SWOT Analysis of BSRM
A scan of the internal and external environment is an important part of the strategic planning
process. Environmental factors internal to the firm usually can be classified as strengths (S)
or weaknesses (W), and those external to the firm can be classified as opportunities (O) or
threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's resources and
capabilities to the competitive environment in which it operates. As such, it is instrumental in
strategy formulation and selection. The following diagram shows how a SWOT analysis fits
into an environmental scan:
STRENGTH:
Market leader: BSRM is the market leader in the steel Market of Bangladesh. They
occupy 12 % of the total steels market.
Great competitive skills: It has been working consistently in steel production sector. So it
has achieved great competitive skills. It has the ability to face strong competition.
Reliability: Be the preferred business partner of the customer and suppliers by offering
quality products; providing best and timely service before and after the business transaction.
Strong employee bonding and belongingness: BSRM Employees are one of the major
assets of the company. The employees of BSRM have a strong sense a commitment towards
organization and also feel proud and a sense of belongings towards BSRM. The strong
culture of BSRM is the main reason behind this strength.
Strong Marketing Lineup: BSRM has developed a sound and effective marketing policy
to share knowledge about their products with design engineers, thus creating more awareness
in the minds of the customers.
Strong Products Distribution Lineup: BSRM has appointed more than 300 dealers all
over the country so that people can get BSRM products within a reasonable time. Besides this
they have several sales and supply depots in Dhaka, Comilla, Borga, Shylet, and Khulna.
Modern Equipment & Technology: The BSRM Xtreme 500wproject has been
conceptualized by the German consultants Badische Stahl Engineering (BSE) and the
complete plant and machineries have been supplied by Danieli Group, Italy one of the three
largest suppliers of equipments and plants in metal industry worldwide. So it has the latest
and Modern equipment and Technology.
Backward-linkage industry: To strengthen the competitive advantage of the company
and to minimize the dependency on obtaining raw materials, BSRM Group has taken
initiative to establish the largest billet making plant in Bangladesh under the name of BSRM
Iron & Steel Co Ltd (BISCO).BSRM decided to take over the ownership of BISCO through
acquisition of 95% of its entire share holdings from their existing shareholders.
WEAKNESS
High interest rates decline profit: BSRM has a large lone from various bank and
financial institutes of Bangladesh. So the interest rates drop down the profits of the company.
Power Crises: In Bangladesh the power crisis is increasing day by day. As BSRM is a
heavy industry it needs lots of power supply and gas in daily production. As the government
is failed to make uninterruptable supply of power and gas the production is decline.
OPPORTUNITIES
Market Dominance: As BSRM occupies 12% of the steel market of Bangladesh and also
they are the market leader. So there is a good probability that they can dominate the market.
Moreover they are increasing their production from 375,000 M. Tons to 500,000. After the
expansion they can occupy 20 % of the local market.
International Scope: As BSRM is internationally renowned company so its have a
strong possibility to export steels product in near future.
Increased demand for the products: BSRM has a greater opportunity of profit as the
demand for the 500-grade rods increasing day by day in the local market.
Organizational Goal: The goal of the Company is to make life of the people securedand
safe by providing quality products at a cheaper price and to be a partner in thenation building
activities. As BSRM is the market leader they have to opportunity tofulfill there
organizational goal.
THREATS
New competitors: In recent days some new companies have started their steel production.
Among them AKS (Abul Khayer Steel) is one of them. They are targeting to produce 800,000
[Link] of steel per year. But now they are producing only 200,[Link].
Economic crisis:
World recession and the socio- political situation that prevailed in2008 in Bangladesh
stagnated all development works in the country. Then the sales of steel decrease to half due to
recession.
Growing Competition:
All the big steel producers of Bangladesh wish to increase their production capacity. If they
increase the production capacity then their production cost will decline. So competition will
also increase in the steel market.
Labor Unions: Labor unions are one of the emerging threats of Bangladesh now-a-days.
Power Crisis: Power crisis is increasing day by day and thats why the production of steel
in a decline position. For example Abul Khayer only can produce one forth of their
production capacities due to gas crisis.
