KAMAL STEEL MILLS-SWOT analysis

SWOT Analysis

The following diagram shows how a SWOT analysis fits into a strategic situation analysis.

Situation Analysis
          / \           
Internal Analysis       External Analysis
/ \                  / \
Strengths   Weaknesses       Opportunities   Threats
|
SWOT Profile

Internal Analysis:

The internal analysis is a comprehensive evaluation of the internal environment's potential strengths and
weaknesses. Factors should be evaluated across the organization in areas such as:

 Company culture
 Company image
 Organizational structure
 Key staff
 Access to natural resources
 Position on the experience curve
 Operational efficiency
 Operational capacity
 Brand awareness
 Market share
 Financial resources
 Exclusive contracts
 Patents and trade secrets

The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.

External Analysis:

An opportunity is the chance to introduce a new product or service that can generate superior returns.
Opportunities can arise when changes occur in the external environment. Many of these changes can be
perceived as threats to the market position of existing products and may necessitate a change in product
specifications or the development of new products in order for the firm to remain competitive. Changes in the
external environment may be related to:

 Customers
 Competitors
 Market trends
 Suppliers
 Partners
 Social changes
 New technology
 Economic environment
 Political and regulatory environment

ELECTROTHERM INDIA LTD.

KAMAL STEEL MILLS-SWOT analysis

Introduction
Kamal Steel was incorporated in Tanzania (East Africa) in 2004, through Tanzania Investment Center (TIC) under
the foreign investment scheme. With an experience over a decade in India, The Mills will be installed with the
techno economic assistance by ELECTROTHERM INDIA LIMITED, which came into operations in stages during
1986.
The foundation stone of this vital and gigantic project was laid on July, 2010 by the President of Tanzania
Mr. Kikwete. The project will completed at a capital cost of USD 490 million. Its construction will be carried out by
a consortium of KAMAL construction companies , Electrotherm India Limited And TIM Engineering & technologies
limited under the overall supervision of Electrotherm experts.

KAMAL Steel is located at a distance of 45 km Southeast of Bog at A multiproduct EPZ, promoted by Kamal
Steels Ltd. is coming up in 300 acres in the Bagamoyo District close to Dar-es-Salaam near Port Zanjibar.
KAMAL Steel is spread out over an area of 300 acres. It marked KAMAL's entry into the elite club of iron and
steel producing nation

STRENGTH:

1. LARGE FINANCIAL RESOURCES:

The project will be completed at a capital cost of USD 490 million. It has enough financial resources to increase its
plant and supplies of products. It is patronized by the government of Tanzania which provide aid when needed

2. LARGE SIZE.

It is one of Tanzania‘s largest industrial unit. It provides jobs to thousands of workers. It is will produce enormous
steel products for customers both local and international. So it will earn more revenue than any other organization.

3. GREAT COPMETETIVE SKILLS:

It has been working consistently in steel production sector so it has achieved great competitive skills. It has ability
to face strong competition.

4. ECONOMIES OF LARGE SCALES

It will be enjoying the benefits of large scales. Due to large production its cost of production is kept at minimum.

5. EXPERT EMPLOYEES

Continuity of operations will be enabled by its employees to achieve great operational skills. Its employees will be
very skilled than other related industries.

6. GOVERNMENT SUPPORT

It enjoys the patronage of government of Tanzania.

8. EFFICIENT FUNCTIONING

It is functioning efficiently under quality administration. It is following internationally recommended principles in its
controlling.

9. PERFECT LOCATION

ELECTROTHERM INDIA LTD.

KAMAL STEEL MILLS-SWOT analysis

It was found to be an ecologically preferable location, alongside a tidal creek and having a wind direction away
from the city of Dar -e -salam. It is located on a very critical location. It is located near sea port and also linked to
major highways. So it has no difficulty in transportation.

10. RELATIONS

It enjoys strong relations with government officials. It also enjoys good relations with its customers both local and
foreign.

11. COMPETETIVE ADVANTAGE

Its business model has enabled it to achieve competitive advantage. Its products are very innovative and
relatively cheap.

12. INNOVATIVE

It’s will be pioneer in steel production in Tanzania so it will be very innovative after its commencement.

13. BY PRODUCTS

Galvanizing Unit to add to its profits.

14. MONOPLY

It will enjoy monopoly in steel products for years and earn lots of profits. There will be no match to its expertise in
steel production.

15. EXPANSION

It is an integrated mill with an annual capacity of 2 million tons of raw steel production with a built in potential for
expansion

WEAKNESS

ELECTROTHERM INDIA LTD.

KAMAL STEEL MILLS-SWOT analysis

OPPORTUNITIES

1. DIVERSITY IN PRODUCTS

Since it has been working for a very long time so it has achieved high skills to produce a large variety of products.
So it has ability to satisfy many wants of its customers and increase its profits.

2. WEAK COMPETITORS

Its competitors will be new to the market so they may not threatening its profits that much. It may producing more
types of goods than its competitors so it is ale to earn more profits.

3. HIGH BARGAINING POWER

Due to large scale of production it purchases raw materials in bulk quantities so it has high bargaining power and
enjoys discount from its suppliers. It also produces sophiscated products so it charges comparatively high prices
from its customers.

4. CUSTOMER TRUST

As it is a pioneer to the market its customers trust on its products. People prefer to buy its products. So it will
generating more revenue than its competitors.

5. MARKET DOMINAMCE

There have been no competitors in market for a period so it can achieve dominance in the market. The
customers will prefer its products.

6. INTRNATIONAL SCOPE

It is also supplying its products to neighboring & GCC Countries. So it will enjoy higher profits than its competitors.
Is equipped with all the necessary facilities, conforming to International standards.

7. SUB UNITS

It also has capacity to build its sub units. So it can produce a variety of goods than others in the business.

8. INCREASING DEMAND FOR PRODUCTS

The demand for steel products is will always on the rise. So it has the opportunities to generate revenues.

9. RELATED GOODS

It has the ability to produce related goods demanded by its customers. It has a great scope to increase its sales.

10. NATURAL DISASTERS

There has been an increased demand for its products due to natural disasters. Its products have the ability to
guard against natural disaster like earthquake. The people are building their homes with the support of steel
products so demand for its products is increasing and so are its profits.

ELECTROTHERM INDIA LTD.

KAMAL STEEL MILLS-SWOT analysis

11. SUB INDUSTRIES

There are many industries that use its products as raw materials to produce their goods. So demand for its
products is ever rising

12. FAST MARKET GROWTH

Due to heavy labor force and large capital it has the ability to increase supply of its products when demand for its
products increases.

13. ORGANIZATIONAL GOALS

It is fully committed to become no.1 organization in steel products in south East Asia. So it tempting its employees
to work hard

THREATS

1. NEW COPMETITORS

With the entrance of new competitors the sales decrease.

2. GOVERNMENT POLICIES

The previous government took many wrong steps like selling of PSM at lower rates. These kinds of policies are
threat to its existence. It was being privatized in indecent haste, ignoring profitability aspect and assets of the mills
by the financial adviser before its evaluation.

3. ECONOMIC CRISES

The current economic crises have a bad impact on profitability. There has been a considerable decrease in
demand for its products due to low people’s income.

4. ADVERSE DEMOGREPHIC CONDITIONS

The demand for steel products is ever changing. The people are switching to substitutions. So it may harm
company’s profits.

5. GROWING COMPETITION

The number of competitors in steel products is increasing.

ELECTROTHERM INDIA LTD.

KAMAL STEEL MILLS-SWOT analysis

6. LABOR UNIONS

Labor unions always a threat to a company. Labor unions may go to strike when their demands are not fulfilled.
Strikes may affect badly its working

7. RISE IN OIL/RAW MATERIAL PRICES

The rise in oil/raw material prices increased its cost of production. It was forced to sell its products at higher
prices which decreased demand for its products.

8. WITHDRAWAL OF GOVERNMENT SUPPORT

The government may withdraw its support..

9. INADEQUATE HUMAN RESOURCE MANAGEMENT

Since Kamal Steel is working on a large scale it needs highly educated people to control its labor efficiently. But
due to non availability of these people it is not working at a level where it should so it is a great threat to its profits.

10. GLOBALIZATION

It is a major threat to its profits. With the introduction of multinational companies in Tanzania its revenues may
decrease.

11. FREE MARKET ECONOMY

Free market economy may cause it to lower its product prices. Its profits may decrease.

15. POLITICAL INSATABILITY

Tanzania may suffer from political instability So it really has a negative effect.

ELECTROTHERM INDIA LTD.