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SWOT Analysis BSRM Steels LTD Bangladesh
SWOT Analysis BSRM Steels LTD Bangladesh
Core competencies
Capabilities
Organizational culture
Strength or a weakness?
Often, companys internal factors are seen as both, strengths and weaknesses, at the same time. It
is also hard to tell if a characteristic is strength (weakness) or not. For example, firms
organizational structure can be strength, a weakness or neither!
Opportunity or threat?
Most external changes can represent both opportunities and threats. For example, exchange rates
may increase or reduce the profits gained from exports. This depends on the exchange rate,
which may rise (opportunity) or fall (threat) against the home country currency. The organization
can only guess the outcome of the change and count on analysts forecasts. In such cases, when
organization cannot identify if the external factor will affect it positively or negatively, it should
gather unbiased and reliable information from the external sources and make the best possible
judgment.
However As a Post graduate Student I found the following Strength, Weakness, Strength or Opportunities:
STRENGTH:
i.
Market leader:
BSRM is the market leader in the steel Market of Bangladesh. They occupy 12 % of the total steels market.
ii.
It has been working consistently in steel production sector. So it has achieved great competitive skills. It has the ability to
face strong competition.
iii.
Reliability:
Be the preferred business partner of the customer and suppliers by offering quality products; providing
best and timely service before and after the business transaction.
iv.
BSRM employees are one of themajor assets of the company. The employees of BSRM have a
strong sense of
commitment towards organization and also feel proud and a sense of belongingtowards BSRM.
The strong culture of BSRM is the main reason behind this strength.
v.
Strong Marketing Lineup:
BSRM ha s de vel oped a sound a nd effe ctive ma rketi ng policy to share knowledge about their
products with design engineers, thus creatingmore awareness in the minds of the customers.
vi.
BSRM has appointed more than 300 dealersall over the country so that people can get BSRM products
within a reasonable time.Besi de s this the y ha ve se ver al sale s and suppl y de pots i n Dhaka,
Co mill a, Borga, Shylet, and Khulna.
vii.
The BSRM Xtr e me 500wproj ect has bee n conceptualized by the German consultants
Badische Stahl Engineering (BSE) andthe complete plant and machineries have been supplied by
Danieli Group, Italy oneof the three largest suppliers of equipments and plants in metal industry
worldwide. Soit has the latest and Modern equipment and Technology.
viii.
Backward-linkage industry:
making plant in Bangladesh under thename of BSRM Iron & Steel Co Ltd (BISCO).BSRM decided to take over the
ownershipof BI SCO thr ough acquisit ion of 95% of its e ntire sha re holdings fr om their
e xisti ng shareholders.
WEAKNESS
i.
High interest rates decline profit:
BSRM ha s a la rge lone fr om various bank a ndfina nci al institutes of Bangl ade sh. So
the int ere st rat es drop down t he profit s of the company.
ii.
Power Crises:
i.
Market Dominance
: As BSRM occ up y 12% of the st eel ma r ke t of Bangla des h and also they are the market
leader. So there is a good probability that they can dominate the ma rket. Moreover t he y are
incre asing thei r production fro m 375, 000 M.Tons to 500,000. After the expansion they can occupy 20 % of
the local market.
ii.
International Scope:
As BSRM is inter nati onall y renowne d co mpa n y so its ha ve s trong possibility to export steels product
in near future.
iii.
BSRM has a greater opportunity of profit as the demand for the 500-grade rods increasing day by day in the local market.
iv.
Organizational Goal
: The goal of the Company is to make life of the people secured a nd safe b y pr ovi ding qualit y
pr oduct s at a c hea per price a nd to be a part ner in the nati on buildi ng ac tiviti es. As
BSRM is the ma rket leader t he y ha ve to opport unit y to fulfill there organizational goal.
THREATS
i.
New competitors:
I n r e c e n t d a y s s o m e n e w c o m p a n i e s h a v e s t a r t e d t h e i r s t e e l production.
Among them AKS (Abul Khayer Steel) is one of them. They are targeting to produce 800,000 M.Tons of steel per
year. But now they are producing only 200,000M.Tons.
ii.
Economic crisis:
World recession and the socio- political situation that prevailed in2008 in Bangladesh stagnated all
development works in the country. Then the sales of steel decrease to half due to recession.
iii.
Growing Competition:
All the bi g st eel producers of Ba ngl adesh wi sh to incre ase their production capacity. If they
increase the production capacity then their production cost will decline. So competition will also increase in the steel
market.
iv.
Labor Unions:
v.
Power Crisis:
Power crisis is increasing day by day and thats why the production of steel in a decline position. For example Abul
Khayer only can produce one forth of their production capacity due to gas crisis.