Analysis of steel global Industry

PESTEL Analysis
Political

        Government of Oman has approved form the National steel policy in 2017 that is target around about 300 million tones steel making for which has capacity 160kg per capita of the steel consumption by 2030.

        Political stability is essential for any business or organization. Instability in political conditions has a huge impact on the success and performance of the business. However, in the US political system is quite strong and political stability exists. It means that political factors are in favour of the Steel global industry. Moreover, the barriers to entry in the online grocery market are low which means that business can easily enter into the online grocery market and gain significant market share.

Economical

The steel sector provides the 20 lacs jobs in a country as well as it contributes around about 2% of GDP nation.

Government of the Oman which is allowed 100% cent for the foreign direct investment in the steel sector.

        The economic factors have a significant impact on the business. The change in the economic environment will not have a major impact on business because currently, it will serve the US which has a strong economy and minor economic shocks do not cause any huge difference.

Social

        To improve the quality of life for the communities, the steel industry should strive, and it is also served by the excellence of all the facets with its activities.

For promoting the safety consciousness between all the employees, the company will give continuous training.

        Understanding consumer behaviour is important before launching the business because the consumer is the one who generates sales for the corporation or business. The Steel global industry has performed consumer analysis before launching the business. The analysis has shown that the online steel business has become quite popular with customers. Therefore, social factors are also in favour of the business.

Technological

        For the development as well as the production of a technological product the steel company would be encouraged because it has a strategic joint venture.

To develop fewer resources intensive in a country the ministry would encourage the research institutes.   

        The technological factor is such a factor which keeps on changing, and businesses have to adapt themselves according to the latest technologies. If the businesses do not use the latest technology, then they will lose a competitive edge over their competitors. The technological factor will affect the steel sector as well. That is why the business will use the latest software and equipment to give a tough time to competitors. Also, the business will keep on upgrading its website.

Legal

Rules, as well as incentives, are for special health that is introduced to the steel industry.

        The Government of any country is responsible for making rules and regulations for the businesses so that they can work according to the standards. The Government rules are in favour of the steel sector business; it means the legal factors will not have a negative impact on the business. However, the company has to provide such products to the customers who are according to safety standard; otherwise, the authorities might take action (RBSA Advisors, 2018).

Environmental

            Maintain, install, as well as operate the facilities for the steel company that is applicable for the statues along with the environmental laws plus the regulations.

        The global steel industry minimize the waste process along with recovery and promote the recycling materials to control the pollution (Agarwal, 2017).  

        The business has to provide such products which do not harm the environment. The company current products are food items which means that the company will not provide much harm to the environment. However, the packaging in the steel sector that will be available in the physical store can harm the environment.

  Porter's 5 forces

The threat of new Entry

It is dependent on the barriers for the entry like as;

Experience and the Economic Scale

Capital requirement of entry

With suppliers and consumer strength of the established relationship

        The threats of the new entry in the steel sector are relatively high. The online retail market is growing therefore many businesses are entering into the online retail industry. The growth provides the opportunity for each business to determine their market share.  It means that the threat of new entry exists which can limit the company's market share. Moreover, the company does not need much cost advantages to set up a business.

        The threat of new entrant by existing impediments to entry, for instance, the staple market of Oligopolistic transcendence. A strong brand name and 'steadiness designs', for instance, Steel sector Club Card 'secure' of existing can make dedication to customers and debilitate new members. Regardless, far-reaching cash related impact in light of Steel industry and brand affirmation, it demonstrates a threat to various associations. By the number of the oversea acquisitions, several is developed the international strategy in the blooming years until the recession of 2008.  In Oman the steel industry is the upswing due to the strong global along with the domestic demand.

Bargaining power of the buyer

Buyer power for the analysis of the steel global industry is that;

Concentration of buyers

Switching cost is low

        Buyer’s power will be moderate because the online market is expanding and customers do not buy goods on a huge amount. The size of the online or steel sector market is also not that big. Moreover, the switching cost is low, and buyers can easily look for another online products seller if they are not satisfied with the Global steel industry.

        With no clear disciplines, Buyer control is high because of the limit of customers having the ability to switch, and with the movement of adaptable advancement, customers approach information immediately enabling them to settle on more decision that is taught and seeking out the best courses of action.

Bargaining power of the Supplier

The supplier concentration is supplying the differentiated products

Have various small buyers

Cost of switching is high

            The business is in its development phase and its needs suppliers to perform its business operations. The services this business is providing not unique therefore the bargaining power of supplier will be high at least in the beginning. The company has not established any relationship with the supplier. Therefore, it is obvious that the supplier will be in power.

        For the organization, there are minimum trading disciplines Steel sector has different suppliers. To improve its operational net incomes industry of steel has a reputation of misusing its ability to put off a portion to suppliers remembering the ultimate objective.

The threat of Substitute products

Need of substitutions

Product substitutions

        The threat of substitute products and services is high because there are businesses which are providing online products. The competitors such as my home grocers, Amazon Fresh, Walmart and Fresh direct provide somewhat the same products and services. It means that the customers can shift to either of these companies if they are not satisfied with Steel Global industry (deloitte, 2019).

There is always a threat of substitution for the Steel Sector. For nourishment things as well as the threat of replacement is high. Accommodation store of little chains as well as natural shop represents the danger to the company as if Steel industry.

Rivalry between competitors

Have low entry of barriers

Substitute for threatening

Supplier as well as buyer exercise control

            The rivalry between the competitors is moderate to high. There are many customers who are loyal customers of huge organizations such as Amazon which intensify the rivalry. The established businesses provide high-quality products due to which the customers have become loyal. The small online retailers do not provide that much higher quality and the difference exists between the services as well.

SWOT analysis Steel Global industry

            The steel industry has the business for the internal position as well as external environment that help to identify the existing organization which is following the strength, weakness, opportunities as well as threats (Gupta, 2016).

Strengths

Raw material availability

At low wage availability of labour

Quality of Manpower The abundance of mineral for steel and iron ore

Shipping system as well as developed transport  

            The Steel industry implements the latest software and equipment in the business which is a strength of the business. The industry provides a variety of items and has an attractive website. The website of the business is user-friendly and attract customer attention. The visual merchandising at the stores provide it with a competitive edge over competitors. The global steel industry has strong marketing strategies which will bring the company into the limelight.

Weaknesses

Deficiency of systems

Cost of Capital is high

Labour productivity is low

Cost of services, as well as input, is high

Rate of taxes is high

Less expenditure on R&D plus the Quality issue

Cost of manufacturing is high

                The steel industry is providing somewhat the same products and services as other competitors do. Due to the physical and online presence, the cost of the capital will increase. The business is mainly targeting the Asian customers which will reduce the opportunity to target another type of customers.

        With weaknesses and threats, it perceives innumerable in the association. Around their crucial position, there are different exceptional offering centres that have a positive effect by giving customer steadfastness and their ability to separate their business.

Opportunities

The global steel industry has following opportunities a explained in below

 Rural market is unexplored with other sectors

Increases in demand according to export penetration  

 Acquisition & mergers

Development of Infrastructure

        The global steel industry has the opportunity to expand the business into different parts of the world. The steel industry has the opportunity to diversify its product range. The company can make a different website according to the countries and their culture. The business can improve its operations and customers services in future.

Threats

Threats for the steel industry is;

Industry growth is slow

Changes in technological

Demand volatility & price sensitivity

Dumping of low price steel –China Factor

            There is huge competition in the online grocery market. The huge retailers have huge market share regarding steel products. The changing economic environment is also a threat to the business. The change in the consumer behaviour can become a major threat as well.