JSW Steel Swot Analysis

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SWOT Analysis of JSW Steel
Strengths
• Backward and Forward Integration: JSW Steel Operates in both upstream and downstream sectors. This gives it an advantage to avoid potential disruptions in raw material sourcing and end product distribution. Also this strategy is very helpful to drive margin expansion if the integrated resources are managed efficiently. JSW Steel also has a strong distribution network with its own chain of retail stores and: JSW Shoppe and JSW Explore, own stock yards, service centres.
• Diversified and Value Added Product Portfolio: The steel products manufactured by JSW steel are used by companies across multiple sectors like automobile, electrical transmission, oil and petrochemical, heavy engineering, construction,
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JSW’s Vijayanagar works which is the first Indian steel plant to use Corex technology was voted as the best integrated steel plant in India.
• Economies of Scale: JSW being India’s largest private steel maker enjoys better economies of scale and bargaining power wrt suppliers and consumers. The per tonne cost of steel JSW makes is INR 30-35k which is almost half that of other
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It procures domestically from NMDC whose prices are uncompetitive w.r.t the international prices. JSW imports almost half of its iron ore requirement.
Opportunities:
• Expected Rise in Domestic Steel consumption: With a stable government at the centre and a focussed approach on programs like “Make in India”, the domestic steel demand is slated to rise at a healthy pace across all sector. JSW steel is favourable poised to take advantage of India’s next growth cycle with a wide variety of products, technology and flexibility.
• Growing Global Automotive Manufacturing Industry: The automotive industry which had gone into a slowdown is on the up again. JSW’s production facilities cater to a wide range of products for these industries in both quality and quantity. This will help to drive the company’s revenue in the coming years.
• Strategic Acquisitions: JSW Steel’s growth story has been based on their eye for crucial acquisitions which have complimented their existing operations very well. For example- JSW’s acquisition of Ispat and Welspun. Such acquisitions will help the company to achieve further economies of scale and enhance it product portfolio
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