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PEST Analysis: Pest Analysis Of Tata Steel

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Analysis of Tata Steel

Tata Steel, established in 1907, is one of the world’s most geographically diversified steel producers, with operations in 26 countries and commercial offices in over 35 countries. Tata Steel, part of the Tata group, based in Mumbai, has exploits in various categories including tea, automobiles, communications, power and salt. It is estimated that the Tata Steel group produces 31million tonnes of Steel per year. Tata steel is the second largest steel producer in Europe, with the level of global steel production currently over 1bn tonnes, which is expected to increase to 1.5bn tonnes by 2015-2020. To expand from India into the global marketplace Tata Steel has made numerous acquisitions including Millennium Steel in 2005, Nat steel in 2004, and Corus Steel in 2007. Tata
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As part of their business expansion, Tata Steel made some high risk investments in countries such as Bangladesh, Iran. For example: the plan set up in the Bangladesh is getting delayed by the question of gas supply, whereas the issue of lease of the mining of the iron ore in the Iran country is responsible for the increase in the cost of the production.
2. By improving the infrastructure of the country, Tata Steel and other steel companies can save some amount, as they spend huge amounts on the freight and transportation.
3. There are no quantitative restrictions on import of iron and steel items. The only mechanism regulating the imports is the tariff mechanism .Advance Licensing Scheme allows duty free import of raw materials for exports. Iron and Steel industry has been included in the list of `high priority' industries for automatic approval for foreign equity investment up to 100%. Price and distribution of steel were deregulated from January 1992.
4. The government acts as a resource allocator (the mining policies of the Government), as Competitor (the public sector steel companies) and as Regulator to TATA Steel.
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