The Relevance of Competitive Intelligence in Indian Steel Sector

Anil Barik
Research Scholar
SOA University, Bhubaneswar,India-
Email: anil.sailrsp@gmail.com


Unknown to many, India had a role to play in Japans reconstruction in the years after World
War II. Indian iron ore fed Japanese steel mills, the backbone for growth in the countrys
construction and auto industries. And, till Chinas steel industry took off at the turn of the century,
more than three-fourth of iron ore exported from India landed in Japan.
Towards end of 2010 in India , supply glut in Japan ,increased Chinese exports to the country
and a sluggish domestic economy bring Japanese majors to India. All four major steel companies tie
up with Indian Steel Companies: JFF invests in JSW steel, Kobe has JV with Essar and SAIL,
Nippon with Tata steel and Sumitomom with Bhushan Steel. They are again complementing auto
peers like Toyota who are also setting up plants in India
India was the worlds fifth largest producer of crude steel in 2009 and is expected to become
the worlds second largest producer by 20152016.
In Indian steel sector scenario, The past can be a dangerous predictor of the future. This is
especially important if the present and/or the future have little in common with the past, as is
increasingly the case in the business marketplace today. Intelligence must be prospective-oriented,
looking both deeply and broadly at an indeterminate and uncertain future, and willing to take risks
by being both predictive and inventive. Foresight is not gained by looking in the rear-view mirror or
by using data pointing toward the past. Increasingly, a winning strategy will require information
about events and conditions outside the institution: non customers, technologies other than those
currently used by the company and its present competitors, markets not currently served, and so on.
Here comes the role of CI which will be future, as opposed to historically, oriented. They
will be predictive in addition to being descriptive and explanatory.
This paper gives an in depth analysis of trend ,Business strategy of Indian steel majors and
relevance of the CI to Mitigate Corporate Risks.
Key Words: Compititive Intelleigence, Indian Steel Sector, Business strategy,SWOT Analysis






INTRODUCTION :

Nowadays, economic organizations are subject to external forces that they must live with and
react to: increasing sophistication of competitors, customers and suppliers, globalization of
business, international competition. Perhaps the most critical component for success of the modern
enterprise is its ability to take advantage of all available information - both internal and external. Its
a real challenge, due to the tremendous flow of information its facing every day. Also, the nature of
information itself has changed, in terms of volume, availability and importance. The data to be
considered becomes more and more complex in both structure and semantics. With the Internet,
Intranets, Groupware systems the volume of available data increases each day customer
communications, internal research reports or competitors web sites are just some sources of
electronic data. Intellectual property and assets, knowledge are contained within the huge volumes
of information and leveraging this value is increasingly important in the competitive market. Making
sense of all this information, gaining value and competitive advantage through represents real
challenges for the enterprise. Information management its a part of knowledge management, as
information can be considered a type of knowledge (explicit knowledge). Integrating Business
Intelligence and Knowledge Management in order to respond to the challenges the modern
enterprise has to deal with represents not only a new trend in IT, but a necessity. Over time,
techniques from both technologies blended, Competitive Intelligence Systems are a direct result of
such integration.

No business is an island. For success, the business will need to deal with customers,
suppliers, employees, and others. In almost all cases there will also be other organizations offering
similar products to similar customers. These other organizations are competitors. And their objective
is the same - to grow, make money and succeed. Effectively, the businesses are at war - fighting to
gain the same resource and territory: the customer. The competitor will have secrets that can be the
difference between profit and loss, expansion or bankruptcy for the business. Identifying these
secrets is thus crucial for business survival. Finally, the relevance and importance of each piece of
information needs to be interpreted and analyzed - on its own and in conjunction with other
information, the other pieces in the jigsaw. This is where information starts to become intelligence.
Competitor intelligence needs to be evaluated and selectively communicated to all who need to make
decisions based on what customers, suppliers, or other companies in the market are doing or are
likely to do. And in today's world, that usually means everybody [14 ]

When some people hear the term competitive intelligence (CI), they often think of industrial
espionage or spying. Even though the term may imply some overtones of these activities, CI is really
involved with developing a systematic program for capturing, analyzing, and managing external (and
internal) information and knowledge to improve the organizations decision- making capabilities.
CIs focus is more on external views, but some people feel that it could include internal perspectives
as well. Knowledge management (KM) and business intelligence (BI) are closely linked with CI.
KM deals with how best to leverage knowledge internally within the organization and externally to
the organizations customers and stakeholders. Certainly, some cultures are more permissive and
receptive to knowledge sharing. This influences how willing people are toward sharing their
information and knowledge. Similarly, BI deals with how best to capture and share internal
information to make it widely available throughout the organization. KM and BI are close cousins to
CI . CI is similar, in a way, to playing sports. Scouting out ones opponents helps self to prepare a
game plan in advance CI is as simple as that collect, analyze, develop, and manage; collect the
appropriate information and knowledge, analyze the information and knowledge, develop an
approach based on the synthesis of the results, and manage companys expectations and strategy, and
adjust accordingly [ 11]

Competitive intelligence has undergone a raising interest in recent years as a result of the
information explosion and the sharpness of information technologies. Trying to define the scope of
competitive intelligence, a lot of definitions proposed by business intelligence professionals and
strategic analysts were summed up in the Competitive Intelligence Handbook .The general opinion
of all these business information professionals is By its very nature, no business is isolated. In doing
its activity, the business will need to deal with customers, suppliers, employees, and others. In
almost all cases there will also be other organizations offering similar products to similar customers
and seeking similar objectives: growth, profit and fame. These other organizations are known as
competitors.
Competitiveness is a natural relationship between businesses. Business competitors are other
organizations offering the same product or service in the present time but also in the that
Competitive Intelligence deals with the collection, selection and interpretation of publicly-held
information that emphasize competitors position, performance, capabilities and intentions.
Competitive intelligence is the analytical process that transforms scattered information about
competitors and customers into relevant, accurate and usable strategic knowledge on market
evolution, business opportunities and threats. It is focused on environment and uses public sources to
locate and develop information on competition and competitors, information later used as references,
benchmarks or any other basis for strategic analysis. Competitive Intelligence is the natural exploit
of the increasing availability of commercial databases world-wide, the on-line mass-media and the
development of cutting edge information technologies: business intelligence and knowledge
management. future and also organizations that could remove the need for a product or service by
offering substitutes or changing habits. Monitoring competitors worth a lot because it provides
necessary knowledge to be able to predict their next moves, exploit their weaknesses and undermine
their strengths. There are four stages in monitoring competitors - the four "C"s:
1. Collecting the information
2. Converting information into intelligence(CIA)
- Collate and catalogue - Interpret it - Analyze it
3. Communicating the intelligence
4. Countering any adverse competitor actions (making use of gathered intelligence)
This approach is war-like, with terminology taken from the military field (intelligence,
counterintelligence and techniques as well). [ 18]
Business and Competitive Intelligence :
The focus of business intelligence is on understanding all aspects of a business enterprise:
internal operations and the external environment, which includes customers and competitors (the
marketplace), partners, and suppliers. The external environmental also includes independent
variables that can impact the business, depending on the business (e.g., technology, the weather,
government policy actions, financial markets). All of these are the objects of business intelligence in
the broadest definition. But the term business intelligence is also used in a narrower sense to focus
on only the internals of the business, while the term competitor intelligence refers to those aspects of
intelligence that focus on the externals that influence competitiveness: competitors. A taxonomy of
the business intelligence terminology distinguishes business intelligence proper from competitive
intelligence by the objects of their study. Neutral external factors are often included in the definitions
of both categories of intelligence. [12 ]



Fig.1 The 4C approach of competitive intelligence [ 18]


Fig. 2 Business Environment Fig. 3 Competitive Intellegence Program

CI, especially when used for forecasting and scenario analysis, alerts us to competitive plays
that are happening or about to emerge in markets. It helps organization to explore growth and
market opportunities. It keeps employees smart, because it really pays to have smart employees. In
rapidly changing and consolidating industries, youre managing chaoslots of input happening all
the time. Organization need a well-articulated marketing strategy based on sound market research,
sound competitive intelligence, sound business intelligence, benchmarking, and metrics (Figure 2).
CI is a vital element for finding the right strategies, and for executing the strategies right. With the
appropriate resources, theres no reason why companies cant continue to grow in markets that are
changing rapidly


E
c
o
n
o
m
y
E X T E R N A L F O R C E S
C
u
s
t
o
m
e
r
s P
a
r
t
n
e
r
s
,

S
u
p
p
l
i
e
r
s
,

D
i
s
t
r
i
b
u
t
o
r
s
D I R E C T F O R C E S
Technology Demographics
Your Company
Current
Competitors
New Competitors
Regulatory Changes
P
o
l
i
t
i
c
a
l
Taxonomy of the Components of Business Intelligence
Business Intelligence: Acquisition, organization, analysis, and reporting of internal
and external factors to enable decision makers to make faster, more accurate and
effective decisions to meet business objectives.
Business Intelligence Competitive Intelligence
Focus of
Intelligence Internal External: Neutral Factors
External: Competitive
Factors
Objects
(Targets) of
Intelligence
Business operations
Supply chain
Customer relations
management
Buyers and suppliers
Customer structure,
preferences, behaviors
Financial environment
Regulatory climate
Marketplace environment
Segmentation
Market drivers
Buying patterns
Competitors
Strategic partner
candidates
Objective Efficiency Agility in the marketplace Security
Uses by
Intelligence
Consumers
Business process performance
analysis, refinement, and
reengineering
Market dynamics modeling
and forecasting
Market positioning
Learning customer trends
Identifying threats,
technology, regulation
Identifying competitor
threats
Tracking and
forecasting competitor
actions
Identifying, qualifying
strategic partner
candidates
Strategic Business Planning Process





Fig. 4 The CI cycle - [ 9 ]




1. Identify Key
Intelligence
Topics

Needs
2. Create the Knowledge Base
Intelligence Users
and Decision makers









3. Intelligence Collection and
Reporting




4. Making the Intelligence
Actionable and Understandable
Fig. 5
The CI Cycle: 5 Basic Operations Each is necessary and adds value. ( Herring, Model) [ 7]

For companies to realize lasting benefit from competitive intelligence that pays dividends to
strategy development and execution, it is critical that the competitive intelligence be a systematic,
ongoing activity that resides within the organization. The process cycle depicted in Fig.5
demonstrates the key components of that process. Too often, companies believe they can short-
circuit the intelligence process and fail to develop one or more of the components. Typically, the
analysis and production function is given short shrift, resulting in a poorly conceived program that
provides little more than data summaries to management under the guise of intelligence. No one
process can stand alone; all are necessary and add value to each other. [ 6]

COMMON GOAL OF COMPETITIVE INTELLEGENCE :
The common goals of a CI encompasses to Become aware of competitive threats, Do away
with or shrinking surprises , getting competitive advantage by decreasing reaction time and to
Explore new opportunities
For fulfilling these goals it is necessary to Identify the Competitor - Direct or Indirect,
Who is threat in the market (Self or Any major competitor),if self entry or existence is threat to
companys market, have in depth wing of research. Identify capabilities (strength) or weaknesses of
companys competitor and finally identify competitor's future prospects or opportunities.



"A competitive world offers two possibilities. You can lose. Or, if you want to win, you can
change."How? Answer is simple. Search. Research. Adopt. Market Research: Market studies enable
Planning
and Direction
Information,
Storage, and
Processing
Proper
Collection
and Reporting
Analysis and
Production
Planning
and Direction
Other Users
strategist to envision market sitting from his desktop. Market research can be
primary(Questionnaires, Focus groups, Indirect research (spying, counting ) research and secondary
research(Government Reports and Publications, Reports from research firms , News and Articles,
Yellow pages, Trade magazines, Associations and Industrial buyer guide.[12 ]

Analysis-Synthesis in the Intelligence Workflow

A typical intelligence production consists of all or part of three main elements:
descriptions of the situation or event with an eye to identifying its essential characteristics;
explanation of the causes of a development as well as its significance and implications; and the
prediction of future developments. Each element contains one or both of these components: data,
provided by knowledge and incoming information and assessment, or judgment, which attempts to
fill the gaps in the data [13]
Analysis-synthesis is one process within the intelligence cycle, the highest level abstract
business model of intelligence, It represents a process that is practically implemented as a continuum
rather than a cycle, with all phases being implemented concurrently and addressing a multitude of
different intelligence problems or targets. Further, the process integrates multiple Intelligences to
deliver integrated products to consumers derived from all sources. Several abstract models have been
developed to describe the details of the process, each with a different perspective and focus The
figure is organized with increasing levels of model granularity moving down the chart. The first two
models focus on command and control decision making for military action, while the second two
models are focused on the delivery of intelligence. The models are all cyclic, including the feedback
from results to actions that include sensor tasking to better observe a situation, or military response
to change a situation.(Fig. 6)
The stimulus-hypothesis-option-response (SHOR) model, emphasizes the consideration of
multiple perception hypotheses to explain sensed data and assess options for response. The model
detailed the considerations for commander decision making by making choices among alternative
course of action [17]
The observe-orient-decide-act (OODA) loop, is a high-level abstraction of the military
command and control loop that considers the human decision-making role and its dependence on
observation and orientationthe process of placing the observations in perceptual framework for
decision making [2]
The tasking, processing, exploitation, dissemination (TPED) model distinguishes between the
processing elements of the and the all-source analytic exploitation The TPED process has been
applied to independent stovepipe intelligence channels, and concepts have been developed to
implement wide-scale multi-INT processes. The model is a high-level organizational model that
does not include planning per se because it includes policy-level activities organizationally above
the processing chain [16 ]




Fig. 6 : Comparison of models that describe the intelligence process


The data fusion model is a more detailed technical model that considers the use of multiple
sources to produce a common operating picture of individual objects, situations (the aggregate of
objects and their behaviors), and the consequences or impact of those situations. The model includes
a hierarchy of data correlation and combination processes at three levels (level 0: signal refinement;
level 1: object refinement; level 2: situation refinement; level 3: impact refinement) and a
corresponding feedback control process (level 4: process refinement [15 ]


Knowledge is core to driving the strategic decisions that manage a firms competitive assets.
Whether it's discovering whats outside the firms network (competitive intelligence), or capturing
and leveraging whats inside its network (knowledge management),executives need to make
informed choices about how to best use finite resources. Competitive Intelligence Knowledge
Management (CIKM), the active integration and employment of knowledge from both outside and
inside the firm, is an essential ingredient in the decision making system.

Competitive intelligence pursues the filling of knowledge gaps. In practice, intellectual
capital is not captured systematically unless it is deliberately sought. Knowledge management is
resident primarily within the walls of the firm and its closest collaborators. While knowledge
management may also be mined outside the firm through communities of practice or other such
techniques, the knowledge sought may be limited. In addition to seeking people-based intelligence,
competitive intelligence also discovers information outside of the firm from Both disciplines use
knowledge. The knowledge management system may proactively distribute new information to
people who have requested such a service. In a competitive intelligence system, analysis and
resulting action options are disseminated to executives engaged in strategic decisions. Existing
knowledge management can provide competitive intelligence practitioners with a wellspring of
knowledge to begin their work. Competitive intelligence fills in knowledge gaps and thus helps to
build the firms knowledge cache [ 10]

PROBLEMS/ ISSUES BETWEEN CI PRODUCERS AND CI USERS
Many companies have CI departments, and most of these groups serve a given set of users.
Often, however, there are inherent disconnects between the users and producers of intelligence.
Users of CI characterize the information theyre receiving in terms of the following attributes:

Information is too shallow. The information doesnt have much depth and mostly contains the
public relations viewpoint reported by the media or by the competitor.
Credibility. The information and analysis were assembled by a 25-year-old MBA who has little
work experience in the industry. How can such a person possibly know more about whats going on
with a key competitor than a 20-year industry veteran?
Timeliness. Many users need the information today. If it takes a couple of days to assemble an
intelligence report, it may be a couple of days too late.
No clear objectives. Users often wont share with the CI group exactly what type of decision they
want to make with the information theyll be getting. This is basically like going to buy a car and
expecting the car dealership to help you, but not telling the salesperson the kind of car you want.
Not enough time to satisfy all the users. When a CI function adds real value, it soon becomes very
popular with its constituency. Users then send a deluge of requests, and they ultimately become too
much for the CI department to handle.
Different needs of multiple users. Some users want more in-depth information (deep divers), and
some want high-level information (skimmers).
Too much information to get through. With all the information available on the Internet today, as
well as all the subscription-based services from third-party research bureaus, the flood of
information is simply too much for the analysts to wade through.
No sharing of information. Users find it difficult to obtain information from the field. The axiom
Knowledge is power holds true to form. Users fear that if they have to share whats in their heads,
theyll lose any career positioning advantage within the company. [3 ]

GLOBAL STEEL INDUSTRIES SCENERIO :
After two years of deep economic recession, signs of economic stability are now visible in the
developed world. Though growth rates in the economies of developed world are still moderate,
countries in the developing region, in contrast, have been registering high GDP growth.
IMF estimates a positive economic trend in 2010 and the global economy to register a sharp 4%
growth. The WTO also projects world trade to expand by 9%, with the developed regions growing
by nearly 8% and the emerging regions by over 11%.
Following the world-wide economic crisis, the steel industry had demonstrated visible signs of
demand pick-up and price stabilization during the last quarter of 2009. However, as a result of the
deep recession through most of the year, global crude steel production had dipped by 8% during
2009 in comparison to the previous year. Major steel producing countries, such as, USA, Germany,
Russia, Japan and South Korea had witnessed drop in production ranging from 25% to 36%. In
contrast, however, crude steel production in China and India had grown by around 13% and 3%
respectively. The global downturn of 2009 and the subsequent recovery have accentuated the
importance of China and India to the world steel industry. Due to the widespread economic
recession, global steel consumption had declined by nearly 7% during 2009, in comparison to the
previous year. Finished steel consumption during 2009 was 1121 Million Tons. Steel consumption
in China and India grew by around 24%and 8% respectively, while other major steel producing
nations had registered significantly lower consumption. Since May, 2010, however, global steel-
demand has stagnated and prices are under heavy pressure. The slow recovery of US and European
economies had a dampening impact on overall steel consumption.[8]
World Crude Steel Production Summary 23 January 2012
Megatonnes (Mt) 2006 2007 2008 2009 2010 2011 %2011/2010
Europe 355.0 365.0 344.3 266.1 314.4 329.0 4.6
of which:
EU (27) 206.9 210.2 198.2 139.4 172.6 177.4 2.8
CIS 119.9 124.2 114.3 97.6 108.2 112.6 4.0
North America 131.8 132.6 124.5 82.6 111.4 118.9 6.8
of which:
United States 98.6 98.1 91.4 58.2 80.5 86.2 7.1
South America 45.3 48.2 47.4 37.8 43.9 48.4 10.2
Africa 18.7 18.7 17.0 15.3 16.6 14.3 -13.8
Middle East 15.4 16.5 16.6 17.7 19.6 20.9 6.9
Asia 674.1 757.3 783.0 810.4 915.8 988.2 7.9
of which:
China 421.0 489.7 512.3 577.1 638.7 695.5 8.9
Japan 116.2 120.2 118.7 87.5 109.6 107.6 -1.8
Australia/New
Zealand 8.7 8.8 8.4 6.0 8.1 7.2 -11.1
World 1,249.0 1,347.0 1,341.2 1,235.8
1,429.
9
1,526.
9 6.8
The Largest Steel-Producing Countries- 23 January 2012
Megatonnes (Mt)
Rank 2011(p) 2010 2009 2008 2007 2006 %2011/2010
1 China (1) 695.5 638.7 577.1 512.3 489.7 421.0 8.9
2 Japan 107.6 109.6 87.5 118.7 120.2 116.2 -1.8
3
United
States 86.2 80.5 58.2 91.4 98.1 98.6 7.1
4 India 72.2 68.3 63.5 57.8 53.5 49.5 5.7
5 Russia 68.7 66.9 60.0 68.5 72.4 70.8 2.7
6
South
Korea 68.5 58.9 48.6 53.6 51.5 48.5 16.2
7 Germany 44.3 43.8 32.7 45.8 48.6 47.2 1.0
8 Ukraine 35.3 33.4 29.9 37.3 42.8 40.9 5.7
9 Brazil 35.2 32.9 26.5 33.7 33.8 30.9 6.8
10 Turkey 34.1 29.1 25.3 26.8 25.8 23.3 17.0
The 64 countries included in this table accounted for more than 98% of total world crude steel production in 2011.
(Source : worldsteel.org)

INDINA STEEL SCENERIO :
India currently stands at an impressive record of economic growth. The average GDP growth in
2007-2010 was recorded at 8%. Besides, there was acceleration even within the tenth five year plan
period (2002-2007) where the growth rate in the last four years (of the plan) had averaged 8.7%,
making India one of the fastest growing economies in the world. Also, India exhibited resilience in
the face of global economic crisis by posting a growth of 6.7% in 2009 as the worlds economy
contracted by 2.1%.
Latest projections of steel consumption by World Steel Association peg finished steel consumption
in India to reach 71 Million Tons by 2011. Several major world steel companies are planning tie-up
with Indian counterparts to produce value-added steel products in India. The first six months of 2010
has seen a marked increase in steel demand due to strong growth in key user sectors, such as,
automobile, infrastructure, consumer goods etc.
Owing to the glut in overseas steel demand, there has been a significant increase in dumping of
cheap steel into India, much to the detriment of the domestic steel industry. Imports of both flat
products as well as long products has increased substantially.
Various brown field and green field expansion programmes have been announced, keeping in mind
the current consumption pattern as well as the projected demand growth. Domestic steel demand is
expected to be robust and grow by 12% annually. Capacity additions continue to be undertaken by
Indian steel majors and it is estimated that steel-making capacity would increase by 20% during
2010-11. However, no large green field steel project has been able to take-off, due to a stringent
regulatory environment in terms of land acquisition, forest clearances, grant of mining leases etc.
Poor infrastructure facilities also tend to increase overall costs, with an avoidable impact on the
finances of the steel industry. [21 ]
Share of Companies/Segments in Country's Crude Steel Capacity (%)
Producer /Segment 2002-03 2003-04 2004-05 2005-06 2006-07
SAIL 31.4 28.9 26.8 25.1 22.6
RINL 7.2 6.6 6.1 5.7 5.1
Tata Steel 8.7 8.0 8.3 9.8 8.8
ESSAR+Ispat+JSW 11.8 13.1 13.7 14.0 17.2
Other EAF and Mid Size 9.9 10.2 9.5 8.9 12.0
Induction Furnaces 31.0 33.1 35.6 36.5 34.3
Total Crude Steel Capacity 100.0 100.0 100.0 100.0 100.0
(Source: Annual Statistics, Joint Plant Committee ,Kolkota, India)
Capacity additions by major steel producers to meet increasing demand
India was the worlds fifth largest producer of crude steel in 2009 and is expected to become the
worlds second largest producer by 20152016. Total crude steel capacity in India is expected to be
around 112.5 million tonnes by 2015 a growth rate of 9%.

Expected capacity additions
Crude steel capacity
(millions of tonnes)
Year-ending 31 March
2007 2008 2009 2010 2012E 2015E
Tata Steel (India) 5 5 6.8 6.8 6.8 12.7
Essar Steel (India) 4.6 4.6 4.6 4.6 9.2 9.2
Ispat 3.6 3.6 3.6 3.6 3.6 3.6
JSW Steel 3.8 3.8 3.8 7.8 11 11
RINL 3.5 3.5 3.5 3.5 3.5 6.3
JSPL 2.9 2.9 2.9 2.9 4.9 6.9
SAIL 13.8 13.8 13.8 13.8 15.9 24.7
Bhushan Steel 0.3 0.3 0.3 0.3 2.2 5.1
Bhushan Power& Steel 1.4 1.4 1.4 1.4 1.4 1.4
Others 17.9 20.9 25.6 28 28 31.6
Total crude steel capacity 56.8 59.8 66.3 72.8 86.6 112.5
Source: India Steel Sector: India An outperformer in steel, BNP Paribas Securities via Thomson research, 19 October 2010

SWOT Analysis of the INDIAN Steel Industry
The SWOT analysis of the steel industry, as per Draft Steel Policy framed by Ministry of Steel,
Government of India are: (Source: National Steel Policy. Govt .of India, 2005)]
Strengths
Availability of iron ore and coal
Low labour wage rates
Abundance of skilled labour
Mature production base

Weakness
Unscientific mining
Coking coal import dependence
Low R&D investments
High cost of debt
Inadequate infrastructure
Opportunities
Unexplored rural market
Growing domestic demand
Exports
Consolidation
Threats
China becoming net exporter
Protectionism in the west
Dumping by competitors
OPPORTUNITIES AND THREATS INDIAN STEEL INDUSTRIES :
Opportunities
The projected GDP growth, strong prevailing trends in the Index of Industrial Production (IIP) and
increased governmental spending on core infrastructure projects are expected to drive domestic steel
consumption. Indian steel demand is likely to reach 100Million Tons in the next few years, offering
a tremendous scope to Indian steel producers to tap the huge potential. Sustained growth in
infrastructure, automotive and manufacturing sectors would ensure a steady demand accretion for all
steel products. With a perceptible improvement in demand from semi-urban and even rural
segments, hitherto unexplored markets are being looked-into, thrust is accorded on retail penetration
and service centres are being set-up to reach the major consumption points.
On the global front, demand in European Union countries is now expected to be better balanced, in
the long-run, in the wake of sovereign fiscal interventions.
Threats
The world-wide economic crisis and financial turbulence had resulted in a sharp dip in global steel
consumption during 2009. After several months of deep recession, based on the backing of a fiscal
stimulus-led global economic recovery, the steel industry demonstrated signs of demand pick-up and
price stabilization during the last quarter of 2009.Though the fortune of Indian steel industry appears
bright, the road ahead may not be very smooth and is likely to be topsy-turvy on several counts.
Some of the threats looming large over the Indian steel sector are:-
Sharp increase in prices of raw materials, such as, iron ore, coke and coking coal.
Increase in power tariff Frequent interruption in iron ore supplies.
Continuing exports of iron ore and consequent impact on domestic prices.
Inadequate infrastructure Delays in regulatory approvals for raw material linkages.
Various hurdles in acquiring land for green-field steel projects.
Dumping of cheap steel products into India and the consequent pressure on domestic prices

SWOT ANALYSIS OF MAJOR INDIVIDUAL STEEL PRODUCER IN INDIA:
The steel industry is characterized by cyclical fluctuations in prices of finished steel products as well
as those of the key inputs. Any downward cyclical movement in the steel sector could reduce the
demand for steel and reduce our profitability.
JSW
Strength
Major player in the steel sector and have a diversified client base, withstood the cyclic fluctuations
that have characterized the steel industry in the past. Ha have sourcing arrangements with suppliers
of power and oxygen which reduces our vulnerability to fluctuations in the prices of these raw
materials
Weaknesses
Debt / equity ratio or gearing is relatively high compared to some of the other integrated steel
producers in India. Profitability of Company is dependent on prices of key inputs such as iron ore,
coal and zinc. It does not own mines for some of its basic raw materials. Although the company is
focusing a on R&D, the budget is only a fraction of what international competitors can afford to
invest in their R&D activities
Opportunities
Cold rolled products are used in the automobile sector. There is a major opportunity for its products
on a large scale to the automobile sector resulting from robust growth in the demand for automobiles
combined with stringent regulations on pollution control pertaining to old vehicles.

JSPL - Jindal Steel & Power (JSPL), operates in India part of the Jindal Group, is engaged in
steel manufacturing, power generation, coal and iron-ore mining, and exploration and mining of
minerals and metals. JSPL. It is headquartered in New Delhi, India and employs about 15,000
people. The company recorded revenues of INR109,133.7 million (approximately $2,381.3 million)
in the financial year ended March 2009 (FY2009), an increase of 97% over FY2008
Threats
The cyclical nature of the steel industry means that the company needs to control its cost and have
efficient production processes throughout. The company also needs to manage its rapid growth
effectively and not go off track. This is another area which of concern and is likely to be the
managements top priority. Operating margins could come under pressure if there is a fall in the
demand for steel and increase in input costs
SAIL- Steel Authority of India (SAIL),Indian Public sector , primarily operates in India is engaged
in the business of manufacturing and marketing steel and its allied products. It is a fully integrated
iron and steel maker, producing both basic and special steel products for construction, engineering,
power, railway, automotive, and defense industries. The company employs about 121,300 people.
The company recorded net sales (sales net of excise duty) of INR431,767.6 million (approximately
$9,421.2 million) in the financial year ended March 2009 (FY2009), an increase of 9.1% over
FY2008. The operating profit of the company was INR75,600.2 million (approximately $1,649.6
million) in FY2009, a decrease of 22.8% compared with FY2008. Strength : Public sector
organization, having own mines and Financial support from Govt.

TATA STEEL ,Group is one of India's largest integrated private sector steel companies. The group
manufactures and distributes steel, welded steel tubes, cold rolled strips, bearings, and other related
products. Tata Steel Group operates across Asia, Europe, and Australia. Tata Steel Group is
headquartered in Mumbai, India and employed 81,269 people as of March 2010. The group recorded
revenues of INR1,023,931.2 million ($21,615.2 million) during the financial year ended March 2010
(FY2010), a decrease of 30.5% compared to FY2009.
The Indian steel industry is highly competitive. We face substantial competition in the steel
industry, both from Indian and international companies. Domestic as well as international steel
majors like Tata Steel, POSCO and Mittal Steel have announced plans to set up manufacturing
facilities in India. This could lead to excess capacity and consequently downward pressure on the
prices of finished steel products.
Competitiveness of the Indian Steel Industry
Competitiveness of the Indian steel industry has been examined by various experts at
different points of time. While the increased presence of the Indian steel companies in the world
market over the last decade has been taken as a pointer to increasing competitiveness of the industry
in India, the operational performance of most of the steel plants, small or big, have been found to be
falling short of the level achieved by the international bests. It is widely reported that the Indian steel
plants are relatively inefficient in specific energy and raw materials consumption. [1 ]

[ Figs in
MnT]
208
2 22 20 00 08 88 8





Fig. 7 INDIA : Finished Steel Production Trend

(Ref. :JPC / Ministry of Steel /Estimates)- India shall be producing & consuming over 400 million tons of steel like china


1.25
6.6
12.2
42.7
1
9
4
8
-
4
9
1
9
7
3
-
7
4
1
9
9
1
-
9
2
2
0
0
5
-
0
6

(
E
)
2
0
1
9
-
2
0

(
P
)

Sectors Consumption
in 2006-07
(Mt)
Projected
Consumption
in
2011-12 (Mt)
Projected
Consumption
in
2019-20
(Mt)

CAGR
(%)
2006-
07 to
2019-
20
Manufacturing 10.0 16.0 37.0 10.6
Construction 13.3 31.0 70.0 13.6
Tube Making 3.0 5.0 9.0 8.8
Cold
Reducing
5.2 8.0 17.0 9.5
Railways 1.5 2.0 4.5 8.8
Household
Appliances
1.5 2.5 5.0 9.7
Auto 3.0 3.5 8.5 8.3
Oil & Gas 2.8 8.0 25.0 18.3
Others 4.0 6.0 8.0 ==
Total
Finished
Steel

44.3

82.0

184.0
11.6



Opportunities

Threats: Iron Ore Production India,
Export of Iron Ore has grown 3 times in
last 5 years.
Fig. 9
How can the concept of relevance contribute?
Ubiquitous knowledge hides the problems of harnessing it in plain sight. If everyone can find
knowledge everywhere, competition will be in finding the right facts for the chosen purpose.Similar
to the days when finding any information at all was the challenge, the difficulty today lies in
deciding which information is important (relevant, timely) and which is not. The ability to prioritize,
analyze and act on the exact , correct subset of data from all available knowledge is decisive. It
solves the problem of data overload and allows the information process to become efficient.
However, organizations can only use this ability to its full extent if they know the big picture: an
overview of the current business reality including a future outlook (assumptions and analysis: what
we believe will happen), vision (creativity and belief: where we believe we should be going) and
direction (leadership: lets go!). The problem with the big picture is that is seems only partially
based on facts. Instead of being a topic of explicit discussion in the Direction phase of the BI-cycle,
a large part of the big picture is usually made up of implicit assumptions, interpretations and cultural
beliefs.
Consequently, the image of the big picture is colored by corporate culture, current events, media
coverage and (corporate) politics. As if this is not enough, in deciding which details are relevant to a
company, management and employees have a predetermined set of ideals and presumptions that
effect the future outlook, either as wishful thinking or as experienced preparation. The future outlook
(and with it the big picture) are further influenced by the organizations mission, vision and
previously chosen strategic direction

What can Indian Steel Sector gain?

The value of better decision making is intangible and difficult to quantify. However, we usually
believe that having access to the right information increases the quality of decision making.
Effective decision making in terms of increased competitive power, operational results or growth can
be achieved by providing better (more relevant) information to the decision makers. However,
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Production Growth
Rate
Export Growth Rate
Domestic Consumtion
Growth Rate
collecting as much information as possible about markets and competitors will not aid any
organization in reaching its goals faster or better than its counterparts. Even if the organization
manages to set up a large data warehouse which distributes all the right data, at the right time to the
right people in a consistent manner, it will not necessarily outperform its competitors., The chances
of better decision-making so far Indian Steel Sector is concerned, increase if the relevant information
is both available and used. Here CI Plays the right Role. [4 ]

CONCLUSION :
The viability and success of modern enterprises are subject to the increasing dynamic of the
economic environment, so they need to adjust rapidly their policies and strategies in order to respond
to sophistication of competitors, customers and suppliers, globalization of business, international
competition. Perhaps the most critical component for success of the modern enterprise is its ability to
take advantage of all available information - both internal and external. Making sense of all this
information, gaining value and competitive advantage through represents real challenges for the
enterprise
In being competitive, the implication is that Company competing to serve the customer.
But sometimes that fact gets lost. Intelligence should assist company, ultimately, in serving its
customer
Companies in India monitors competition using either Passive Intelligence and Semi Active
intelligence and Human Intelligence. Organizations in India are discreet about competitive
intelligence. They do not call it competitive intelligence. Leading companies in India monitor the
environment through open source emissions such as Financial Times, Economic Times and other
newspapers. Business houses in India also watch business news channels. Scanning of the
environment is done using external auditors, internal auditors and legal experts. Organizations use
analysis tools such as Five Force Analysis, Strength, Weakness, Opportunity and Threat Analysis,
Value Chain Analysis, Political, Economic, Social and Technology Analysis are used by employees
in the organizations. Indian businesses derive low cost advantage as white collar workers come at
lower salaries. [20 ]
The CI output needs to be Future-oriented - The past can be a dangerous predictor of the
future The better analytical methods for CI will be future, as opposed to historically, oriented. They
will be predictive in addition to being descriptive and explanatory, Accurate - Although achieving
perfect accuracy is desirable in theory, it is often less desirable in practice and requires that the
analyst make trade-offs against other conceptual and pragmatic considerations, Resource-efficient -
When data being used in analysis comes from primary sources (i.e., most "human intelligence", it
potentially lowers the level of analytical accuracy, and it requires greater skill to elicit what is
actually required from the primary sources. Nevertheless, many secondary databases may give great
accuracy and timeliness but little in the way of a future-orientation, despite their high price. Useful -
suggests that the analytical outputs and process must be clearly communicated in a language that can
be easily explained and understood by the recipient and above all Timely-Certain methods of
analysis may provide the intelligence required, but take far too long to develop. On the other hand,
other methods of analysis may require little time but do not deliver the required features of
objectivity, accuracy, utility, and resource efficiencies. Valuable analysis will provide decision-
makers enough time to allow the company to implement the course of action recommended by the
analysis [5]
Technological innovations like Corex, Finex Tech, Dry Coke Quenching etc have provided
the competitive edge to the technologically strong companies like Tata Steel & JSW. Smooth and
quick transfer of technology has, however, meant an increasingly competitive pressure on the
companies to be ahead of the others in the race for technological superiority to maintain and, if
possible, to strengthen the bottom lines.
In the context of natural resources, where market does not seem to be very well organized
to the competitive levels and there are no strong conditions that favour the process of price
discovery, the government policy actions have had a substantive impact on the competitive
conditions for the steel industry
References :

1 A.S.Firoz (2008), Competition Issues in the Context of the Steel Industry in India, White Paper,
S NRSR, New Delhi,India, 1st October 2008
2 Boyd, J. R.,(2002), The Fighter Pilot Who Changed the Art of War, Boston: Little, Brown, 2002
3 Bret Breeding, (2000) CI and KM Convergence: A Case Study at Shell Services International ,
Competitive Intelligence Review, Vol. 11(4) 1224 (2000). John Wiley & Sons, Inc
4 Collins, Jim, (2001) Good to Great, Collins Business
5 Craig Fleisher, Babette Bensoussan, (2000), A FAROUT way to manage CI analysis, SPICE Vol. 03
No. 02, April - June 2000
6 Galvin, R.W. (1997, Spring). Competitive intelligence at Motorola. Competitive Intelligence Review,
8(1),pp 36.
7 Gilad, Ben, and Jan P. Herring (eds.). (1996). Advances in Applied Business Strategy, Supplement 2,
1996: The Art and Science of Business Intelligence Analysis. Part A: Business Intelligence Theory,
Principles, Practices, and Uses. Greenwich, CT: JAI Press
8 Gilles Calis,(2006) A report on New competitive realities in steel,, MILLENNIUM Steel Consult,
International, Amsterdam, The Netherlands, 2006,
9 Hans Gieskes,(2000) , Competitive Intelligence not just an exercise, Competitive Intelligence,
Magazine,Vol. 3(2), pp 5
10 Helen N. Rothberg, G. Scott Erickson(2010) Stacking the Strategy Deck with CIKM ,Scip
Insight,Vol.3,Issue.3,March 2010 pp1-2
11 Jay Liebowitz, (2006)Strategic Intelligence Published in 2006 by Auerbach Publications Taylor &
Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 Pp 52 -59,
12 John E. Prescott, Stephen H. Miller (2001), Competitive Intelligence Lesson from the Trenches
,Society of Competitive Intelligence Professionals.,. Published by John Wiley & Sons, Inc
13 Kam, E., (1988) Surprise Attack, Boston: Harvard University Press, 1988, p. 120
14 Pugna, Irina, Albescu F.(2007), Knowledge Integration for management use, International Conference
on Accounting and Management Information Systems (AMIS) vol.2 June 2007, Bucharest
15 Steinberg, A. N., C. L. Bowman, and White Jr., F. E., (1998) "JDL Data Fusion Model," Proc. of
Third NATO/IRIS Conf., Quebec City, Canada, 1998
16 The Information Edge(2001): Imagery Intelligence and Geospatial Information In an Evolving
National Security Environment, Report of the Independent Commission on the National Imagery and
Mapping Agency, Washington, D.C., January 9, 2001
17 Waltz, E. L., and D. M. Buede, (1986)"Data Fusion and Decision Support for Command and
Control," IEEE Transactions on Systems, Man, and Cybernetics, Vol. SMC-16, No. 6 November
December 1986, pp. 865879
18 Weiss Arthur(2002) A brief guide to competitive intelligence Business information Review , (ISSN
- 0266-3821) vol 19, nb 2 June 2002
19 www. worldsteel.org
20 www.ezinearticles.com/?expert=Vivek_Raghuvanshi/ Competitive Intelligence in India
21 www.indiainfoline.com/Markets/Company/news/company-news/JSW-ISPAT-Steel-Ltd/500305