SWOT Analysis BSRM Steels Ltd BangladeshSWOT Analysis of BSRM A scan of the internal and external environment is an important part of the strategic planningprocess. Environmental factors internal to the firm usually can be classified as strengths (S)or weaknesses ( W ), and those external to the firm can be classified as opportunities (O) or threats ( T ). Such an analysis of the strategic environment is referred to as aSWOT analysis.The SWOT analysis provides information that is helpful in matching the firm's resources andcapabilities to the competitive environment in which it operates. As such, it is instrumental instrategy formulation and selection. The following diagram shows how a SWOT analysis fitsinto an environmental scan: How Do I Find Strength or Weakness: Strengths and weaknesses are the factors of the firm’s internal environment. When looking for strengths, ask what do you do better or have more valuable than your competitors have? In case of the weaknesses, ask what could you improve and at least catch up with your competitors? Where to look for them? Some strengths or weaknesses can be recognized instantly without deeper studying of the organization. But usually the process is harder and managers have to look into the firm’s: Resources: land, equipment, knowledge, brand equity, intellectual property, etc. Core competencies Capabilities Functional areas: management, operations, marketing, finances, human resources and R&D Organizational culture Value chain activities Strength or a weakness? Often, company’s 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, firm’s organizational structure can be strength, a weakness or neither! How Do I Find Opportunities or Threats? Opportunities and threats are the external uncontrollable factors that usually appear or arise due to the changes in the macro environment, industry or competitors’ actions. Opportunities Competitor’s react to your moves and external changes. when organization cannot identify if the external factor will affect it positively or negatively. They also change their existing strategies or introduce new ones. For example. However As a Post graduate Student I found the following Strength. which may rise (opportunity) or fall (threat) against the home country currency. Market changes. Threats may damage your company so you would better avoid or defend against them. Opportunity or threat? Most external changes can represent both opportunities and threats. Therefore. economic. starting to satisfy other market segment needs with the same product. Market leader: BSRM is the market leader in the steel Market of Bangladesh. Strength or Opportunities: STRENGTH: i. exchange rates may increase or reduce the profits gained from exports. PEST or PESTEL analysis represents all the major external forces (political. The organization can only guess the outcome of the change and count on analysts’ forecasts. Reliability: . In such cases. changes in the market create new opportunities and threats that must be seized upon or dealt with if the company wants to gain and sustain competitive advantage.represent the external situations that bring a competitive advantage if seized upon. Weakness. environmental and legal) affecting the company so it’s the best place to look for the existing or new opportunities and threats. It has the ability to face strong competition. Great competitive skills: It has been working consistently in steel production sector. the company must always follow the actions of its competitors as new opportunities and threats may open at any time. ii. social. Markets converge. The most visible opportunities and threats appear during the market changes. As a result. This depends on the exchange rate. So it has achieved great competitive skills. Competition. technological. Where to look for them? PESTEL. it should gather unbiased and reliable information from the external sources and make the best possible judgment. New geographical markets open up allowing the firm to increase its export volumes or start operations in a new country. They occupy 12 % of the total steels market. Often niche markets become profitable due to technological changes. iii. BSRM decided to take over the ownershipof BISCO t hr ough acqui siti on of 95% of i ts enti re share hol di ngs fr om t heir exi sti ngshareholders. Comi ll a. BSRM Grouphas taken initiative to establish the largest billet making plant in Bangladesh under thename of BSRM Iron & Steel Co Ltd (BISCO). vii. Strong Marketing Lineup: BSRM has developed a sound and eff ect i ve mar keting policy to share knowledge about their products with design engineers.Be the preferred business partner of the customer and suppliers by offering quality products. Italy – oneof the three largest suppliers of equipments and plants in metal industry worldwide. The employees of BSRM have a strong sense of commitment towards organization and also feel proud and a sense of belongingtowards BSRM. Bor ga.Besi des thi s they have sever al sales and suppl y depots i n Dhaka. Strong employee bonding and belongingness: BSRM employees are one of themajor assets of the company. iv. vi. Modern Equipment & Technology: The BSRM “Xtr eme 500w”proj ect has been conceptualized by the German consultants “Badische Stahl Engineering (BSE)” andthe complete plant and machineries have been supplied by Danieli Group. WEAKNESS . v. Shylet. and Khulna. Strong Products Distribution Lineup: BSRM has appointed more than 300 dealersall over the country so that people can get BSRM products within a reasonable time. The strong culture of BSRM is the main reason behind this strength. viii. Soit has the latest and Modern equipment and Technology. thus creatingmore awareness in the minds of the customers. providing best and timely service before and after the business transaction. Backward-linkage industry: T o s t r e n g t h e n t h e c o m p e t i t i v e a d v a n t a g e o f t h e company and to minimize the dependency on obtaining raw materials. Market Dominance : As BSRM occupy 12% of the st eel mar ket of Bangl adesh and also they are the market leader.Tons to 500. Labor Unions: Labor unions are one of the emerging threats of Bangladesh now-a-days. Increased demand for the products: BSRM has a greater opportunity of profit as the demand for the 500-grade rods increasing day by day in the local market. International Scope: As BSRM is i nternationall y renowned company so i ts have s trong possibility to export steels product in near future. High interest rates decline profit: BSRM has a lar ge lone f rom var ious bank andfi nanci al i nst itutes of Bangladesh.i. THREATS i. iii. If they increase the production capacity then their production cost will decline.Tons.political situation that prevailed in2008 in Bangladesh stagnated all development works in the country. ii. Power Crises: In Bangladesh the power crisis is increasing day by day. ii. OPPORTUNITIES i. A s t h e government is failed to make uninterruptable supply of power and gas the production isdecline. Then the sales of steel decrease to half due to recession. iv. 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. After the expansion they can occupy 20 % of the local market. .000. Organizational Goal : The goal of the Company is to make life of the people secured and saf e by pr ovidi ng quali t y product s at a cheaper pri ce and t o be a par tner i n t he nation buil di ng act i viti es. Mor eover t hey ar e i ncreasi ng t heir production f rom 375. So t he i nterest rat es drop down t he profit s of t he company.000 M. But now they are producing only 200. Economic crisis: World recession and the socio.000 M. ii. Among them AKS (Abul Khayer Steel) is one of them. v. So competition will also increase in the steel market. As BSRM is a h e a v y i n d u s t r y i t n e e d s l o t s o f p o w e r s u p p l y a n d g a s i n d a i l y p r o d u c t i o n . For example Abul Khayer only can produce one forth of their production capacity due to gas crisis. They are targeting to produce 800. As BSRM is t he mar ket leader t hey have t o opport uni t y t o fulfill there organizational goal. Growing Competition: All the bi g st eel pr oducers of Bangl adesh wi sh to increase their production capacity. So there is a good probability that they can dominate t he mar ket. iii.000M.Tons of steel per year. Power Crisis: Power crisis is increasing day by day and that’s why the production of steel in a decline position. iv.