Strategic Analysis and Evaluation of TATA Steel Europe

This report provides a comprehensive analysis of TATA Steel Europe, focusing on its strategic management accounting practices. It begins by applying the Ansoff matrix to evaluate TATA Steel's current business strategies, including market penetration, market development, product development, and diversification. The report then analyzes the key internal and external factors shaping TATA Steel's business environment, such as R&D, distribution channels, competition, and growth projects. Furthermore, it critically evaluates TATA Steel's business operations and corporate social responsibility initiatives, examining the company's adherence to task and role cultures. The report also assesses the balance scorecard concept and its role in identifying performance metrics and fulfilling corporate responsibilities. Overall, the analysis provides insights into TATA Steel's strategic approach to achieve its business goals and maintain its position in the competitive steel industry, concluding with a summary of the key findings and recommendations.

Strategic Management
Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
(A) By using theoretical model analyse the current business strategies of TATA Steel Europe1
(B) Analyse how key factors embedded in TATA Steel Europe business environment............2
(C) Critically evaluate the TATA's business operations and corporate social responsibility.....3
(D) Critically evaluate the balance scorecard concept and system which help the TATA Steel
Europe to identify performance or deliver to the corporate responsibility.................................5
CONCLUSION ...............................................................................................................................7
REFERENCE ..................................................................................................................................9

INTRODUCTION
Strategic management accounting is the combination of business objective and
management accounting information which look forward for the business decision making. It
includes the formulation & implementation of the business goals and objectives and these steps
taken by the top management people. This assessment is based on internal and external
environment where organisation operate their functions. This report is focused on TATA Steel
Europe company which is a steel making company and its headquarters are situated in London
(Bromiley and et.al., 2015). This report includes theoretical model which is applied on
organisation according to their business strategies. It also includes the key factors which
influence the business environment and also use other framework to critically evaluate the
business operation of TATA Steel Europe. Along with this, evaluation of balance score card and
measurement of the performance or deliver the corporate responsibility is also done.
(A) Analysis the current business strategies of TATA Steel Europe
Ansoff model is the strategic planning tool which help the organisation to perform their
task according to framework. This matrix helps to senior manager, executives & market
researcher for the purpose of analysis and majorly helps in decision making process. This model
provide help to the manager regarding strategic planning and show the future expected growth.
This matrix includes the four different type of strategies such as:
Market penetration: - This marketing strategy followed by the various organisation
where business introduce their existing products in the existing market for the further growth.
Organisation continuously improve their manufacturing, cost competitiveness and distribution
facilities to their consumers. For example: - TATA Steel company can develop their existing
product that is cold rolled steel in the UK market and the follow best practices to achieve their
production level such as maintain plant, supply chain management or other operational activities.
These practices help the organisation to improve their existing product in the existing market
(Brustbauer, 2016). TATA Steel Europe company can focus on operational excellence through
market penetration.
Market development: - It is the second market growth strategy of this model which
focuses on existing product in the new market. In this phase organisation introduce their existing
products in the new market and it is done through focusing on consumers. Organisation identify
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the consumer's demand & preference in the market and then identify market where they have to
introduce their product. For example: - TATA Steel company can launch their existing product
such as cold rolled steel in the German market. Because there is huge demand of cold rolled steel
and Germany market have less suppliers to fulfil the demand of this product. TATA Steel
company build a proper team who closely work with the consumers to identify market need and
demand.
Product Development: - In the product development, business have to introduce new
product in the existing market and it depends upon the market share of the company. TATA
Steel company have very good reputation in the market so they can sustain in the market. For
example: - TATA Steel company can introduce their new product that is Metallurgy in the
Europe country. Company regularly identify the market demand through research and make it
possible to satisfy the market. New product developed in the existing market will provide the
strength to the company to survive in the market. TATA name is sufficient in the market to make
it popular between the consumers or suppliers. With the help of innovation business can attract
more consumers because people find the unique products to use them. TATA Steel spend lots of
money on their research and development department to identify unique product to introduce in
the market. Product development strategies help the TATA Steel company to increase their
market share, profitability, increase their consumers as well as brand value of the organisation.
Diversification: - Diversification means company introduce new product in the new
market and it will include the huge risk because it required lots of money to invest.
Diversification in organisation will be achieved by establishing new units in different areas that
helps to grab targeted consumers. Strategy of employees’ growth, nurture talent, foster team
work will be achieved by appointing right employees at right place. Diversification will provid
employees an opportunity to show their talent in new field or at some other job profile (De Waal,
2013). In an organisation with the help of diversification object of growth can be achieved by
offering employees who are more competent in performing activity. For example: - TATA Steel
company can introduce their new product which is Metallurgy in the new market that is German.
It will require a lot of planning, investment, risk and different strategies according to the
situation. In the organisation, product development team identify future trend in the technology,
recommend the various material for the production, design the product and then continuous
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improve according to requirement. TATA Steel company have strong relationship with their
suppliers across the chain who help the organisation to deliver steel in the future.
Currently TATA Steel Europe company use the product development strategy in their
organisation because it will help the business to increase their product line and it is not too risky
in comparison to market diversification or differentiation. Brand value or market share help the
TATA Steel company to launch their new product in the existing market. Company already have
their customers in the market and TATA Steel have good name in the market among the
suppliers. Which help the organisation to introduce new product and it will become successful
(Brustbauer, 2016).
(B) Analyse how key factors embedded in TATA Steel Europe business environment
Internal factors of the organisation:
Advanced R&D: - Extensive research help the TATA Steel company to analyse market
or consumer's demand to fulfil the requirement of product development strategy. Organisation
need to invest in research part and it provide the information regarding develop new product
such as consumer taste, preference, buying habit or demand. Research and development help the
TATA business to identify the market requirement because of this company introduce new
product in the existing market. Marketing research help the product development strategies
which is adopt by the TATA Steel Europe company. Effective research department is the
strength of TATA company which help the business to execute their product development
strategy. Market trend will change rapidly so it is important for the company to work parallel
with the market demand or trends. So because of this factor organisation required to develop new
product in the existing market.
Strong retail and distribution: - TATA company have strong distribution channel
which help the product development strategy. Manager not required to find any other distribution
channel they use their existing once. Because of this reason business choose to develop new
product because they have huge retail and distribution contact. It is the strength of TATA steel
company to have strong relation with their retailers or distribution channel. It is beneficial for the
business because they don't require to spend extra money or effort to distribute their products
among the suppliers or consumers (slam and Hu, 2012). Supply chain, effective logistic
department, distribution channel these factors force the company to develop new product in the
existing market.
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External Factors of the organisation:
Intense competition: - In the steel industry business TATA company also face the huge
competition which is threat for the business. Organisation need to build unique or different
products which can provide competitive advantage. Because of this threat TATA Steel Europe
use the product development strategy because it consists less risk rather than other development.
Company use the existing market to develop new products. TATA business have competitors
such as JSW steel, Esser steel etc.
Growth project: - Demand of that particular products will increase in the future such as
Construction and Automotive industry. It the opportunity for the TATA steel company to expand
their business with the help of launch new product by using product development strategies.
TATA Steel Europe launch new product that is Metallurgy in the existing market because it has
future scope.
(C) Critically evaluate the TATA business operations and corporate social responsibility
According to Charles Handy there are four type of organisational culture that follow by
the TATA Steel Europe. It includes power, task, person or role culture which followed by the
various organisation in the business environment. But TATA Steel company follow the Task &
Person culture in their organisation where business more concern about people rather than profit
making strategies. Company majorly focus on their stakeholders because they wanted to build an
effective relationship with them and TATA also contribute in the society for their welfare.
Task culture: - Task culture follow by the various organisation because manager majorly
focus on achieving business goals & objectives or try to reduce operational issues through
critical evaluation of the problem. TATA Steel Europe also follow the Task culture in their
working environment and provide their employees a common goal to achieve. It is all manger's
responsibility to provide proper direction and guidelines to their staff member to work according
to the strategy. TATA also fulfil their corporate social responsibility toward their internal
stakeholders such as employee, manager, Board of Director (BOD) and internal investors. By
providing better infrastructure to work, comfortable environment, effective incentive policies and
other medical benefits (Islam and Hu, 2012). These business activities & social responsibility
motivate employees or encourage them to perform their best to achieve their targets, goals and
objectives. Task culture totally depend upon team work and its managers’ duty to make a proper
team for the completion of particular task. If TATA Steel company not done any operational or
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social activities than it will affect the worker's performance. Because they don't have any reason
to perform well in their filed if they not receive better in the return.
Role culture: - In the role culture environment, every individual perform their role &
responsibility according to their potential or skills. Such as educational qualification,
specialization and the personal interest of work in the organisation. In this type of culture, it
totally depends upon workers or employees to take any challenge or not. In the TATA Steel
business every employee performs their task with full of energy and they always ready to face
challenges. By providing various facilities to their staff members TATA fulfil their operational
and corporate social activities. Highly skilled person able to analyse opportunities for the
organisation as well as for the society (Lambert. and Sponem, 2012). Company build some of
plan or policy for the contribution in the society for their stakeholders. TATA Steel done few
corporate social activities in the field of education, health sectors, generate employment through
expansion of business, provide finance facilities to small business and effective program
regarding safety of nature. In the role culture environment highly skilled employees or other
internal stakeholders such as manger or BOD help the TATA company to deliver their corporate
responsibility to the society.
TATA Steel Europe successfully deliver their corporate responsibility to their
stakeholder. Internal stakeholder helps the organisation to achieve their task & business
objectives and external stakeholder help the organisation to grow or expand their business.
TATA company majorly focus on their consumer's demand and then encourage their employee
to fulfil the demand on customer. Organisation can sustain in the market because of their
stakeholders so it is important for the company to give them back in term or providing various
facilities. TATA provide better infrastructure to their employees, members or manager and other
benefits too (Moser and Martin, 2012). Also done various activities for the external stakeholders
such as medical, educational, employment and other social activities.
(D) Critically evaluate the balance scorecard concept and system which help the TATA Steel
Europe to identify performance or deliver to the corporate responsibility
This is balance scorecard of the TATA Steel Europe company which help the manager to
identify the performance and how they manager their resources and efforts (Balance Score Card.
2019).
Basis Goal Measure Targets Initiative
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Financial To increase their
profit margin
Increase the
profitability by
20%
Geographical
distribution.
Collaborate with
payment gateway to
make secure
payment.
Customer More focus on
consumer's
demand through
market analysis.
Diversified
customer base.
Construction,
Engineering,
Consumers goods
or Automation.
Increase marketing
efforts in the
railway, ship or
building industry.
Internal
business
process
To increase the
quality of
products.
Improve product
quality by using
TQM or statistical
tool.
Logistic, supply
chain, energy
efficiency, value
in use.
Adopt National
voluntary guidelines
to implement ethics,
transparency or
focus on
community.
Innovation
& Learning
Learn through
practices.
Provide proper
training to their
employees so they
can innovate new
things.
Support cutting
edge through
R&D in the steel
industry.
Company develop
improvement team
for regular
improvement.
Balance scorecard is the management system which helps organisation to prepare their
structural report which contain the different strategies or activities. Balance scorecard include the
goals, measures, targets and initiatives set by the organisation and identify the performance.
Manager of TATA Steel Europe company develop balance scorecard to measure the
performance through different perspective (Schläfke, Silvi and Möller, 2012).
Balance scorecard help the TATA steel company to build strategic planning, management
& communication system. These strategies align with the working environment, vision &
mission strategy, communicate with the external stakeholder and provide strategic objective with
resources. This scorecard method provides the strategic and operational information to TATA
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Steel for measuring their performance through different prospective such as financial, customer,
internal business process or learning & innovation.
TATA Steel Europe company can measure their worker's performance through four
perspectives and it will be discussed below:
Financial perspective: - TATA Steel company set a financial goal to increase their profit
margin and it can be done through various activities. By using product development strategy
company measure to increase their profit up to 20% in the next quarter after introducing
Metallurgy product in the existing market. Company choose the geographical area for the
segmentation and then targeting constructive, automotive, capital goods or infrastructure group.
It will generate revenue or capital employed of the company and for this TATA collaborate with
a particular payment gateway which help them to release payment to supplier. TATA Steel have
their goal to achieve maximum profit, growth of company and increase the value of stakeholders.
With the help of this organisation can focus on their corporate social responsibility and done
various activities such as education or health program which help the community to live healthy.
Company provide the financial help to small businessman & 75,000 new jobs under their CSR
activities which will increase the brand value or demand of newly developed product among the
customers.
Customer Perspective: - According to consumer’s perspective TATA have goal to focus
customer's demand through market research. For this company follow product development
strategy where they have to analyse or identity market requirement. After the analysis of market
and consumer's demand business develop a product in the existing market. Organisation measure
the performance through customer’s perspective and it will measure the diversification of
consumer base. After this, TATA targeting clients in the field of Automotive, construction,
capital goods etc. and take initiative by focusing railway, ship, defence industry etc. Company
majorly focus on their customers it will further help the organisation to fulfil their duty towards
their stakeholders through generating employment, campaign or digital programs (Watson,
2015). Company generate 75,000 new jobs under their CSR activities that will change the
consumer's perspective and these people surely make aware other people about their new product
development strategies. TATA Steel use the word of mouth strategy to promote their product
between the consumers.
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Internal business perspective: - In the TATA Steel company internal business process
set a goal to provide quality product to their consumers by using different measures such as Total
Quality of Management (TQM) or strategic tools. They targeting logistic or supply chain
management which help them to improve their product quality by following National Voluntary
Guidelines. Internal business perspective helps the TATA company to fulfil their business
strategy regarding product development. Quality product help the organisation to become
popular among the consumers so it is important for the company to focus on their product
quality. Company provide the better product or services to the society and satisfy their
stakeholders such as employee, suppliers, investors, consumers etc. TATA Steel company fulfil
their corporate social responsibility build schools for the primary education, provide free
medicines (Gates, Nicolas and Walker, 2012). These facilities used by the employee's family and
other people of the society who are not able to afford these things. With the help of developing
new product employees can provide quality products to their consumers as well as their external
stakeholder get the customer value proposition. TATA Steel done their CSR activities to satisfy
their stockholders such as employee, customers.
Innovation & Learning perspective: - According to innovation & learning perspective
TATA Steel have goal to learn through practising different ideas. It will be done by manager to
provide various training to their employees and they target the R&D department who analyse the
market and initiative taken by the manager to build proper team for improvement. It will help the
organisation to use various marketing practices which is beneficial for the business strategy of
TATA company that is product development (Yadav and Sagar, 2013). Company focus on
developing new product through market research and expand the business to launch in the
existing market. Manager of the TATA focuses on their stakeholder make them happy through
providing innovative and effective products & services. Organisation done various CSR
activities which help the community to grow in term of living, survive in the society or make
them efficient to become independent. Introduce new product in the society will increase the
employment as well as introduce new innovation which increase the interest of people to get the
knowledge about that.
Key barriers to the successful implementation of Balance Score Card (BSC):
Limited understanding of Balance scorecard: - Biggest barrier is the limited
understanding of balance scorecard to the organisation. Company may face difficulty to
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implement balance scorecard and how to measure performance. Most of the organisation
confused between the Key Performance Indicator or balance scorecard they think that both are
same. But BSC focus to develop financial or non financial performance and then measure it.
TATA Steel organisation need to provide proper understanding of balance scorecard otherwise it
will become barrier for the company.
Lack of knowledge and training: - It is the negative point which can create barrier for
the organisation due to lack of knowledge of training regarding measure the performance by
using balance scorecard. If manager is not able to identify or measure performance in effective
way so it will affect the promotion of a person which is going to delay or cancel. Because
management not able to measure employees’ performance in effective way. Employees not feel
motivated because they do not get any benefit to perform better in comparison to other. So
TATA Steel company required to provide proper educational training regarding how to measure
performance. If it is not done in proper way employees not give their 100 percent and company
not able to achieve their business goals & objectives (Kokubu and Kitada, 2015).
CONCLUSION
It has been concluded that, business strategies help the organisation to identify growth
opportunities and other factors which is beneficial for the business. By use of Ansoff matrix
business identify the potential area to develop their product or to expand their market to
introduce new products. Along with this organisation required to analyse internal as well as
external factors which affect the environment of business as well as employees’ performance. By
using Charles Handy theory company able to identify their organisation culture and its impact of
employees’ performance. Manager use the balance scorecard approach in their organisation to
identify the performance of an individual because it will help the business to achieve their
organisational goals & objectives.
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Online
Balance Score Card. 2019. [Online]. Available through:
<https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2>
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