAL, ESSAR, ISPAT and other Chinese and Russian companies. The two ocean difficulties which our sodality is oppositeness are: * There has been a Star Rating which the Indian Legislation has launched on the electric appliances. This progeny of BAE Star Rating on the decay of Electric Steel. * The Automobile sector in India is booming and has a lot of object so POSCO-IPPC is intricate to bud its symptom in the Automobile steel portion. There is a lot of insist for POSCO’s sort steel in the Automobile sector. 5) What is your SWOT? SWOT Ability * Any downfalls can be fooded by POSCO-Distribution of sort steel - Inherits a sort indicate in the traffic from POSCO- Maintains explicit disciplinary razes- Traffic controler in Electric Steel- Insist for its sort steel in the Automobile sector-Machinery is very tardy and the labour filled are few but skilled. Weaknesses * Not ample raw esthetics-Is not yet conducive to attached its hold in the Steel traffic-The exalted appraise of their fruit due to the vogue of Korea life elapsed ruleful - Language/ Cultural gap betwixt India and Korea. Opportunities To bud its output and confront the exalted insist - Failure of exalted sort steel in the Automobile traffic imsize them a big turn - India inspiriting alien sieges- Increasing Interpolitical dealing betwixt the countries- Reprimand of exalted economic and the state's husbanding gradually increasing- Particular Poor Appraise for the steel. Threats * Appraise of the raw esthetic is extremely relative on the alien modify - POSCO pursuit a paltry divide in the traffic is comparatively paltryer than its multi-national countersize -Low output due to failure of raw esthetics which may product in the damage of customers and a crave account alliance.
Appendix 2: Meeting Transcript after a while Mr. Joseph Joe, Automobile Steel Dept. Overseer of POSCO-IPPC, Pvt. Limited, Pune 1) Good-natured Afternoon, What can you judge me encircling POSCO-IPPC in alliance to the Automobile traffic? Good-natured Afternoon, POSCO-IPPC is a watching of POSCO which as you comprehend is a global principle and distributor of exalted sort steel. So as its creator sodality, POSCO-IPPC is besides notorious for its exalted sort in the Indian Steel traffic.
Automobile Sodality requires exalted sort steel for the chassis segregates of the automobile, usually such segregates are moderationinged or commute sort steel is bought so due to the failure of exalted sort steel principles in India, there is a lot of insist for the emerging POSCO-IPPC’s Steel. Though POSCO-IPPC has so numerous opportunities to set itself attachedly in the traffic, it has numerous oppositions checkmateing it from doing so. 2) Can you gladdens dialogue encircling the oppositions in paltry elapsed element? * There are numerous elements which sum up to close as a opposition for POSCO-IPPC.
The moderationingant ones are: * Exalted require of POSCO-IPPC’s Steel controls to a dissuasive to the Indian customers. * POSCO-IPPC is contemplateing for big customers so they are conducive to fir themselves by immediately targeting at the exalteder end. * POSCO-IPPC is explicit in its acquittal dates which are not favoured by all its customers for they scarcity a brink to allay their accounts. * Although the ocean quantity is the failure of raw esthetic from POSCO. Due to the Particular appraise-low minister stipulation betwixt POSCO and POSCO-IPPC, there is low minister of raw esthetics.
The insist is exalted for POSCO-IPPC’s steel but due to low output, it cannot amalgamate to eternallyy customer’s scarcitys. POSCO-IPPC is capconducive to yield elapsed output than its popular genesis but due to the failure of raw esthetic, it has to reposerain itself and do job genesis. * POSCO-IPPC’s customers wait-for a corresponding appraise and minister safety for three months which is not approvely for POSCO-IPPC as it moderationings its raw esthetic and it is question to alien modify policies and other legislation policies which pretends its appraise.
The minister safety cannot be dedicated due to failure of minister of raw esthetic. * Besides the defaulting of POSCO-IPPC’s appraise and bargaining to pay hither appraise by the customers is horrible POSCO-IPPC to spolite itself so immediately as they are losing on their income. * But aggravateall, the failure of raw esthetic is a big progeny and solving that progeny can toil-out numerous other quantitys kindred and in the way of duration, keen movements of dealing conciliate toil-out other quantitys too. 3) What can you judge encircling the segregateicular appraise-low minister stipulation? POSCO is a global player and it distributes its steel at a vulgar interpolitical appraise (Rs 59000) to the universe but as that reprimand is very exalted in stipulations of Indian vogue, it would not allay down in the Indian traffic so in enjoin to satiate its Indian customers, it subjugated the appraise and this is notorious as segregateicular appraise (Rs 45000). But as POSCO subjugated the reprimand for POSCO-IPPC, it simply did this for a stipulation and this stipulation was that POSCO-IPPC conciliate select simply a scant minister from POSCO, Korea. ) Since TATA is one of your moderationingant customers in the automobile portion, can you gladden put volatile on the sodality’s alliance after a while TATA? * Sure, TATA Motors is a moderationingant customer of ours and there is a considerconducive sum of dealings after a while TATA. Tata itself yields steel but is segregately relative on POSCO-IPPC for exalted sort steel for the chassis of their automobiles. They scarcity good-natured-natured-natured sort for the outward substance of the car for it to be attached and elapsed induceive for which they siege the food of POSCO-IPPC.
Tata requires 30,000 metric tons/month and the insist is going up by 7-10% / year. Tata insists 5000-7000 metric tons/month from POSCO-IPPC but it can simply minister 2000-2500 metric tons/month to TATA for out of its whole output, it besides scarcitys to minister to other customers in enjoin to reocean in the traffic and besides to stabilize it. The customers in the traffic are besides research for POSCO-IPPC’s steel relish Notorious Motors, Volkswagen and Fiat. For which TATA has fooded POSCO-IPPC in sending a craving to POSCO to minister elapsed steel.
POSCO-IPPC distributes self-possessed rolled steel in the notorious traffic at Rs 53-55000; the appraise keeps on indistinct, when-in-fact TATA gets it at Rs 48,000 (maximum. ) Thus, such elements are creating oppositions in transforce betwixt TATA and POSCO-IPPC. 5) What is your PEST? * PEST POLITICAL & LEGAL * Accessible Legislation encourages the alien siege- Veer in the accessible Legislation may product in veer in irrelative dealing policies - Indian Husbanding has shown relatively exalted razes of bud, arrestation and undeveloped bud. -Korea having a exalted raze of percentage of siege in the Indian traffic
Economical * Indian Husbanding is booming-Growth in its GDP and economic bud-Fluctuations in the modify reprimands -Social ties and contacts betwixt India and China is increasing-Expansion of a basic activity is constantly favoured- Sodality besides imsize moderationingance to ultimatum actation of instrument. Social * Opened a nurture for the conclusion of its toilers- Helped to amplify the village Talegaon -Increase in the magnitude of the individual, there conciliate be elapsed usurpation in the area-Adapt the Indian Culture-It believes in job satisfforce and motivation of its staff
Technical * POSCO-IPPC uses degree technology to manner its raw esthetic-High dependency on technology-India is a amplifying state where there is a vast quantity after a while electricity so admonish shedding sieges allay-Alternative mode to use generators during the duration of admonish shedding argues exalted-priced-Supply of diesel in such comprehensive sort argues to be a disclaiming element. Appendix 3: POSCO-IPPC SWOT Segregation Appendix 5 – Graphs Figure 1: Figure 2: Appendix 6: Mail from Joseph Joe This was a mail from Mr.
Joseph Joe giving out some instruction. Investment: 500 mn INR | | | | | | | | | | | | | Probability | | Difference| | Commencement Sodality | | Require Price/ metric ton | | Selling Price/ metric ton| | Quantity Purchased and sold| | Whole Revenue| | | | | | | | | | | | | | 0. 6| | Particular Price| POSCO, Korea| | Rs 45000| | Rs 55000| | 11111| | 611. 105 mn INR| 0. 4| | No Particular Price| POSCO, Korea| | Rs 59000| | Rs 55000| | 8474| | 466. 07 mn INR| 0. 3| | Wihtout O. H. E| POSCO, Orissa| | Rs 48,000| | Rs 55000| | 10416| | 572. 88 mn INR| 0. | | After a while O. H. E| | POSCO, Orissa| | Rs 56000| | Rs 55000| | 8928| | 491. 04 mn INR| -------------------------------------------- [ 2 ]. Refer to Appendix 1 – Meeting after a while Mr. Bhattacharya [ 3 ]. Refer to Appendix 1 – Meeting after a while Mr. Bhattacharya [ 4 ]. Refer to Appendix 1 – Meeting after a while Mr. Bhattacharya [ 5 ]. POSCO-INDIA, “corporeprimand aggravateview”, http://posco-india. com/website/company/corporate-overview. htm. (20th September, 2008. ) [ 6 ]. Refer to Appendix 5- Graphs [ 7 ]. Husbanding Watch, “India Steel Industry,” http://www. conomywatch. com/india-steel-industry/, (20th September, 2008. ) [ 8 ]. Husbanding Watch, “India Automobile Industry,” http://www. husbandingwatch. com/business-and-economy/automobile-industry. html, (23rd September, 2008. ) [ 9 ]. Refer to Appendix 5- Graphs [ 10 ]. Refer to Appendix 2 – Meeting after a while Mr. Joseph Joe [ 11 ]. Refer to Appendix 1 – Meeting after a while Mr. Bharat Indu Bhattacharya [ 12 ]. Refer to Appendix 2 – Meeting after a while Mr. Joseph Joe [ 13 ]. Refer to Appendix 1 - Meeting after a while Mr. Bharat Indu Bhattacharya [ 14 ].
Refer to Appendix 6 – Mail accepted from Mr. Joseph Joe [ 15 ]. India Brand Equity Fund, “Steel,” http://www. ibef. org/industry/steel. aspx (3rd August, 2008. ) [ 16 ]. SWOT Segregation [ 17 ]. PEST Segregation [ 18 ]. http://www. stratfor. com/analysis/india_poscos_steel_investment_challenge [ 19 ]. PEST Segregation [ 20 ]. SWOT Segregation [ 21 ]. PEST Segregation [ 22 ]. SWOT Segregation [ 23 ]. PEST Segregation [ 24 ]. http://www. husbandingwatch. com/business-and-economy/steel-industry. html [ 25 ]. http://www. husbandingwatch. com/business-and-economy/automobile-industry. html