Comparative Analysis of Cost Leadership Strategies in the Indian Steel Industry: Case Study of SAIL

Abstract

This study is intended to analyze the Indian Steel Industry from the purview of Cost Leadership and draw a comparison between Six Major Steel producing companies operating from India, viz, Steel Authority of India Limited (SAIL), Tata Steel, JSW Steel, Bhushan Steel, Jindal Stainless and Uttam Value Stainless. Analytical study from numerous relevant sources were accompanied by field survey. The company in focus for the survey phase was Steel Authority of India Limited (SAIL). The survey was conducted based on close ended questionnaires to almost all relevant stakeholders of the organisation. The respondent set was further classified into seven groups of stakeholders, viz, Employees of SAIL in the Senior Non-Executive Grade, especially ones who have been received Shram Award and/or Vishwakarma Rashtriya Puraskar, Employees of SAIL in E1-E5 Grade, i.e. Junior and Middle Level Executives, Employees of SAIL in Grade E6 and Above, i.e. Senior Level Executives, Contractors having tie-ups with SAIL, Sellers of SAIL products, Technology Partners of SAIL, Other Steel Companies and Competitors of SAIL. Analytical research was done based on data from Capitaline Corporate Database and Self calculations for the aforementioned six companies based on a set of variables deemed to affect Cost Leadership strategies. They are Net Sales (NS),Adjusted Net Profit (ANP),APATM (Adjusted profit after tax margin), R & D expenses (R & D), Assets Turnover(AT), RONOA (Return on Net Operating Assets), PBIDTM (%), MS (Market Share),Cost of Production(COP).The survey questionnaires were designed based on a modification of the Likert Scale and acquiescence bias was nullified as par as practicable.