COMPANY PROFILE -POSCO
Business Sector :Iron & Steel
Operating Geography :South Korea, Asia, Global
About POSCO :
Headquartered in Pohang, South Korea, Posco started operations in 1968 for manufacturing and selling rolled steel products. The company has gradually ventured into various related businesses that uses steel products or supplies requisite raw materials for manufacturing. Also, it has diversified risk by expanding its operating geography as mentioned above. It also took up a restructuring initiative that resulted in a financial effect worth KRW 7 trillion. POSCO has received many awards such as “Excellence in Sustainability at Steelie Awards'', gold prize at “6th Asia Sustainability Reporting Awards”, etc. As announced in January 2022, Adani Group, an Indian conglomerate, will partner with Posco, to develop and build an integrated steel mill in Mundra, Gujarat, with a $5 billion investment (approx. Rs 37,000 crore). In response to the carbon reduction requirement, POSCO and Adani signed a non-binding MoU to collaborate further at the group business level in various industries such as renewable energy, hydrogen, and logistics.
POSCO’s USP lies in it being ranked number 1 for “The World’s Most Competitive Steelmaker” from consecutive 12 years. The mission statement of USS POSCO states “To Conduct Business in A Manner That Provides Maximum Value to Our Customers, Owners and Employees.” With a vision of “To deliver the meaning of With, which embodies the meaning of a corporate citizen growing together with society, W expresses the continuation of empathetic harmony by visualizing the image of two individuals holding hands. The warm orange color possesses the positive energy of growing together.”
POSCO Revenue :
76,010 billion KRW - FY ending 31 March 2021
57,467 billion KRW - FY ending 31 March 2020
Competitive Analysis of POSCO
The SWOT analysis of POSCO is presented below:
Strengths | Weaknesses |
1. Largest steel producer in Korea
2. Strategic initiatives through subsidiaries and joint-ventures
3. Strong financial performance this year
4. Global presence with a diversified portfolio
5. People – Centric organisation
6. In – house research capability
| 1. Problematic Cash Conversion Cycle
2. Heavy reliance on export sales |
Opportunities | Threats |
1. Expected Growth in steel demand in developing economies
2. Expected Consolidation of the sector
3. New Ventures and Restructuring Endeavour | 1. High competition in the steel industry
2. New environmental regulation may lead to high capital expenditure
3. Availability of substitute Products for steel
4. Uncertainty in Korean and Asian markets |
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Detailed SWOT Analysis of POSCO
Strength
1. Largest steel producer in Korea: POSCO is Korea's largest fully integrated steel producer and one of the world's largest steel producers in terms of annual crude steel production. POSCO and their other steel-producing subsidiaries produced approximately 43.0 million tonnes of crude steel and stainless steel in 2021, with a significant portion of that output coming from Pohang Works and Gwangyang Works. They had approximately 45.3 million tonnes of annual crude steel and stainless-steel production capacity as of December 31, 2021, including 40.7 million tonnes of production capacity in Korea. POSCO's most important market is Korea. Domestic sales accounted for 42.6 percent of total revenue in the Steel Segment in 2021, up from 38.6 percent in 2020. POSCO's steel products accounted for approximately 53% of total sales volume of such steel products sold in Korea in 2021, up from 51% in 2020.
2. Strategic initiatives through subsidiaries and joint-ventures: POSCO has established various steel production subsidiaries and joint ventures in Korea and around the world in order to effectively implement their strategic initiatives and solidify their leadership position in the global steel industry. POSCO and Sagang Group Co. agreed to form POSCO (Zhangjiagang), a joint venture company in China for the manufacture and sale of stainless cold rolled steel products. POSCO HOLDINGS INC. owns 82.5 percent of the joint venture. They also agreed to form PT. Krakatau Steel (Persero) Tbk. to form PT. Krakatau POSCO Co., Ltd. ("PT. Krakatau POSCO"), an Indonesian joint venture company for the manufacture and sale of plates and slabs. POSCO HOLDINGS INC. owns 70.0 percent of the joint venture. They also formed POSCO YAMATO VINA STEEL JOINT STOCK COMPANY, a wholly owned subsidiary that manufactures and sells shape steel and steel reinforcement products.
The remaining section under "Strength" is available only in the "Complete Report" on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threat
This section is available only in the 'Complete Report' on purchase.
The PESTLE/PESTEL analysis of POSCO is presented below:
Political | Economical |
1. Fluctuating business Environment
2. Escalation in tensions with North Korea
| 1. Decrease in global economic demand
2. Exchange Rate fluctuations
3. Effect of Covid-19 on business operations
|
Social | Technological |
1. Role of demographics in the steel industry
2. Urbanization to increase the demand for steel
| 1. Innovations by Competitors
2. Applying AI to manufacturing industry
|
Legal | Environmental |
1. Violation of laws leading to fines
2. Bankruptcy Resolution Laws
| 1. CO2 emission norms
2. Sustainable use of resources
|
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Detailed Pestle Analysis of POSCO
Political
This section is available only in the 'Complete Report' on purchase.
Economic
This section is available only in the 'Complete Report' on purchase.
Social
This section is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
1. Violation of laws leading to fines: According to the Daegu Regional Employment and Labor Administration, 225 violations of the law were discovered on April 20 as a result of special supervision by the Daegu Employment and Labor Office, the Korea Occupational Safety and Health Agency, and outside experts. In a related development, the labour administration fined Pohang Steel Mill 443.2 million won. According to the results of the safety system diagnosis, the main contractor did not properly manage the maintenance and repair work procedures of the subcontractors, and several suppliers were mixed in the unstructured work section, making it difficult to manage. After further investigation into possible violations of the law, the labour office intends to punish POSCO and its suppliers. It will also improve workplace safety management through a comprehensive safety and health assessment led by the Korea Occupational Safety and Health Agency.
The remaining section under "Legal" is available only in the "Complete Report" on purchase.
Environmental
This section is available only in the 'Complete Report' on purchase.
On purchase the POSCO SWOT and PESTLE Analysis PDF report will reach you within minutes. At rare times, a slight delay not exceeding 1 hour might be caused.
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
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Check Out Analysis of Other Relevant Companies
References used in POSCO SWOT & PESTLE Analysis Report
1. Annual Report - https://www.sec.gov/Archives/edgar/data/889132/000119312522125360/d271339d20f.htm#rom271339_74
2. Applying AI to the Manufacturing Industry - https://newsroom.posco.com/en/ask-expert-applying-ai-manufacturing-industry-2/
3. The Evolution of Smart Cities and Opportunities for Steel Industry - https://newsroom.posco.com/en/the-evolution-of-smart-cities-and-opportunities-for-steel-industry/
4. 'POSCO Pohang Steel Mill has violated laws in 225 cases,' says Employment and Labor Administration - http://www.koreaittimes.com/news/articleView.html?idxno=105300
5. Material substitution biggest challenge for steel industry - http://www.financialexpress.com/archive/material-substitution-biggest-challenge-for-steel-industry/1076050/
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POSCO SWOT and PESTLE analysis has been conducted by Abhishek Mishra and reviewed by senior analysts from Barakaat Consulting.
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