Principles of Management Assignment

SWOT Analysis
(SAIL Steel Authority of India Ltd.)
-Vineet. M. Ganvi. JKITM.

A SWOT analysis must first start with defining a

desired end state or objective. A SWOT analysis may be incorporated into
the strategic planning model. An example of a strategic planning technique
that incorporates an objective-driven SWOT analysis is Strategic Creative
Analysis (SCAN). Strategic Planning, including SWOT and SCAN analysis,
has been the subject of much research.

• Strengths: attributes of the person or company that is helpful to

achieving the objective.

• Weaknesses: attributes of the person or company that is harmful to

achieving the objective.

• Opportunities: external conditions that is helpful to achieving the

objective.

• Threats: external conditions which could do damage to the business's

performance.

Identification of SWOTs is essential because subsequent steps in

the process of planning for achievement of the selected objective may be
derived from the SWOTs.
First, the decision makers have to determine whether the objective
is attainable, given the SWOTs. If the objective is NOT attainable a different
objective must be selected and the process repeated.
 The SWOT analysis is often used in academia to highlight and
identify strengths, weaknesses, opportunities and threats. It is particularly
helpful in identifying areas for development.

However, SWOT analysis is just one method of categorization

and has its own weaknesses. For example, it may tend to persuade
companies to compile lists rather than think about what is actually important
in achieving objectives. It also presents the resulting lists uncritically and
without clear prioritization so that, for example, weak opportunities may
appear to balance strong threats.

It is prudent not to eliminate too quickly any candidate SWOT

entry. The importance of individual SWOTs will be revealed by the value of
the strategies it generates. A SWOT item that produces valuable strategies is
important. A SWOT item that generates no strategies is not important.

The usefulness of SWOT analysis is not limited to profit-seeking

organizations. SWOT analysis may be used in any decision-making situation
when a desired end-state (objective) has been defined. Examples include:
non-profit organizations, governmental units, and individuals. SWOT
analysis may also be used in pre-crisis planning and preventive crisis
management. SWOT analysis may also be used in creating a
recommendation during a viability study.
 SAIL
(Steel Authority of India)

Steel Authority of India Limited (SAIL) is one of the

largest steel makers in India. With a turnover of Rs. 45,555 crore, the
company is among the top five highest profit earning corporates of the
country. It is a public sector undertaking wholly owned by Government of
India and acts like an operating company. Incorporated on January 24, 1973,
SAIL has more than 131,910 employees. The company's current chairman is
S.K. Roongta. With an annual production of 13.5 million metric tons, SAIL
is the 16th largest steel producer in the world.

Major plants owned by SAIL are located at Bhilai, Bokaro,

Durgapur, Rourkela, Burnpur (near Asansol) and Salem. SAIL is a public
sector company, owned and operated by the Government of India.
According to a recent survey, SAIL is one of India's fastest growing Public
Sector Units.
 The Swot Analysis for SAIL can be carried out in the following manner:
STRENGTHS
Staffing is a big strength for SAIL as being a Govt.
venture it is looked upon for generating and offering
employment
Customer base is another major strength for SAIL as it
offers steel at subsidised rates and hence caters to
high volume of clients
Another strength for SAIL is its Market position which
is on a very successful level and thus there is no
hesitation in its clients
Financial Resources also acts as a strength as it can
use Govt funds for ventures.
Sales Channels also is a strength as it uses all
possible channels for promotion and Sales.
Another Strength is the (product Steel) is core in
nature and related to almost all development and
infrastructure activities.
Profitability is another strength as SAIL records
astounding profit figures in spite of providing social
benefit and subsidies to its clients.
OPPORTUNITIES
However SAIL has certain opportunities as it is
affiliated to the Central Govt. of India and hence
expansion and growth is possible
SAIL also can adopt globalisation with ease using
Govt. support
Also SAIL being financially sound can undertake
merger and acquisition projects with weaker
counterparts.
It can also involve in production of forward integration
products and by-products apart from its core product
(Steel) with the help of its healthy brand image.
WEAKNESS
Staff also posses as a weakness in a certain way as
SAIL being a Govt. venture, targets and workload are not
tight and job security leads to staff not being fully
productive
Another weakness is that higher profit margins are
possible but not allowed since being a Govt venture.
Competitive Vulnerability is another weakness as
competitors include private players with better quality
manpower, strategies and policies.
Another weakness is production of a single vertical
(Steel) and no diversification.
Also a major Weakness is completely answerable to the
Central Govt. and hence exposed to corruption and mis-
management
THREATS
Threats would include change in Govt Policies and
Economy trend which can have a direct impact on the
functioning of SAIL.
Also emerging and existing private sector competitors
who can steal market share.
Also late implementation of technology and modern
machinery as compared to counterparts can pose a
potential threat.
Apart from the above major threats, labour turnover can
also cause problems due to existence of higher paying
jobs with better benefits in the sector.
Report by: Vineet. M. Ganvi (JKITM)
For: Principles of management
SWOT Analysis for SAIL
Dr. Kavita KM