Vedanta Resources SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Global expansion on a larger scale: Vedanta Resources is a company which is present in a number of areas such as mining and metal productions. The company has faced some setbacks in the global landscape. So, on one hand while they had to close down some of their international businesses it might be a good idea to venture into some new ones. This is recommended keeping in mind the fact that they already have a global acceptance and to create new revenue streams it is essential for them to consider expansion. Expansion can be both geographic in the sense of opening plants at new locations and also in terms of their product offerings. Vedanta Resources can add new finished goods as part of their offerings for increasing their total share of market. The experience that the company has acquired over its existence will help in their new ventures. It should consider the general direction of the market and then layout an expansion plan accordingly.

2. Stronger community development programs: The Company should concentrate on developing more varied community programs. Vedanta Resources operate in an industry which is plagued by human interventions in terms of protest. The company should start focusing on the big picture before taking up a new project. They should improve their planning process to incorporate better consideration for the local communities involved and how can they be affected. One way for them to achieve the objective would be to focus on their community development programs more strongly as this can allay some resistance which they face at times form the people. They can start by creating a specific team which will do a feasibility analysis before the start of every project. Vedanta Resources will need the support of the communities it is dealing with if it is to create successful ventures. And this will take them one step closer towards that.

3. Emerging digital technologies and its extensive use: The digital age has brought along with-it new challenges and opportunities. Vedanta Resources should take this chance as an opportunity and properly leverage technology as a lever for enhanced productivity and increased bottom line growth. Automation is one such space where disruptive innovation has shown unprecedented results. Considering the industry Vedanta Resources is in they should take the dive and embrace the latest of technologies to stay relevant in the competitive landscape. Adopting technology can have various benefits which include reduced fatality rates among the workers, better efficiency as an organization among others. New technologies can also be stimulant for new business possibilities. While Vedanta has shown signs of adopting technology, they should take it up more strongly as it can give a new arena for innovation. Technology can also help the company in operational excellence by providing better monitoring capabilities and also shorten the cycle times.

Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Anti-green image of the company in the market: Vedanta Resources is perceived to be repeat offenders in the environment protection arena. This is hurting not only its brand image but is also making investors wary of the company’s plan. While it may be considered okay for organizations to go around the law for seeking development but it starts affecting its image once the practice becomes part and parcel. In the long run it is considered that investors will forego such incidents but they might reflect in future evaluations. Vedanta needs to move its priority towards crisis management and improving its social image. For a company as Vedanta Resources which operates in an industry closely associated with environmental regulations, it needs to portray the right image before venturing ahead.

2. Strict environmental regulations in the mining sector: The mining sector is plagued by ever stringent environmental policies and regulations. And while companies try to adhere to these at times it becomes increasingly difficult for them to navigate ways between them. The most significant impact regulations have on a company is the profits. The main problem affecting the industry as a whole is the question raised on sustainability of the practice. While our resource requirements are demanding mining itself creates other environmental complications, which needs to be addressed first before taking any initiative. The major environmental laws for regulating the mining industry in India are: The Environment (Protection) Act 1986 (EPA); the Forest (Conservation) Act 1980; the Water (Prevention and Control of Pollution) Act 1974; and the Air (Prevention and Control of Pollution) Act 1981. All these pose a lot of constraint on the companies which operate. This is one of the reasons why the mining industry is challenging in terms of sustainability.

3. Initiatives on water, energy and carbon management: Vedanta Resources had taken a number of initiatives on water, energy and also carbon management. a glimpse into their achievements reveal that they achieved 92% recycling of the high-volume low-effect wastes like fly ash, slag, red-mud and jorosite. They also recorded reduction in the greenhouse gas emissions by 14.5% which was again very close to the target that they had set as 16% for FY2020. This proves the commitment of the company towards environmental sustainability. They also have increased efforts for tailings dam management and brought in more stringent checks to ensure that the waste water is treated properly before being discharged through the local drainage system. To adhere to best practices, they also consulted industry experts for all tailing facilities. In the case of Zinc India, instead of disposition of tailings in surface pits they have found a way to turn the waste into paste which can be used for backfilling.