This report has been prepared in order to explain the address the problems related to the centering of the blast furnace and the products that can be utilised in order to undertake the same. It is seen that there are several ways centering of the blast furnace can be done and it is the operational process of the company as well as the management to decide which of the products can be used for the purpose of doing the same.
It is seen that the problem is related to the centering of the blast furnace and this process three significant threats and challenges and they are known to be increased level of expenses, high and expensive cost of maintenance and increased level of wear and tear. The tool is known to be in the form of a conical shape and this shape makes the tool very much vulnerable to the wears and tears as the tool can take up pressures up to 5.4*10^10 Pascals.
However, the product that has been taken into consideration has been a centering tool with a transformation in the internal design and shape of the apparatus so that the life cycle of the apparatus becomes longer without having an impact on the rate of the material flow.
The product that has been proposed has increased amount of resistance toward the wear and tear for a high period because of its shape of their lower segment of the apparatus is altered from the conical form to a cylindrical form.
Furthermore, the stress focus on the product will be distributed unevenly in such a manner that it would not deviate the flow of the material and the reason for damage to the other parts.
The team that is associated to this process is as follows:
Somasekhar Donavalli: He has masters in the mechanical design and is even an experienced design engineer in the simulation and modelling.
Swaroop: He is masters in advanced manufacturing and is even a trained engineer in the line of the production of the automobile parts.
Chatainya: He has a degree of MBA in the field of marketing and has been working in this field for almost 10 years.
Mrudala: MBA in finance and is even a well established Chartered Accountant in India.
Richard: He is masters in business accounting and has the work of a analyst who assesses the market and develops the business.
Swetha: Masers in information technology and therefore has effective amount of skills and experiences in the line of IT.
The research that was undertaken by the World Steel Association, the industries associated with the production of steel was US $754 billion in the year 2015 and forecasted to reach US $866 billion by the end of 2020. The graph that is provided below explains the investments that have been made in the upgradation of the plants.
The information that is available in the graph explains that the development in the consumption of steel was effectively high in India in comparison to the other nations. Furthermore, it was developing at a swift pace each and every year with a growth of 6.2% in the year 2015 and 7.3% rise in the year 2016 in comparison to the consumption that was seen in the year 2014. It is due to this reason that India has been selected as the target market.
The market strategy can be explained with the help of undertaking a SWOT analysis.
SWOT Analysis
|
Strength · Geographical site and location · Effective level of management · Good supply chain · Availability of technology · Product is unique · Consumer loyalty |
Weakness · Increased level of pressure and burden · Maintenance of online presence · Cost Framework |
|
Opportunities · Sustainable innovation · Incorporation of new technologies · New and developing markets · New and unique products · Market development |
Threats · Bad economy · High level of competition · Alterations in the requirements and the demands of the customers · Regulations of the government · Alternate products |
The distribution channel is constructed with the help of the distribution plans and the online presence of the products. The products are supplied directly from the manufacturer and the installation and the other services are provided by the manufacturer with the help of skilled personnel.
The supports are received from the international as well as the domestic investors and assistance from the government is even received in the form of tax benefits.
The extent of competition in India is significantly low as there are limited firms that provide the centering equipment and other plant tools. The two of the main competitors are Beekay Engineering Corporation and Paulworth.
The competitive advantage of the company that has been taken into consideration has been that the company has been operating their production from India, where there sufficient availability of resources and manpower. It is seen that most of the organizations focus on the size and ignores the life time of the production. The company can even exist in the market for a longer time frame by maintaining low margins till the time they can dominate the market.
The assumptions that have been made have been that there is less amount of competition in India and the number of steel plants in the country is rising. The level of consumption of steel has increased as well, which covers the capital that has been given out as the initial investment. In cases of bad sales, the machines that are used for the purpose of production can be used for the production of other parts as well.
The tables that have been given below provides the financial information
|
Initial expenses |
Cash required |
|
Setting up manufacturing plant |
$15million |
|
Setting up branch offices and service centres |
300,000$ |
|
Website and trademark |
100,000$ |
|
Resources |
600,000$ |
|
Employees and labour |
500,000$ |
|
Sales of goods |
60000000$ |
|
Cost of sales |
44000000$ |
|
Gross profit |
16000000$ |
|
Over heads |
1000000$ |
|
Net profit |
$15000000 |
|
Retained earnings |
$15000000 |
It is seen that the overall initial cost is $30 million and the cost of each unit comes to $15,000.
The breakeven analysis explains that the breakeven point in units has been 3750 units.
It is seen that the concerned organization would look to give out free installations for the product and they would enter the international market after the breakeven point is attained. The company has the intention of providing products to their customers based on the size and the specifications as desired from their side. The company can operate in the market for a longer period of time if they maintain their sustenance towards innovation. The company would even start to manufacture other plant devices as well after they reach the breakeven point.
The company has an effective exit strategy as they would look to exist the market with the help of acquisitions and mergers and the time frame that has been estimated for making an exit is 5 to 7 years after their return on investment.
Conclusion
The report has therefore been able to identify the fact that the steel industry in India is a developing and growing business. The financial information that have been obtained explains the fact that the centering equipment is a business that is profitable and therefore is worthy of taking an investment. The company in this report has even highlighted that they have taken India to their entry market after which they would develop their business internationally.
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