British Steel With BSC Final Draft Jan 2016

TOWS Matrix on British Steel Corporation
External Factors of Today and Tomorrow

Internal Factors of Today only
Threats
Opportunities
Weaknesses
Strengths
1. The fierce international price
1. Strong recovery of world
1. Over complicated and costly
1. World most profitable
competition from integrated steel
demand due to urbanization.
five integrated steel plants.
integrated steel company with
producers of Europe, NA, SK and
value added products.
Japan.
2. Cyclical fluctuations in demand 2. 2 billions privatization plan.
2. Closure issue of Scotland Plant. 2. Falling Labor costs from 31% with stock market crash.
20% linked with productivity.
3. Prominent political issue.
3. Favorable foreign exchange.
3. Small equipment and high rail
3. Continuous cast method rather
charges.
than ingot method.
4. Oil crisis.
4. Formation of EU.
4. Higher usage of energy by 20%. 4. Rationalization of top
management structure.
Formulation of Strategies by TOWS Matrix.
TOWS Matrix is a innovative and systematic matching tool to formulate appropriate and effective strategies. Though this is a rigid and vigorous
exercise, the ultimate results in the form of action Plan will be exciting and interesting. The hard work and patience will be rewarded only at the
end of the exercise.
Approach to Matching of TOWS
SO ( Maximize Maximize ) - Match each strength with all opportunities so that opportunities are fully exploited with forces of strengths. The
matching will strike into an action plan gained through your professional or common sense.
ST ( Maximize Maximize ) - Match each strength with all threats so that threats are fully dealt with to minimize the impact of threats with
forces of strengths. The matching will strike into an action plan gained through your professional or common sense.
WO ( Convert Maximize ) - Weaknesses are internal and controllable factors. Hence, the first step is to covert the weakness into strength and
Match each converted strength with all opportunities so that opportunities are fully exploited with forces of converted strengths. The matching
will strike into an action plan gained through your professional or common sense.
WT ( Convert - Maximize ) - Weaknesses are internal and controllable factors. Hence, the first step is to convert the weakness into strength and
Match each converted strength with all threats so that threats are fully dealt with to minimize the impact of threats with forces of converted
strengths. The matching will strike into an action plan gained through your professional or common sense.
Strengths
Internal
External
Opportunities
1
2
3
4
Threats
1
2
3
4
Weaknesses
1
2
3
4
1
2
3
4
SO ( Maximize Maximize)
Action Plans
S1O1
S1O2
S1O3
S1O4 Continue to match S2 S3 S4 with all
opportunities
ST ( Maximize Minimize )
Action Plans
S1T1
S1T2
S1T3
S1T4 Continue to match S2 S3 S4 with all
threats
WO ( Convert Maximize )
Action Plans
W1O1
W1O2
W1O3
W1O4 Continue to match W2 W3 W4 with all
opportunities
WT ( Convert Minimize )
Action Plans
W1T1
W1T2
W1T3
W1T4 Continue to match W2 W3 W4 with
all threats
TOWS MATRIX SO - Matching Strengths with opportunities

Approach
While matching the strengths with opportunities, it is better to glance through and compare reasons for strengths and weaknesses presented in the
earlier portion of this analysis. This will help to identify very good action plans.
SO ( Maximize Maximize ) - Match each strength with all opportunities so that opportunities are fully exploited with forces of strengths. The
matching will strike into an action plan gained through your professional or common sense.
Identification of Balanced Scorecard. On the basis of action plans, the four perspectives of Balanced Scorecard are identified along with
strategy.
P = Production (Internal Process) C = Customer L = Learning & Growth F = Finance
Root cause Analysis for TOWS Matrix to formulate strategies ( SO Maximize - Maximize)
Opportunities
Action Plan With action Strategy
Balanced Score Card
Verb
S1. World most profitable
O1 Strong recovery of world S1O1 Focus on increase Market Development C
Customer Perspective
integrated steel company
demand due to urbanization. in production in short run
with value added products
and go for expansion in
the long run in order to
meet the world growing
demand for steel
products.
Strengths
Root Causes (Reasons in

bullet points)
a.Higher productivity of 280
tons
b. Higher price of value
added products.
c. Increased market share.
d. Favorable foreign
exchange.
Root Causes. (Reasons in

bullet points)
a. Huge demand for
development.
b. Change in life style.
c. Innovation in hi-tech
sector.
d. Absence of recycling of
steel.

O2 billions privatization
plan.

bullet points)
tons

bullet points)
a. Government policy.
S1O2 Convince the

government to implement
the 2billions privatization
plan as this is the right
time for privatization.
Joint Venture - F
Financial perspective

added products.
exchange.
b. Increased productivity.

bullet points)
tons
added products.

bullet points)
a. Currency devaluation.
exchange.
bullet points)
tons
added products.
c. Global trend.
d. Creation of more job
opportunities.
O3 Favorable foreign
exchange
b. Import of raw materials in

US Dollars.
c. Increased imports and
exports.
d. Strong position of sterling
pound.
O4 Formation of EU.
S1O3 Import high tech

steel technology from
Germany by using
foreign exchange to meet
privatization.
Backward Integration P
Production (Internal
Process
S1O4 Increase intensive

marketing efforts in
European Union to
increase market share in
Europe
Market Penetration C
S2 O1 -Automate the
Retrenchment - L
Learning and Growth

bullet points)
a. Free movement of goods
and services.
b. Single currency Euro
exchange.
c. Competition from US and

Asia.
d. Strategic Alliance among
European nations.
S2. Falling Labor costs from
O1 Strong recovery of world
31% - 20% linked with

productivity

bullet points)
a. Reduction in labor force
from 140000 51000.
b. Labor automation.
c. Influx of migrant workers.

bullet points)
a. Huge demand for
development.
sector.
steel.
plan.
d. Improved standards of
living.
productivity
bullet points)
from 140000 51000.
living.
productivity
bullet points)
from 140000 51000.
living.
labor in accordance with

the growing world
demand for steel products
in order to achieve the
economies of scale.
Perspective
S2 O2 Introduce Labor
automation in 2 bn
Privatization Plan to
increase productivity.
Retrenchment - L
Learning and Growth

Perspective
S2 O3 Induct migrant
and high tech labor from
Germany
Backward Integration L
Learning and Growth

Perspective

bullet points)
c. Global trend.
opportunities.
exchange
bullet points)
US Dollars.
exports.
pound.

productivity
O4 Formation of EU.

bullet points)
from 140000 51000.

bullet points)
and services.
Asia.
European nations.
living.
S3. Continuous cast method
rather than ingot method.

bullet points)
a. Technology oriented
company.
b. Competition.
c Quality control.
d. Lower cost per unit.
S2 O4 Conduct a study
on comparative cost of
labor between East
European countries and
utilize cheap labor from
east
Learning and Growth

Perspective
S3 O1 - Induct advanced
manufacturing
technology (AMT) in
continuous casting to
meet the world demand
for steel products.
Process
S3 O2 Include in the
Privatization Plan to
enhance the capabilities
of Continuous casting
Process

bullet points)
a. Huge demand for
development.
sector.
steel.

plan.

bullet points)
company.

bullet points)
b. Competition.
c Quality control.
bullet points)
company.
b. Competition.
c Quality control.

bullet points)
company.
b. Competition.
c Quality control.
S4. Rationalization of top

c. Global trend.
opportunities.
exchange
S3 03 Optimize the
capacity of continuous
casting method by import
of high tech resources
Learning and Growth

Perspective
S3 O4 - Achieve
innovative and up to date
technology to increase
quality of steel products,
to be stronger competitor
of US and Asia.
Learning and Growth

Perspective
S4 O1- Decide to invest

more on innovation in
relation to tastes of
customers.
Product Development C

bullet points)
US Dollars.
exports.
pound.
O4 Formation of EU.

bullet points)
and services.
Asia.
European nations.

bullet points)
a.. Better direction from
government.
b. Flexible top management.
c. Dynamic CEO.
c. Functions focused
structure.

bullet points)
government.
c. Dynamic CEO.
structure.
bullet points)
government.
c. Dynamic CEO.
structure.
bullet points)

bullet points)
a. Huge demand for
development.
sector.
steel.
plan.
S4 O2- Decide to
increase relationships
with the government in
accordance with the
global trends.
Joint Venture L
Learning and Growth

Perspective
S4 O3- Decide to import

high-tech machineries.
Process
S4 O4-Decide to form
alliances with EU
companies.
Joint Venture L
Learning and Growth

Perspective

bullet points)
c. Global trend.
opportunities.
exchange
bullet points)
US Dollars.
exports.
pound.
O4 Formation of EU.
bullet points)

government.
c. Dynamic CEO.
structure.

and services.
Asia.
European nations.
Backward Integration = 8, Market Development = 1, Joint Venture = 3, Retrenchment = 2, Market Penetration = 1,

Product Development = 1
TOWS Matrix ST- Matching Strengths with Threats

ST ( Maximize Minimize ) - Match each strength with all threats so that threats are fully dealt with to minimize the impact of threats with
forces of strengths. The matching will strike into an action plan gained through your professional or common sense.
strategy.
Root cause Analysis for TOWS Matrix to formulate strategies ( ST Maximize - Minimize)
Strengths
Threats
Balanced Score Card
Verb
T1. The fierce international
S1T1 Effectively
Cost leadership P
price competition from
control of the cost of
Process
integrated steel producers of production and maintain
Europe, NA, SK and Japan
the quality of the
products.

bullet points)
tons
added products.
exchange.
bullet points)
tons
added products.
exchange.
bullet points)
tons
added products.
exchange.

bullet points)
a. Global technological
competition.
b. More capacity utilization
of continuous casting.
d. Lower labor costs by
automation.
d. Access to more markets.
T2. Cyclical fluctuations in
demand with stock market
crash.
bullet points)
a. Economic and political
uncertainty.
b. Unpopular political
decisions.
c. Natural disasters.
d. Asian economic
S1T2 Buy back own

shares
Retrenchment F
T3. Prominent political issue
S1T3 Restructure the

affected Scotland plant.
Retrenchment F
S1T4 Source for new or

alternate oil substitutes
products.
Learning and Growth

Perspective

bullet points)
a. Unemployment problem
and government concerns.
b. General elections and
voting power of Scotland.
c. Strong trade unions.
d. Nepotism by politicians.
T4. Oil crisis.
10
bullet points)
tons
added products.
exchange.
bullet points
a. OPEC 1973.

productivity

integrated steel producers of
bullet points)
competition.
automation.
S2T1 Implement
automation system to
reduce the cost of labor
further.
Cost Leadership L

crash.
S2T2 Intensify
automation to increase
EPS to revive the stock
market
Retrenchment F
S2T3 Utilize the
Cost leadership L

bullet points)
from 140000 51000.
living.
productivity
bullet points)
from 140000 51000.
living.
b. Middle East unrest

c. Over dependence on oil.
d. Absence of alternative
source of energy.
Learning and Growth

Perspective

bullet points)
uncertainty.
decisions.
d. Asian economic
11
Learning and Growth

productivity
bullet points)
from 140000 51000.
living.
productivity
bullet points)
from 140000 51000.
living.
bullet points)
company.
b. Competition.
c Quality control.
automation system with

current work force, no
new recruitments.
Perspective

bullet points)
T4. Oil crisis.
S2T4 Find other

alternative energy
sources.
Backward Integration - L
Learning and Growth

Perspective
S3T1 Utilize full

capacity to reduce cost
per unit
Cost leadership P
Process
S3T2 Optimize capacity

of casting method to
reduce utilization of
Cost leadership P
Process

bullet points
a. OPEC 1973.
source of energy.
bullet points)
competition.
automation.
crash.
12
resources in relation to
fluctuation in demand.
bullet points)
company.
b. Competition.
c Quality control.

bullet points)
company.
b. Competition.
c Quality control.
bullet points)
company.
b. Competition.
c Quality control.

bullet points)
uncertainty.
decisions.
d. Asian economic

bullet points)
T4. Oil crisis.
S3T3 -- Request the

government to meet their
steel requirement from
the steel produced by
BSC
Joint Venture C
S3T4 Identify oil crisis

alternative to match with
continuous casting.
Learning and Growth

Perspective
S4T1 To initiate a
policy direction to
acquire latest technology
to achieve low cost
production.
Learning and Growth

Perspective

bullet points
a. OPEC 1973.
source of energy.
13

bullet points)
government.
c. Dynamic CEO.
structure.
bullet points)
government.
c. Dynamic CEO.
structure.
bullet points)
government.
c. Dynamic CEO.
structure.
bullet points)

bullet points)
competition.
automation.
crash.
bullet points)
uncertainty.
decisions.
d. Asian economic
S4T2 Lower profit

margin to cater higher
volume sales.
Market Penetration - C
S4T3 Build support

with government.
Joint Venture C
S4T4 Reduce
dependence on oil.
Through research and
innovation
Learning and Growth

Perspective

bullet points)
T4. Oil crisis.

bullet points
14

a. OPEC 1973.
government.
b. Flexible top management. b. Middle East unrest
c. Dynamic CEO.
structure.
source of energy.
Cost leadership 5, Retrenchment 3, Backward Integration 5, Market penetration 1, joint Venture 2
15
TOWS MATRIX WO Convert Weaknesses in to Strengths and match the converted Strengths with Opportunities
WO ( Convert Maximize ) - Weaknesses are internal and controllable factors. Hence, the first step is to covert the weakness into strength and
Match each converted strength with all opportunities so that opportunities are fully exploited with forces of converted strengths. The matching
will strike into an action plan gained through your professional or common sense.
strategy.
Root cause Analysis for TOWS Matrix to formulate strategies ( WO Convert - Maximize)
Weaknesses
Opportunities
W1. Over complicated and

costly five integrated steel
plants.


bullet points)
a. Tradition reddened and
outdated technology.
b. Bad choice of suppliers.
c. Absence of long term
planning.
d. Absence of R&D.

bullet points)
a. Huge demand for
development.
sector.
steel.
plan.

plants.
bullet points)
planning.
d. Absence of R&D.
Action Plan With action

Verb
W1O1- Restructure,
simplify plant, implement
new technology to meet
world demand for high
tech products
W1O2 Initiate long

term planning to
implement privatization
and increase productivity

bullet points)
c. Global trend.
16
Strategy
Balanced Score Card

Learning and Growth
Perspective
Retrenchment L
Learning and Growth

Perspective

plants.

bullet points)
planning.
d. Absence of R&D.
plants.
bullet points)
planning.
d. Absence of R&D.
W2. Closure issue of
Scotland Plant.
bullet points)
a. higher operating costs
b. Political issue with
militant trade unions.
opportunities.
exchange
W1O3 - Identify reliable

suppliers from the
international market to
take advantage of
favorable foreign
exchange.
Process

bullet points)
US Dollars.
exports.
pound.
O4 Formation of EU.
bullet points)
and services.
Asia.
European nations.
W1O4 Introduce lean

production to penetrate
into European markets
W2O1 Minimize
operating costs with the
help of innovative
technology.

bullet points)
a. Huge demand for
development.
17
Learning and Growth

Perspective
Learning and Growth

Perspective
c. Continuous losses.
d. Inefficient workforce.
Scotland Plant.
bullet points)
Scotland Plant.

bullet points)
Scotland Plant.
bullet points)
sector.
steel.
plan.
W2O2 Modernize the

Scotland Plant during
privatization to increase
productivity
Learning and Growth

Perspective
Retrenchment L

bullet points)
c. Global trend.
opportunities.
exchange

bullet points)
US Dollars.
exports.
pound.
O4 Formation of EU.
W2O3 - Reduce
continuous losses by
increasing imports of
crucial raw materials &
exports to new markets.
W2O4 - Minimize
operating costs through
strategic alliance among
European nations

bullet points)
and services.
18
Market Development C
Joint Venture F

W3. Small equipment and
high rail charges.
bullet points)
a. Lack of finance for
replacement of equipment.
b. Delayed decisions due to
pressure.
c. Bad logistic management.

Asia.
European nations.
Learning and Growth

Perspective

bullet points)
a. Huge demand for
development.
d. Unfavorable geographical
location.
sector.
steel.

high rail charges.
plan.

bullet points)
pressure.
location.
high rail charges.

bullet points)

bullet points)
W3O1 Introduce AMT

with distribution logistics
outsourcing
W3O2 Incorporate
innovative technology
management in 2 b
privatization plan.
Process
c. Global trend.
opportunities.
exchange
W3O3 Restructure
logistic management to
increase imports and
exports.

bullet points)
19
Learning and Growth

Perspective
Retrenchment L
pressure.
location.
high rail charges.
bullet points)
pressure.
location.
W4. Higher usage of energy
by 20%.

bullet points)
a. Sole dependence on oil.
b. Outdated equipment with
low efficiency.
c. Absence of alternative
source of energy.
d. Government policies on
energy prices.
by 20%.

US Dollars.
exports.
pound.
O4 Formation of EU.
W3O4 - Utilizing the

strategic alliance of EU to
negotiate for better oil
prices
Joint Venture F

bullet points)
and services.
Asia.
European nations.
W4O1 Optimize the

usage of energy
equipment in line with
production of goods
adhering to the world
demand
Learning and Growth

Perspective
Retrenchment - L

bullet points)
a. Huge demand for
development.
sector.
steel.
plan.
W4O2 - Increase R&D

for alternative sources of
20
Learning and Growth

Perspective
energy and creating more

job opportunities
bullet points)
low efficiency.
source of energy.
energy prices.
by 20%.

bullet points)

bullet points)
low efficiency.
source of energy.
energy prices.
by 20%.

bullet points)
US Dollars.
exports.
pound.
O4 Formation of EU.

bullet points)

bullet points)
and services.

low efficiency.
source of energy.
energy prices.
Backward Integration = 8,
c. Global trend.
opportunities.
exchange
W4O3 - Invest in energy

efficient equipment while
taking advantage of
strong sterling pound
W4O4 - Utilizing the

strategic alliance of EU to
negotiate for better oil
prices
Process)
Learning and Growth

Perspective
Joint Venture L

Asia.
European nations.
Joint Venture = 3 Retrenchment = 4 Market Development = 1
21
TOWS Matrix WT Convert the Weaknesses into Strengths and Match Converted strengths with Threats
WT ( Convert - Maximize ) - Weaknesses are internal and controllable factors. Hence, the first step is to convert the weakness into strength and
Match each converted strength with all threats so that threats are fully dealt with to minimize the impact of threats with forces of converted
strengths. The matching will strike into an action plan gained through your professional or common sense.
strategy.
Root cause Analysis for TOWS Matrix to formulate strategies ( WT Convert - Minimize)
Weaknesses
Threats
Balanced Score Card
Verb
W1T1 - Create R&D
Backward Integration L Learning and Growth
department to become a
Perspective
plants.
integrated steel producers of technology leader.
bullet points)
bullet points)
competition.
planning.
automation.
d. Absence of R&D.
W1T2 Introduce Lean
Backward Integration P Production ( Internal
Production that can
Process)
plants.
crash.
overcome the cyclical
fluctuation in demand by
exploring new market.
bullet points)
bullet points)
22

planning.
d. Absence of R&D.
plants.
bullet points)
planning.
d. Absence of R&D.
plants.
bullet points)
planning.
d. Absence of R&D.
Scotland Plant.
bullet points)

uncertainty.
decisions.
d. Asian economic
W1T3 Collaborate with

the government to solve
political issue by subsidy
or any such arrangement.
Joint Venture L
Learning and Growth

Perspective
W1T4 - Simplify
production method and
find new energy source.
W2T1 - Establish
effective Supply Chain
Management with JustIn-Time
Production ( Internal
Process)

bullet points)
T4. Oil crisis.
bullet points
a. OPEC 1973.
source of energy.
bullet points)
23

Scotland Plant.
bullet points)
Scotland Plant.

bullet points)
Scotland Plant.
bullet points)
competition.
automation.
crash.
bullet points)
uncertainty.
decisions.
d. Asian economic

bullet points)
T4. Oil crisis.
W2T2 - Outsource the

operations to subcontractors according to
the pattern of demand.
Process)
W2T3 - Invest in
technology advancement
in equipments. to cater
the steel requirements of
Government
Backward Integration - P
Process)
W2T4 - Formulate
alternative energy to
reduce the dependency on
oil usage.
Learning and Growth

Perspective

bullet points
a. OPEC 1973.
24

high rail charges.

bullet points)
pressure.
location.
high rail charges.
bullet points)
pressure.
location.
high rail charges.

source of energy.
W3T1 - Initiate larger

equipments and find
cheaper transport
alternative to reduce
overall costs to meet
international price
competition.
Process)
W3T2 - Replace small

equipment at the right
time where the stock
market is stable.
Learning and Growth

Perspective
W3T3 - Change to
higher capacity
equipment/ reduce
transportation cost that
will lead to eliminating
Process)

bullet points)
competition.
automation.
crash.
bullet points)
uncertainty.
decisions.
d. Asian economic
25
the political issues.

bullet points)
pressure.
location.
high rail charges.

bullet points)

bullet points)
pressure.
location.
by 20%.

bullet points
a. OPEC 1973.

bullet points)

bullet points)
competition.
automation.

low efficiency.
source of energy.
T4. Oil crisis.
W3T4 Replace the out

dated equipment and
transportation that will
result in better efficiency
thus less dependency on
oil
Backward Integration - P
Process)
W4T1 - Identify an
alternative energy to
reduce cost to meet
international price
competition.
Learning and Growth

Perspective

source of energy.
26
energy prices.
by 20%.

bullet points)
low efficiency.
source of energy.
energy prices.
by 20%.
bullet points)
low efficiency.
source of energy.
energy prices.
by 20%.
bullet points)
low efficiency.

crash.
W4T2 - Initiate the

alternative energy that
will avoid the fluctuation
in demand of steel in
stock market crash.
Learning and Growth

Perspective
W4T3 - Improve
productivity and
efficiency by using an
alternative energy.
Learning and Growth

Perspective
W4T4 - Use new energy

to eliminate the
dependency on oil.
Backward Integration -L
Learning and Growth

Perspective

bullet points)
uncertainty.
decisions.
d. Asian economic

bullet points)
T4. Oil crisis.
bullet points
a. OPEC 1973.
27
source of energy.
energy prices.
source of energy.
Backward Integration = 15, Joint Venture = 1,
STRATEGIES FREQUENCY TABLE

Name of Strategy
Backward Integration
Joint Venture
Retrenchment
Cost Leadership
Market Penetration
Market Development
Product Development
Frequency
36
9
9
5
2
2
1
28
Cumulative Frequency
36
45
54
59
61
63
64
Ranking
1
2
3
4
5
6
7
Balanced Scorecard
Balanced Scorecard is a concept for measuring companys activities in terms of its vision and strategies to give managers a
comprehensive view of the performance of a business. It balances financial perspective with customer, process and employees
perspectives. Financial measures are necessary, but not enough. Hence, customer, process and employees measures are also necessary.
While implementing strategies, Balanced Scorecard Card is used to conduct performance reviews.
Strategic Implementation Plan

Alignment of Strategies with Balanced Score Card
Financial Perspectives
Strategy
Joint Venture
Action Plan
Convince the government

to implement the 2billions
privatization plan as this
is the right time for
privatization.
Recurring Expenditure
(m)
Capital Expenditure
(m)
Budget
Actual
Variance
Budget
2bn
Actual
Measurement
Model
Primary
MIS
Responsibility Reporting
Variance
Gantt Chart
PERT
Scenario
Planning
CEO
Return on
Total Assets
Return on
Equity
Market price per

share after
privatization
Joint Venture
Backward
Integration
Invest in the government

privatization plan and to
achieve advance casting
technology.
Initiate long term
planning to implement
privatization and
-1
50
-5
NPV
Production
Manager
Productivity
reports/Plant
utilization
reports.
CEO/ Production
Manager
Productivity
reports/Plant
utilization
reports.
Portfolio
Management
Reports.
Average cost per

ton of steel
3
+1
Denationalization
and productivity
model
Buy back own shares.

Retrenchment
55
Portfolio Model
Finance
Manager
Improve the payout to
29
Quarterly
Project
Report
Retrenchment
share holders to revive the

stock market.
P/E Ratio
Finance
Manager
Share Market
reports.

Customer perspectives
Strategy
Market
Development
Market
Development
Market
Penetration
Joint venture
Joint Venture
Action Plan
(m)
Capital Expenditure
(m)
Budget
Actual
Variance
Budget
Actual
Variance
Focus on increase in
production in short run
and go for expansion in
the long run in order to
meet the world growing
demand for steel
production.
5M
6M
-1 M
30 M
27 M
+3 M
Expand to new markets

and increase imports and
exports due to the
favorable foreign
exchange
Increase intensive
marketing efforts in
European Union to
increase market share in
Europe
10
+1
+1
Minimize operating
costs through strategic
alliance among
European nations.
Request the government
to meet their steel
requirement from the
steel produced.
Measurement
Primary
Model
Responsibility
Standard
Costing
NPV
Market Share in
percentage
25
29
-4
Production
Manager
Marketing
Manager
MIS
Reporting
Plant &
Capacity
utilization
reports.
Percentage of
new
customers
Regional wise
sales report
Average Sales
per Customer
Marketing
Manager
Ansoff Model
Marketing
Manager
Country
Reports.
Percentage of
increase in
sales
Market Share in
Percentage
3
+1
Operating ratios
Finance
Manager
Country Sales
Reports.
Government
Budgeting
Marketing
Manager
Sales
Reports
30
Innovation of new
distinctive product that
can overcome the cyclical
fluctuation in demand by
exploring new market.
5
-2
Product Life
Cycle
R&D
Manager
Test
Marketing
Reports.
Product
Development
Improve productivity and
alternative energy.

Production perspectives (Internal Process)
Strategy
Action Plan
(repeating expenditure e.g.
salary) (in million)
Budget
Actual Variance
Backward
Integration
Joint Venture
Market
Penetration
Import high tech steel

technology from Germany by
using foreign exchange to meet
privatization.
Increase market share by
establishing strategic alliances
among the EU steel producing
companies.
Increase exports.
3m
3m
+2
-1
31
Capital Expenditure
(one time expenditure)
(in million)
Budget Actual Variance
10m
11m
-1m
Measurement
Model
Primary
Responsibility
MIS Reportin
NPV
Production
Manager
Monthly Cost o
Production Repo
Average Cost
per ton of steel
Segment
reporting
Comparative
Cost Model
CEO
Export Manager
Half yearly report
Foreign Exchang
Reserves Report
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Integration
Retrenchment
Backward
Integration
Backward
Integration
Backward
Integration
Market
Development
Induct advanced manufacturing

technology (AMT) to meet the
world demand for steel
products.
Import required technology in
casting method to support low
cost production for export.
Achieve advance and up to date
technology to increase quality of
steel products, to be stronger
competitor of US and Asia.
Decide to import high-tech
machineries
Restructure, simplify plant, and
implement new technology to
meet world demand for high
tech products.
Identify reliable suppliers from
the international market to take
advantage of favorable foreign
exchange.
Increase R & D efforts to thwart
off competition from US &
Asia.
Minimize operating costs with

the help of innovative
technology.
Reduce continuous losses by

increasing imports & exports.
20
19
+1
NPV
Production
Manager
Productivity Repo
Capacity utilizati
reports.
10
12
-2
30
30
NPV
Production
Manager
Productivity Repo
Capacity utilizati
reports
-1
25
30
-5
NPV
Production
Manager
Productivity Repo
Capacity utilizati
reports
30
33
-3
NPV
Production
Manager
Productivity Repo
Capacity utilizati
reports
-1
10
15
-5
Lean Production
Model
CEO
Productivity Repo
1.5
+1.50
Inbound Logistic
Model
Purchase
Manager
Bank Negara repo

and statement of
of entries.
10
12
-2
100
120
-20
NPV
Product
Development
Manager
Annual Report
+1
15
17
-2
NPV
Production
Manager
Departmental co
reports
Comparative
cost model
Production
Manger/Export
Manager
BNM
Reports/Productiv
Reports/Annua
32
Reports
Retrenchment
Backward
Integration
Joint Venture
Backward
Integration
Backward
Integration
Backward
Integration
Joint Venture
Restructure logistic
management to increase imports
and exports
Replacement of inefficient
equipment to compete with the
US & Asia.
Utilizing the strategic alliance of
EU to negotiate for better oil
prices
Increase usage of energy
efficient equipment and meeting
the world demand.
Increase R&D for alternative
sources of energy and creating
more job opportunities.
Invest in energy efficient

equipment while taking
advantage of strong sterling
pound.
Utilizing the strategic alliance of
EU to negotiate for better oil
prices.
-1
-1
Value chain
model by Michel
Porter
Logistic
Manager
Logistic and
Distribution Chan
Reports.
-2
15
20
-5
NPV
Production
Manager
Productivity Repo
Price Matrix
CEO
Country PR &
performance repo
NPV
Technical
Manager
Power Consumpt
Reports.
R & D Expenses
Model
R&D
Manager
Productivity /
Performance repo
NPV
Purchase
Manager
Power Consumpt
Reports.
1.5
+.5
-1
10
12
-2
-2
-1
Price
Forecasting
Model
CEO
Country Sales &

Performance Repo
Standard
Costing
Cost Accountant
Departmental co
reports.
-1
NPV
CEO
Operating ratios
Purchase
Manager
Plant Technica
Reports.
Power Consumpt
reports.
NPV
Production
Manager
Productivity repo
Budgetary
Control
Production
Manager
Energy Consumpt
reports.
Cost
Leadership
Backward
Integration
Effectively control of the cost of

production and maintain the
quality of the products.
Restructure the affected
Scotland plant.
Backward
Integration
Source for new or alternate oil

substitutes products.
Cost
Leadership
Implement automation system to

reduce the cost.
-1
Backward
Integration
-1
Find other alternative energy
33
15
15
10
15
18
20
15
20
-3
-5
-5
-5
sources.
Cost
Leadership
Utilize full capacity to reduce

cost per unit
Cost
Leadership
Optimize capacity of casting

method to reduce in relation to
fluctuation in demand.
Identify oil crisis alternative to
match with continuous casting.
Backward
Integration
Backward
Integration
Market
Penetration
Joint Venture
To initiate a policy direction to

acquire latest technology to
achieve low cost production.
Low profit margin to cater
higher volume sales.
Standard
Costing
Production
Manager
Capacity Utilizat
Reports.
Optimization
Model
Production
Manager
Capacity Utilizat
Reports.
+1
Price Matrix
Production
Manager
Energy Consumpt
Reports.
NPV
CEO
Production Repo
Price Matrix
model
Strategic
Management
Model
Price Matrix
Marketing
Manager
Production/Sale
Reports
CEO
PR Reports
To build support with

government.
Backward
Integration
Reduce dependence on oil by

substitutes.
10
15
-5
Backward
Integration
Simplify production method and

find new energy sources.
15
20
-5
CEO
NPV
Energy Consumpt
Reports.
CEO
Energy Consumpt
Reports.
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Integration
Establish effective Supply Chain

Management with Just-In-Time.
Supply Chain
Management
Model
Purchase
Manager
Periodical
Inputs Reports
Outsource the operations

subcontractors.
-3
Outsourcing
Model
Technical
Manager
Productivity Repo
NPV
Production
Manager
Productivity repo
10
15
-5
Price
Matrix
CEO
to
Invest in technology
advancement in equipments.
Formulate alternative energy to
reduce the dependency on oil
usage.
34
15
20
-5
Energy Consumpt
Reports.
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Integration
Backward
Initiate larger equipments and

find cheaper transport
alternative to reduce overall
costs to meet international price
competition.
Replace small equipment at the
right time where the stock
market is stable.
To change to higher capacity
equipment and reduce
transportation cost that will lead
to eliminating the political
issues.
The replacement of the high
capacity equipment and
authority transportation will
result in better efficiency thus
less dependency on oil.
To find an alternative energy to
reduce cost to meet international
price competition.
Initiate the alternative energy

will avoid the fluctuation in
demand of steel in stock market
crash.
Improve productivity and
alternative energy.
-1
10
15
-1
10
15
-1
10
15
10
15
-5
-5
NPV
Transportation
Model
CEO/
Logistic
Manager
Plant Technical
Logistic Report
NPV
Production
Manager
Plant Technical
Reports.
-5
NPV
Transportation
Model
CEO/
Logistic
Manager
Plant Technical
Logistic Report
-5
NPV
CEO
Plant Technica
Reports.
Price Matrix
CEO
Energy Consumpt
Reports.
Energy Consumpt
Reports.
10
15
-5
10
15
-5
Use new energy to eliminate the

dependency on oil.
35
Price Matrix
CEO
Price Matrix
CEO
Energy Consumpt
Reports.
Integration
Price Matrix
10
15
-5
CEO
Energy Consumpt
Reports.

Learning & Growth Perspectives
Strategy
Retrenchment
Retrenchment
Product
Development
Joint Venture
Joint Venture
Retrenchment
Action Plan
Automate the labor in

accordance with the
growing world demand
for steel products in
order to achieve the
economies of scale.
Labor automation to
Decide to invest more

on innovation.
Decide to increase
relationships with the
government in
accordance with the
global trends.
Decide to form alliances
with EU companies.
Create an efficient
workforce to increase
productivity
(m)
Capital Expenditure
(m)
Budget
Actual
Variance
Budget
Actual
Variance
+1
15
17
-2
Measurement
Model
Primary
MIS
Responsibility Reporting
Productivity
Models
Technology
Manager
NPV
HR Manager
Productivity
reports
Input and out
put ratios
10
11
-1
NPV
Learning curve
HRM
Productivity
Reports/
Learning curve
reports.
15
15
BCG Matrix
R&D Manager
Test Marketing
reports.
Public
Relationship
Model
CEO
Annual Reports
Market share
CEO
Country reports
1.5
+.5
Learning Curve
Production
Manager
Productivity
reports
36
Backward
Integration
Backward
Integration
Cost Leadership
Backward
Integration
Joint Venture
Improve decision
making process to
adopt innovation in
the hi-tech sector
Incorporate innovative
technology
management in 2 b
privatization plan.
Utilize the automation
system with current
work force, no new
recruitments.
Create R&D department
to become a technology
leader.
Dependency on
government thus solves
political issue.
-2
10
20
37
12
25
-2
-5
NPV
CEO
Company
Performance
Reports.
NPV
CEO
Company
Performance
Reports.
Learning Curve
Production
Manager
Productivity
reports.
NPV/ R & D
Research &
Development
Model
R & D Manager
Periodical
Research
development
reports.
Strategic
Management
Model
CEO
Political
Environmental
and co. growth
reports.

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TOWS Matrix on British Steel Corporation

External Factors of Today and Tomorrow

TOWS MATRIX SO - Matching Strengths with opportunities

Root Causes (Reasons in

Root Causes. (Reasons in

S1. World most profitable

Root Causes (Reasons in

Root Causes. (Reasons in

S1O2 Convince the

b. Higher price of value

Root Causes (Reasons in

Root Causes (Reasons in

b. Import of raw materials in

S1O3 Import high tech

S1O4 Increase intensive

Learning and Growth

Root Causes (Reasons in

c. Competition from US and

S2. Falling Labor costs from

O1 Strong recovery of world

31% - 20% linked with

demand due to urbanization.

Root Causes (Reasons in

Root Causes. (Reasons in

labor in accordance with

Learning and Growth

Learning and Growth

Root Causes. (Reasons in

S2. Falling Labor costs from

Root Causes (Reasons in

Root Causes (Reasons in

Root Causes (Reasons in

Learning and Growth

Root Causes. (Reasons in

S3. Continuous cast method

Root Causes (Reasons in

Root Causes. (Reasons in

Root Causes (Reasons in

S4. Rationalization of top

Learning and Growth

Learning and Growth

S4 O1- Decide to invest

Root Causes (Reasons in

Root Causes (Reasons in

Root Causes. (Reasons in

Root Causes. (Reasons in

Root Causes. (Reasons in

Learning and Growth

S4 O3- Decide to import

Learning and Growth

Root Causes. (Reasons in

a.. Better direction from

a. Free movement of goods

Backward Integration = 8, Market Development = 1, Joint Venture = 3, Retrenchment = 2, Market Penetration = 1,

TOWS Matrix ST- Matching Strengths with Threats

Root Causes (Reasons in

Root Causes (Reasons in

S1T2 Buy back own

T3. Prominent political issue

S1T3 Restructure the

S1T4 Source for new or

Learning and Growth

Root Causes (Reasons in

S2. Falling Labor costs from