“How Should Posco-Ippc Increase Its Footprint in the Automobile Segment?

Business Management IA How should POSCO-IPPC ontogenesis its tone in the gondola segment? postdidate Name Amrit Shah Session no 002798011 School Symbiosis International School investigate intent decision maker summary 199 words Word Count 1977 Acknowledgements I would like to tell apart and thank * Mrs.Vaishali Phatak for her view as and assistance in athletic supportering me with this report * Mr. Bharat Indu Bhattacharya- galvanic poise Dept. Manager of POSCO-IPPC, Pvt. contain, Pune for his contri preciselyion to the report and his time for the interview. * Mr. Joseph Joe- locomote vane Dept. Manager of POSCO-IPPC, Pvt. Limited, Pune- for his contri scarcelyion to the report and his time for the interview. * Mr. Jacy Kim- universal Manager of POSCO-IPPC, Pvt. Limited, Pune- for al paltrying me to do this report on the bon ton and for providing guidance and help throughout.Executive Summary POSCO-IPPC, a brand distri hardlyor for the Korean telephoner POSCO take away plans astir(predicate) establishing themselves heavily in the Indian firebrand Industry arrive atn that they be facing consumer problems from their customers in the machine loadedament. As such(prenominal) this paper analyzes the oral sex, How should POSCO-IPPC increase its creationprint in the machine segment? Primarily, a explore question spicylights the rationale, theoretical framework, action plan and systemology applied and work fit constraints in answering the question.An Introduction enlightens us some the background and basic account related to the beau monde itself and of relevance to the question. Findings and epitome is written on the origination of primary sapidity comprehensive of multiple interviews conducted with antithetical managers and secondary investigate inclusive of harnesss concerning their expenses everyplace the future prospects by the simple machine sector manager that acted as a catalyst in evaluating using both pecuniary (capacity utilization and decision tree) and non- pecuniary methods(SWOT & swearing).The report primary(prenominal)ly focuses on the problem of vulgar solid which POSCO-IPPC is currently facing callable to which they argon non able to meet the increasing demand. Based on the query conducted, it is found that POSCO-IPPC has cardinal wefts to overcome this problem. One that it could ask POSCO, Korea to supply them with great fresh solid and the different that it could ask POSCO, Orissa, a manufacturing unit of measurement to supply them with nude substantive. These options stomach been evaluated keeping in mind the conditions to find out the nigh practicable option to give a strong mop up. feasible solutions ar discussed and the conclusion suggests that POSCO-IPPC in come in to sustain itself in the Indian Steel grocery store needs to increase its take and using the financial and non-financial techniques discussed and the best viab1e option would be to increase its raw poppycock supply from POSCO, Korea. Contents Acknowledgements2 Executive Summary 3 inquiry Proposal.. Introduction 8 Procedure/ Methodology 9 Main Results and Finding . 10 synopsis/military rating 12 Conclusions and Recommendations 16 Bibliography 17 addendum 18 Research Proposal Research Question How to increase POSCO-IPPC footprint in the Automobile segment? RationalePOSCO-IPPC, a distri only whenion sum descend of Koreas POSCO Steel Company, is a newbie in the Indian Steel market they withstand a monopoly in the Electric brand name market and they atomic number 18 under discharge problems in the Automobile sector so they should work on capturing much consumers in the Automobile sector so that they are able to stabilize themselves. The explore question focuses on the ways POSCO-IPPC should apply to set its footprint in the car segment. Theoretical FrameworkMy plan is to utilize both financial and non-financial techniques to evaluate the problems incurred by the management so that they are able to hard establish themselves in the auto sector. The report provide analyse the problems faced, on that pointof it allow try to solve it using the financial techniques of readiness custom and Decision Tree and non-financial techniques of SWOT and PEST which volition analyse the a nonher(prenominal) problems, opportunities and threats. mention Areas of Syllabus social unit 4 trading operations management Decisions * Introducing Operations Management Improving operational efficiency Capacity, Scale of work Unit 6 Nume assess techniques for business studies * Information for decision making autochthonic Research * query with Electronic Steel manager Mr. Sharad Indu Bhattacharya regarding the company history, company spot, market and other general aspects about the companys functional. * hearing with Automobile Steel manager Mr. Joseph Joe regarding the market stats in Automobile sector, drawbacks, problems a nd realistic implications so as to understand their market in the Automobile sector. petty(a) Research * Some Information and the list of customers of POSCO-IPPC, Pune, India received through mail from Mr. Joseph. * Other background history of POSCO, Korea employ and other facts and figures were taken from the internet. Possible Problems Solutions Managers were non able to understand the true purpose of the interview resulting in very compact answers. Managers were asked questions in a very narrow placement which narrowed down to minute details. Responses from the managers were related to hardly their departments, unable to give a general view. Requested them to get information from other managers as vigorous. Small interview with a employee and the production manager. Limited access to elaborate information on the customers and the company as the locations are very faraway and detail information is confidential. Acknowledged in the conclusion. Financial Data was expres s mail to a great extent as it was a new company and Data was up to now not published. Estimates afford been taken and where estimates could not be taken, it has been described in words. doing Plan Date Task eighteenth noble, 2008. Talked on phone with Mr.Jacy Kim who agreed to let me do my project on the company. 20th August, 2008. Will take an wonder with Mr. Bharat Indu BhattacharyaWill take an interview of Mr. Joseph Joe Research Question formulated. 22nd August, 2008. Planning get out be done as to the way this essay needs to go about. Introduction and Research Proposal will be written. 30th August, 2008. Data Collection should be done. fifth September, 2009. Main results and findings will be written down establish on the information gathered from Mr. Bharat Indu Bhattacharya and Mr. Joseph Joe over the days. 13th September, 2009. summary of the selective information will be done. 14th September, 2009. Techniques of Capacity custom and Decision Tree wil l be applied. Will make a SWOT and PEST compend. analytic thinking to be completed. 15th January, 2009. Recommendations written. Appendices made and attached. 16th January, 2009. Executive summary, content page, Action plan Introduction POSCO-India Pune Processing Centre Co. Ltd. , established in August 2006 exactly started its technicalized distribution in 2006, and is a mellowedly accept by all the major companies of India for its great woodland of its poise.Although universe a newcomer in the Indian Steel Market, it has set its footprint as a Quality and principle based company. POSCO-IPPC is a bowl centre for the Korean Steel giant POSCO Steel Limited which is a globular progress tor of crude mark and finished stain goods. POSCO-IPPC mired an enthronement of 15 million dollars. It is an independent company of its own as it is a joint venture of POSCO (holding 65% of shares. ) and LG (holding 35% of shares. ) POSCO-IPPC is a processing unit which is locally managed. It is a processor-cum-distributor of steel in the electronic and automobile segment.It only plays a small role of slitting and shearing of the raw material as a processor. Its getup is 10,000 mensural gobs per calendar month with an annual dollar volume of 320 Crores in the previous financial form. It employs 120 people as its working staff out of which 60 are employed as give inroll department workers and other 60 are in contract. With the import costs and duties of steel and being a newbie in the Indian Steel market, it is facing aspiration from other distributors like ESSAR, TATA STEEL, JINDAL and other Chinese and Russian companies.In the Automobile sector, there are numerous problems created collect to its gamey cultivate scathe and pretermit of production compared to that in the electronic steel sector for it holds monopoly in the sector for many an(prenominal) of its products. As the management is upliftedly equipped in its factors of production, i t is researching on ways to exploit the Automobile market in order to firmly establish itself in the country. Therefore this report focuses on- How should POSCO-IPPC increase its footprint in the Automobile segment? Procedure/Methodology The Initial research include a detailed interview about the company and its standings with Mr.Bhattacharya-Electronic Steel manager. another(prenominal) interview was with the Automobile Steel manager- Mr. Joseph Joe about the Automobile sector inclusive of the discussion over the problem mentioned in the research question. Underlining the major aspects in the interview, the questions focused on POSCO-IPPCs strength, standings in the market, internal and external factors packd for and against production (which created the PEST, SWOT analysis and information for the analysis), and financial status and estimations advising financial techniques to be applied ( Capacity utilization and Decision Tree. The secondary research resulted in analyzing of POS CO Steels information and accessing other reports, industry statistics, market information and data via numerous internet sites. This helped in the results and findings, in strengthen the information available and recommendations and conclusions. It should be noted however, that financial data self-collected is based upon both actual and estimates, which need further validation. In addition, the rigor of this report may be influenced by the probable subjectivity of well-nigh financial data given confidentially issues.Main results and Findings POSCO-IPPC Private Limited is a adjunct of POSCO, the worldsfourth largest steel producer and one of the most competitive steel companies (World Steel Dynamics 2006) whose products are shipped to over 60 countries around the globe. Aside from this unit, POSCO has in addition invested 12 billion USD in Orissa which is proposed to produce an output of 12 million ton per annum by 2010. Since 1990, more than Rs 19,000 crores (US$ 4470. 58 mi llion) has been invested in the steel industry of India and there is an increasing trend in its production. See escort 1) The auto component sector has also post signifi tidy sumt growth of 20 per cent in 2003-04, to achieve a sales turnover of Rs. 30,640 crore (US$ 6. 7 billion)(See Figure 2). Such opportunities in the automobile sector and the Indian economy ignore help POSCO-IPPC to establish itself firmly. In terms of current market position, POSCO-IPPC brands itself as a put acrossing provider of electric steel in some of the areas in India for not many of the companies have explored the electric steel market.Being a newcomer, it plans to inhabit the automobile steel market, where it still hasnt managed to set its foot firmly. The company is based upon certain policies and factors which many of the customers are unable to comply with. POSCO is a world-wide player and it supplies and manufactures steel all over the world. It exports steel from South Korea at an internationa l price which is comparatively high in Indian silver so this difference among the prices, leads to a high price supercharged by the company.Due to the high price, POSCO decided to put a circumscribed price (Rs 49000- nippy rolled steel) to fit in the market but in switch over for lower supply of steel so this debases the supply advocator of POSCO-IPPC. POSCO-IPPC is only a distribution centre and does not manufacture. It is a market-oriented firm and follows the concept of mass customization for it creates the output maintaining to different customers need. It slits and crop steel depending upon the customers want. Its main customers are Crompton, LG and Suzlon in the electrics sector and Tata and Bajaj in the automobile sector.It uses batch production to produce an output of 10,000 metric unit scads per year where 1. 5% of the raw-material is wasted in slitting and shearing. The demand for their steel is a take higher than their output and their capacity is also higher ( 35,000 metric tons/year) but the lack of raw-material limits them, due to the special price-low supply factor. Instead of creating more output, their machines are doing job work for other competitors like JINDAL, ESSAR, etc. of 5000 metric tons monthly. Highlighting the difficulty suffered in the case of TATA MOTORS Pvt.Limited count Requirement of TATA 30,000 (Demand going up by 7-10% annually) TATAs demand from POSCO (for high quality steel) 5000-7000 POSCO-IPPCs Supply to TATA 2000-2500 (Rest to be supplied to other customers. ) POSCO-IPPCs heatless Rolled Steel Price at the market Rs. 53-55000 TATAs pay price to POSCO Rs. 48000 (All figures are in metric tons/month) psychoanalysis/Evaluation The evaluation of different problems which cause hobbles in trade with other companies will be done with the help of certain financial and non-financial techniques. Financial AnalysisI. Capacity Utilization With the purpose of utilizing its capital to the fullest, POSCO-IPPC has devil pathways in order to supply more in the steel market and set its foot strongly a) acquiring more raw-materials from POSCO, Korea. b) purchase of raw-material from POSCO manufacturing unit at Orissa, India. Thus, we will analyze the present scenario of capacity utilization in compared with the two options mentioned above. give up Capacity Utilization scenario The capital utilization is calculated in percent and the formulae used for it is given below Output level best capacity? 00 Current Output ten thousand metric tons/ month. Maximum Capacity 11250 metric tons/ month. Capacity Utilization = 1000011250? 100 = 88. 89% Option a) acquiring more raw-materials from POSCO, Korea Estimated output 11250 metric tons/ month Maximum capacity 11250 metric tons/ month Capacity Utilization = 1125011250? 100 = 100% Option b) Purchasing of raw-material from POSCO manufacturing branch at Orissa in India Estimated Output 11250 metric tons/ month Maximum Capacity 11250 metric tons/ month Ca pacity Utilization = 1125011250? 100 = 100% II. Decision TreeUtilizing this approach for both the options and other decisions to be made by the company are evaluated and financially practicable decisions are suggested. (Figure 1) (All money rates are in Indian Rupees) Key Decision square Chance node Calculations (611. 105mn ? 0. 6) + (466. 07mn ? 0. 4) 500mn = 53. 091mn INR (572. 88 ? 0. 3) + (491. 04 ? 0. 7) 500mn = 15. 592mn INR Non-financial analysis India has departed through a great change in the production and economic consumption of Steel in the past 10 years.Driven a stentorian economy and concomitant demand levels, consumption of steel has grown by 12. 5 per cent during the last three years it has been forecast that the apparent steel use point in India will increase by 11. 8 per cent in 2008. POSCO-IPPC has great opportunities to set their foot firmly in the Automobile sector. The POSCO steel plant is Indias single largest unknow investment project ever. For its part, the Indian government is eager to boost its steel production and attract more opposed investment through such a lucrative partnership.But it also may lead to check of foreign ownership and application of protectionism to prevent foreign investment from particular(a) its levels. Technology level in POSCO-IPPC is of high standards and helps them with maintaining the quality. The machines brought in are merchandise but India is a developing county and it has certain problems of electricity which results in steadfast power-cuts causing hindrances in processing of steel. These load-shedding periods are often covered by the use of generators but these generators prove to be expensive.The steel being merchandise is affected by any change in the foreign convert policies and any government/fiscal policies which may affect them. POSCO-IPPC being a new-comer may feel threatened by the presence of multi-national companies as it leads to greater competition and more exploitation of resources. Conclusions and Recommendations Available managements erudition on the opportunities to establish themselves in the Steel Industry, it does appear that the management should research this further by the help of a market research and research on all of the customer needs.Analysing the written report on the priming of the data supplied, it appears that POSCO-IPPCs only hindrance is its limitation of supply which if work will solve many of their other problems. Using Capacity practice and Decision tree, it was understood that if maximum capacity utilisation takes place, it will reduce the price increase the output increasing the output will lead to long term relationships with the customers it will involve maximum utilisation of resources. Maximum capacity utilisation is only possible with the increase in output which can be only done by increase in the supply of steel.There had been two options discussed with the help of decision tree to look for the best and cheapest w ay to increase the supply by deciding upon the source. The analysis showed that purchasing from POSCO, Korea at the special price is more profitable (53. 091mn INR) but this is only possible if POSCO, Korea agrees to supply them at the special price. The second possible option was from purchasing steel from the other branch of POSCO at Orissa, India but this would prove less profitable (15. 592mn INR) as they would sell it at the exchange price in order to save their profits.Other factors which tend to support POSCO-IPPC to set its foot in the Automobile sector include in the non-financial analysis growing Indian economy and its Steel Industry grown medication support Great Quality Steel modern technology used with strict disciplinary issues which makes them a good supplier. Recommendations As such, my recommendations would be * vouch further research in terms of specific of customer requirements and problems, by performing a market research and research on the clients, as many of my findings are generic to the companys knowledge. More accurately determine the precise nature of the costs and profits upon purchasing steel from the sources analyzed in the written report. * Embark upon extensive research as to search other ways to increase the output and also beg POSCO, Korea to supply more at the special price. However, my analysis is limited it does not cover all the aspects of this topic due to the restraints of the data supplied. The research was not more extensive because the unit was far away and many meetings were not possible with the officials as this would interrupt in their work .With only two personnel interviewed, a wider perspective from other departments must also be obtained . The report is a reference material, the research can be more extensive and proper results can be achieved if access to more data was possible. The Report is still in progress there are many issues which need to be solved which can be done with the help of the recommend ations and more access. Bibliography Books AS Level and A level Business Studies, motherfucker Simpson, Cambridge University Press, Cambridge, 2002, Websites http//www. stratfor. com/analysis/india_poscos_steel_investment_challenge Steel, India Brand Equity Fund, http//www. bef. org/industry/steel. aspx India Steel Industry, deliverance Watch, http//www. economywatch. com/india-steel-industry/ India Automobile Industry, scrimping Watch, http//www. economywatch. com/business-and-economy/automobile-industry. html Corporate overview, POSCO-INDIA, http//posco-india. com/website/company/corporate-overview. htm APPENDIX * vermiform process 1 Interview counterpart with Mr. Bharat Indu BhattaCharya * Appendix 1 Interview Transcript with Mr. Joseph Joe * Appendix 3 SWOT Analysis * Appendix 4 PEST Analysis * Appendix 5 Graphs * Appendix 6 Mail from Mr. Joseph Joe Appendix 1 Interview Transcript with Mr.Bharat Indu Bhatta Charya, Electric Steel Dept. Manager of POSCO-IPPC, Pvt. Limited, P une 1) Good Afternoon, Could you satisfy enlighten us about your company? * Good Afternoon, POSCO-IPPC stands for POSCO India Pune Processing Unit. We are situated in the Talegaon Horticulture and Industrial Park in the dist. Of Pune. POSCO-IPPC is a paradiddle centre as known by its parent company POSCO, which is a steel manufacturer giant in South Korea. It is the fourth largest producer of steel in the world and its distributors and manufacturing units are spread all over the world.From the start of this company to the present date, POSCO has led to massive advancements in the socio-economic status of South Korea. Coming back to POSCOs investment in India, this is POSCOs third investment, the other two being in Delhi and Orissa. Although POSCO is POSCO-IPPCs main investor but it is an independent company which is locally managed. POSCO entering in a new market planned to establish this processing unit as a joint venture with LG International, where POSCO has 65% of shares and LG international owns the rest 35%.A total 15 million $ was invested in this project and it commercial processing started in 2006. 2) Can you emphasize more on your commercial processing and the working of this unit? * POSCO-IPPC processes the raw material which comes from POSCO, South Korea and distributes it to the customers. By processing, we mean the steel which comes from POSCO is slatted and sheared according to the customers need. We receive our steel in the form of coils, this is one reason for our being known as coil centre, then the coil is put in a machine which slits and shears it based on the dimensions set.This is then packed and sent to the respective customers. Our major customers are Crompton, LG, Suzlon, TATA and Bajaj. Our company produces output for electric steel as well as automobile steel. Although in the electric steel market, we hold a monopoly but in automobile, we are yet to expand our approach. These are the different types of steel we produce Electric St eel * CRGNO- refrigerant Rolled texture Oriented Steel * CRNO- Cold Rolled Non-Grained Steel Automobile Steel * HR PO- Hot Rolled and Pickled Oiled Steel Cold Rolled Steel * Stainless Steel White Goods * Electro-Galvanised Steel We have 120 people as staff, out of which 60 are on payroll and 60 are on contract. We follow the batch production for our processing unit. Our output is 10,000 metric tons / month with an annual turnover of 320 Crores as of last year. The raw material which comes to us, we add a value addition of 10% and sell it in the market. Our capacity to produce is 135,000 metric tons per annum where as its output is low because of the lack of raw material so the capacity utilization is not up to the mark.So to involve our other machinery, we do job work for other companies of 5000 metric tons. 3) Can you please tell me about the managers of this company? * The managers at all the star(p) posts in the company are all from South Korea and they have been appoint b y POSCO for a fixed period of years for a sinless start in the Indian Steel market. These are very see and are strict followers of discipline and quality. The work at POSCO-IPPC is cost-effective and advancing due to these managers. These are * Gil Ho Bang Managing Director Jongyeol Her General Manager * Jung Chule Kim General Manager * Woon Tae Jung General Manager 4) Can you please tell us about the difficulties you are facing as a new company in the Indian Steel market? * We have a monopoly many in the market for Electric steel so we dont have any problems in that sector but in the automobile sector, our competitors are well established and they have a far greater market share than POSCO-IPPC in the market so it creates pressure on us to create our product better than theirs to occlusion in the market.Our competitors TATA STEEL, JINDAL, ESSAR, ISPAT and other Chinese and Russian companies. The two main difficulties which our company is facing are * There has been a Star R ating which the Indian Government has started on the electric appliances. This effect of BAE Star Rating on the consumption of Electric Steel. * The Automobile sector in India is booming and has a lot of scope so POSCO-IPPC is trying to increase its footprint in the Automobile steel segment. There is a lot of demand for POSCOs quality steel in the Automobile sector. 5) What is your SWOT? SWOT chroma * Any downfalls can be support by POSCO-Distribution of quality steel Inherits a quality name in the market from POSCO- Maintains strict disciplinary levels- Market leader in Electric Steel- Demand for its quality steel in the Automobile sector-Machinery is very advanced and the labour employed are few but skilled. Weaknesses * Not enough raw materials-Is not yet able to firm its stand in the Steel market-The high price of their product due to the currency of Korea being more powerful lyric/ Cultural gap amidst India and Korea. Opportunities To increase its output and meet the high demand Lack of high quality steel in the Automobile market gives them a big opportunity India encouraging foreign investments- increase International trade between the countries- Rate of high economic and the countrys economy gradually increasing- Special Reduced Price for the steel. Threats * Price of the raw material is highly dependent on the foreign exchange POSCO holding a small share in the market is comparatively smaller than its multi-national counter split -Low output due to lack of raw materials which may result in the dismission of customers and a long term relationship.Appendix 2 Interview Transcript with Mr. Joseph Joe, Automobile Steel Dept. Manager of POSCO-IPPC, Pvt. Limited, Pune 1) Good Afternoon, What can you tell me about POSCO-IPPC in relevance to the Automobile market? Good Afternoon, POSCO-IPPC is a subsidiary of POSCO which as you know is a global producer and distributor of high quality steel. So as its parent company, POSCO-IPPC is also known for its hi gh quality in the Indian Steel market.Automobile Company requires high quality steel for the chassis parts of the automobile, usually such parts are imported or substitute quality steel is bought so due to the lack of high quality steel producers in India, there is a lot of demand for the emerging POSCO-IPPCs Steel. Though POSCO-IPPC has so many opportunities to set itself firmly in the market, it has many hindrances preventing it from doing so. 2) Can you pleases talk of the town about the hindrances in little more detail? * There are many factors which sum up to conclude as a hindrance for POSCO-IPPC.The major ones are * High cost of POSCO-IPPCs Steel leads to a discouragement to the Indian customers. * POSCO-IPPC is looking for big customers so they are able to establish themselves by directly targeting at the higher end. * POSCO-IPPC is strict in its payment dates which are not favoured by all its customers for they need a margin to settle their accounts. * Although the main pr oblem is the lack of raw material from POSCO. Due to the Special price-low supply condition between POSCO and POSCO-IPPC, there is low supply of raw materials.The demand is high for POSCO-IPPCs steel but due to low output, it cannot adhere to every customers needs. POSCO-IPPC is up to(p) to produce more output than its current production but due to the lack of raw material, it has to restrain itself and do job production. * POSCO-IPPCs customers stockpile a same price and supply surety for three months which is not possible for POSCO-IPPC as it imports its raw material and it is subject to foreign exchange policies and other government policies which affects its price.The supply surety cannot be given due to lack of supply of raw material. * Also the defaulting of POSCO-IPPCs price and bargain to pay less price by the customers is discouraging POSCO-IPPC to expand itself so quickly as they are losing on their profits. * But overall, the lack of raw material is a big issue and sol ving that issue can solve many other problems related and in the course of time, festive movements of trade will solve other problems too. 3) What can you tell about the special price-low supply condition? POSCO is a global player and it distributes its steel at a common international price (Rs 59000) to the world but as that rate is very high in terms of Indian currency, it would not settle down in the Indian market so in order to satisfy its Indian customers, it reduced the price and this is known as special price (Rs 45000). But as POSCO reduced the rate for POSCO-IPPC, it only did this for a condition and this condition was that POSCO-IPPC will receive only a limited supply from POSCO, Korea. ) Since TATA is one of your major customers in the automobile segment, can you please put light on the companys relationship with TATA? * Sure, TATA Motors is a major customer of ours and there is a considerable amount of dealings with TATA. Tata itself produces steel but is partly depende nt on POSCO-IPPC for high quality steel for the chassis of their automobiles. They need good quality for the outer body of the car for it to be firm and more engaging for which they take the support of POSCO-IPPC.Tata requires 30,000 metric tons/month and the demand is going up by 7-10% / year. Tata demands 5000-7000 metric tons/month from POSCO-IPPC but it can only supply 2000-2500 metric tons/month to TATA for out of its total output, it also needs to supply to other customers in order to continue in the market and also to stabilize it. The customers in the market are also asking for POSCO-IPPCs steel like General Motors, Volkswagen and Fiat. For which TATA has supported POSCO-IPPC in sending a petition to POSCO to supply more steel.POSCO-IPPC distributes cold rolled steel in the open market at Rs 53-55000 the price keeps on fluctuating, whereas TATA gets it at Rs 48,000 (maximum. ) Thus, such factors are creating hindrances in transaction between TATA and POSCO-IPPC. 5) What is your PEST? * PEST POLITICAL & LEGAL * Central Government encourages the foreign investment- Change in the central Government may result in change in different trade policies Indian Economy has shown comparatively high levels of development, stability and potential growth. -Korea having a high level of percent of investment in the Indian marketEconomical * Indian Economy is booming-Growth in its GDP and economic growth-Fluctuations in the exchange rates -Social ties and contacts between India and China is increasing-Expansion of a basic industry is always favoured- Company also gives importance to maximum exploitation of resources. Social * Opened a school for the children of its workers- Helped to develop the village Talegaon -Increase in the capacity of the unit, there will be more employment in the area-Adapt the Indian Culture-It believes in job satisfaction and motivation of its staffTechnical * POSCO-IPPC uses advance technology to process its raw material-High dependency o n technology-India is a developing country where there is a great problem with electricity so load shedding takes place-Alternative method to use generators during the time of load shedding proves expensive-Supply of diesel in such large quality proves to be a negative factor. Appendix 3 POSCO-IPPC SWOT Analysis Appendix 5 Graphs Figure 1 Figure 2 Appendix 6 Mail from Joseph Joe This was a mail from Mr.Joseph Joe giving out some information. Investment 500 mn INR Probability oddment Source Company Cost Price/ metric ton exchange Price/ metric ton Quantity Purchased and sold Total receipts 0. 6 Special Price POSCO, Korea Rs 45000 Rs 55000 11111 611. 105 mn INR 0. 4 No Special Price POSCO, Korea Rs 59000 Rs 55000 8474 466. 07 mn INR 0. 3 Wihtout O. H. E POSCO, Orissa Rs 48,000 Rs 55000 10416 572. 88 mn INR 0. With O. H. E POSCO, Orissa Rs 56000 Rs 55000 8928 491. 04 mn INR 2 . summons to Appendix 1 Interview with Mr. Bha ttacharya 3 . strike to Appendix 1 Interview with Mr. Bhattacharya 4 . Refer to Appendix 1 Interview with Mr. Bhattacharya 5 . POSCO-INDIA, corporate overview, http//posco-india. com/website/company/corporate-overview. htm. (20th September, 2008. ) 6 . Refer to Appendix 5- Graphs 7 . Economy Watch, India Steel Industry, http//www. conomywatch. com/india-steel-industry/, (20th September, 2008. ) 8 . Economy Watch, India Automobile Industry, http//www. economywatch. com/business-and-economy/automobile-industry. html, (23rd September, 2008. ) 9 . Refer to Appendix 5- Graphs 10 . Refer to Appendix 2 Interview with Mr. Joseph Joe 11 . Refer to Appendix 1 Interview with Mr. Bharat Indu Bhattacharya 12 . Refer to Appendix 2 Interview with Mr. Joseph Joe 13 . Refer to Appendix 1 Interview with Mr. Bharat Indu Bhattacharya 14 .Refer to Appendix 6 Mail received from Mr. Joseph Joe 15 . India Brand Equity Fund, Steel, http//www. ibef. org/industry/steel. aspx (3rd August, 2008. ) 16 . SWOT Analysis 17 . PEST Analysis 18 . http//www. stratfor. com/analysis/india_poscos_steel_investment_challenge 19 . PEST Analysis 20 . SWOT Analysis 21 . PEST Analysis 22 . SWOT Analysis 23 . PEST Analysis 24 . http//www. economywatch. com/business-and-economy/steel-industry. html 25 . http//www. economywatch. com/business-and-economy/automobile-industry. html