SWOT analysis is an examination of the strength, weakness, opportunities and threats faced by a company during its phase of operation. A SWOT analysis is important for Tata Steel to evaluate its current position and formulate strategies to tackle its competitors.

Strengths of Tata Steel

Tata Steel is the pioneer of steel business in India and thus enjoys brand equity. Tata Steel has a multiple companies under the same banner, which gives it an advantage of value-chain efficiency, whereby the company can utilize products made in its sister companies to process raw materials and increase efficiency.

Weaknesses of Tata Steel

The biggest weakness of Tata Steel is its increasing debt-to-equity ratio. Most of its assets are financed by debt, which can be dangerous in the long-run. Tata Steel largely depends on domestic and a few international markets for generating business. This over-dependence can prove to be fatal in times of economic crisis.

Opportunities for Tata Steel

Tata Steel is branching out to overseas market. The company has recently signed a deal with Corus group, which provides access to European markets. Tata Steel will now be in a position to utilize the R&D facility and the patents owned by the Corus group. Exposure to new technologies and markets is a big advantage for the company.

Threats to Tata Steel

In the current scenario, the biggest threat for Tata Steel is to maintain the Co2 emission standards when it starts its operations in Europe. The sudden overseas exposure along with a possible economic slowdown is the biggest challenge faced by Tata Steel in the present circumstances.