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 of commitment towards organization and also feel proud and a sense of belonging

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 500w”project 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 occupy 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 secured and safe by providing quality products at a cheaper price and to be a partner in the nation building activities. As BSRM is the market leader they have to opportunity to fulfill 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 M.Tons of steel per year. But now they are producing only 200,000 M.Tons.

Economic crisis: World recession and the socio- political situation that prevailed in 2008 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 that’s why the production

of steel in a decline position. For example Abul Khayer only can produce one forth of their production capacity due to gas crisis.