Severstal SWOT and PESTLE Analysis

Strength

1. Emphasis on cost reduction in steel production: The iron and steel industry is largely dependent on the supply of raw material, like iron ore, coke, nickel, etc. for production of a certain grade of steel. Production involves significant amount of cost of production. To enhance profitability, it is important to increase production. Albeit, production for established enterprises largely depends on demand. To make an organization profitable under any demand scenario, it is vital to introduce cost reduction processes in production. Severstal is determined to not only increase productivity but also reduce cost of production through innovative and financial measures. It considerably invests in modernizing its facilities to increase efficiency. According to World Steel Dynamics, Severstal is the one of the lowest cost steel producers in the world. To increase yield of steel thus, decreasing production cost and slag formation, Severstal switched all its molten to solid steel converters to combined blowing in steel formation. In the production of cast iron in CherMK plant, coke consumption was reduced by 10.67% to 335 Kg/ton in 2019 y-o-y through efficient implementation of processes. It has upgraded Izhora Pipe Mills to produce pipes with diameter more than 508mm to cater consumers of the oil and gas industry.

2. Improving presence among customers through strong online outreach: Severstal believes that in order to grow in the modern times and stand out among competitors, it is important to be customer centric, especially in the downstream segment of the business. To increase outreach among customers, Severstal launched its online portal to promote e-commerce and feedback mechanism. Online sales medium was introduced to increase customer reach and convenience and make purchase orders available at fingertips. A direct feedback mechanism through online channels, helps in understanding customer grievances and pockets for improvement. Severstal earned considerably though online mediums with breakthrough share of 32% of the total annual sales in downstream. Online store customer loyalty improved from 41% to 56% in 2019 with total site clocking a footfall of 560,000 visits. The online sales medium helps in data driven production as Severstal had already transitioned itself from production planning to customer oriented supply-chain management along with launching online portal for sales and feedback.

The remaining section under "Strengths" 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.

Threats

This section is available only in the 'Complete Report' on purchase.

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

This section is available only in the 'Complete Report' on purchase.

Environmental

1. Using innovation and technology to reduce the emission of GHG: The iron and steel industry is a major contributor to the emission of greenhouse gases (GHG). Growing concern of customers and tariffs based on environmental pollution are hurting business sentiment towards steel products. The industry contributes 7 to 9% to the total emissions of GHG. Serverstal being an international company is taking responsible initiatives to reduce its carbon footprint. Severstal is a part of WorldSteel benchmarking system, where opportunities to reduce CO2 emissions are chalked out and implemented in productions and other business activities. The Russian steel and mining titan, supports the Paris Agreement, which suggests reducing carbon emissions by 25% to 30% by 2030, from 1990 levels. The company had plans to reduce 7% of atmospheric reduction between 2018 and 2025, and the company has achieved 41% of the target. It achieved the target through implementation of efficient processes of preparing solid fuel, usage of converter gases and reduction in sulphur dioxide emissions.

The remaining section under "Environmental" is available only in the 'Complete Report' on purchase.