Strategic Management Accounting - Tata Steel

STRATEGIC MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
A) Current business strategies of Tata steel Europe ..................................................................1
B) Influence of key factors of environment on Tata steel Europe..............................................3
C) Evaluation of Tata steel Europe business operations and corporate social activities............5
D) Evaluation of Balance scorecard concept and assist in delivery its corporate responsibility
commitments...............................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management accounting is related to the strategic business activities which are
merged with the management accounting information in order to make effective business
decisions. In this study, The Tata Steel Europe will be consider which is a steel making company
which is operating in UK. The company earned revenue of US$ 2.167 Billion in the year 2017.
This assignment will analyse the business strategy adopted by Tata steel Europe. Moreover, it
will provide understanding of the key factors of environment which have their influence on the
operation of Tata steel Europe. Furthermore, It will contain information about the business
operations and corporate social activities. Also, it will provide critical evaluation of balance
scorecard and the system which can help Tata steel Europe to drive and measure its performance
and deliver its corporate responsibility commitments.
MAIN BODY
A) Current business strategies of Tata steel Europe
The porter generic strategic which are adopted by Tata steel Europe in order to gain
competitive advantage towards other firms. These strategies adopted by the company assist them
in gaining sustainable competitive advantages towards the competitors in the industry (Morden,
2016). A competitive advantage is the strength for the firm which the firm can use over the other
competitors in order to increase their market share and profitability of business.
These strategies consist of the following :
 Cost leadership : Organisation by adopting this strategy can become the lowest cost
producer in the industry. It assists in controlling the cost in the market. According to this
strategy the organisation can increase their customer base b y providing their products
and services at the lowest cost then the price prevailing in the market. But the cost
leadership strategy also provide an option to the companies to reduce their cost of
products and offer the products and the price prevailing in market which will in turn
assist in increasing profitability of business. Tata steel Europe in order to attract
customers is providing the products at the lower cost which aims at leading the market by
leading the change in the cost of products. The Tata steel Europe have high level of
productivity and are involved in creating innovation in their products.
1

 Differentiation leadership : This strategy adopted by business aims at offering unique
products and services to customers which are not present with competitors. This strategy
assist in creating value for the customers and assist in retaining customers for a long run
in business (Otley, 2016). Tata steel Europe is pursuing the differentiation strategy
which aims at maximising the proportion of differentiated products and services. This
company conduct research programmes which are aimed at developing product
technology and improving sustainability of steel products. Tata steel Europe closely work
with their customers in order to identify their demands and develop new products which
will helps them in succeeding in the industry.
 Cost focus : In this the business focus on attaining lower cost advantage in the small
market rather than selling the products and services in different market segments. This
assist the firm in becoming the market leader in that market segment. Tata steel is having
a global presence a strong brand portfolio which make the company a market leader in
this industry.
 Differentiation focus : By using this strategy the firm aims at providing the
differentiated products in the small market segment rather than providing in the large
market segment (Chiarini and Vagnoni, 2015). With the help of this strategy the
companies are able ton gain competitive advantage in the small market segment by
identifying their customers needs regarding different products and services which are not
met by the competitors assist in gaining competitive advantage against the competitors if
company provide differentiated products to customers which are demanded by them top
increase their profitability and market share.
From the above model it is identified that the company in order to gain a competitive
advantage against the competitors can use various strategy which will help firm in attaining a
competitive advantage. Tata steel Europe is using market differentiated strategy in order to meet
the demands of customers which are not met by competitors (Our strategy, 2019). This company
is focusing on creating value for the customers providing them higher quality products and
services. Moreover, the firm is investing in improving the manufacturing and distribution
facilities in order to improve their performance and cost competitiveness. Through the use of this
2