Student workbook

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Name: Brbara Tabelini Domingues Date:

The tasks are

1. To identify and analyze the most important strategic factors for the

growth of a specific Hungarian or foreign business (or non-business)

organization.

2. Provide a strategic analysis, and describe the proposed strategy for a

business or non-business organization of your choice.

The structure of the workbook follows the process of strategic management:

1. Introduction of the organization 2. Analysis of the large external environment 3. The Porters five forces analysis 4. Analysis of the strategic group 5. Analysis of the internal resources and competences 6. Analysis of the industry and the value chain 7. SWOT analysis 8. Analysis of the interest groups 9. The interest/power matrix 10.The most important strategic challenges 11. Identification of the strategic alternatives 12.The portfolio model of the organization 13.Assessment of the strategies alternatives 14.The elements of the chosen strategy 15.The hierarchy of the goals

The overall assessment of the workbook:

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1. Introduction of the organization ! Basic data (turnover, assets, workforce, profit) In 2014, company figures net revenue of US$ 7.1 million and revenue of US$ 5.4 billion. The company total sale was 6.9 millions tons, of which 5 millions tons is destined to domestic market and 1.9 millions tons to export sales. Usiminas concluded 2014 with slightly more than 51 thousand employees, including approximately 30 thousand direct employees, 20 thousand outsourced and almost 300 trainees. The Usiminas group ended 2014 with 51 182 direct and indirect employees.The turnover rate 2014 recorded and grew 40.87% compared to 4.71% previous year, driven by project completion for the Goods business axis Capital, representing 75.73% of the total. This fact, however, it is typical that axis, because it is custom projects. ASSETS: Assets (mil) 19,047.188

Total Assets 29,158,688

Description of the activities and legal form The value chain begins with the domination of raw materials, with mining, the logistics system, efficient distribution to partners, customers and steel processing by means of the capital goods and steel transformation segments.

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The most important products and services

Usiminas serves the whole steel production chain, from the mine to the blast furnace, the ore to steel, the plants to industries. Its companies extract the ore, transform it into steel, benefit the product according to customer specifications, offer logistics efficient and deliver finished goods. Usiminas offers: Heavy Plate, Sincron, Hot rolled strip, Cold rolled coils (and sheets), Electrogalvanized coils and sheets and Hot-dip galvanized coils and sheets. In addition to steel, the Usiminas group also operates in the mining sector, through Usiminas Minerao. It also operates in the steel processing segment, through the Solues Usiminas and Automotiva Usiminas, and in the segment of capital goods and services,by Mecnica Usiminas.

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Market share

On consolidated figures, Usiminas has leading position in the domestic flat steel market, with 59% market share.

The most important competitors

Nippon Steel Corporation, Brazils Gerdau, ArcelorMittal, Posco, Nippon Steel, Evraz Group, CSN, Thyssen Krupp and Baosteel.

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The milestones of the corporate history (foundation, stages of development, new owners) Usinas Siderrgicas de Minas Gerais S.A. (USIMINAS) is one of the largest steel mills in Brazil, founded in April 25, 1956 and started up its operations in 1962. Its plants are strategically located in the countrys main industrial axis in Ipatinga, MG and Cubato, SP, and its sales and distribution force is present in all of Brazil regions. Since then, it has become one of the largest Brazilian steelmakers, with operations in several segments of the steel value chain, such as mining and logistics, capital goods, service and distribution centers and customized solutions for the industry. The company is one of the largest producers of steel in the Americas, with major steel mills in Brazil with a total capacity of 7.1 million tons of crude steel per year. The company total seal is 6.9 millions tons, of which 5 millions tons is destined to domestic market and 1.9 millions tons to export sales. The company accounts for 28% of total steel output in Brazil. The Usiminas industrial complex is the largest plain steel complex in Latin America and one of the top 20 in the whole world.

The most important owners Usiminas has solid groups among its shareholders, experienced in the steel and steel transformation industries. This composition reinforces the financial structure and expands the companys technical knowledge to grow globally and face all the challenges in the market.

The chart below shows all controlling shareholders:

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Usiminas shares are part of some of the main indexes in the market. The shares are divided into 1,013,786,190 shares, being 49.84% in common shares (voting) and 50.16% in preferred shares.

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Projetos de curto e longo prazo

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2. Analysis of the large environment (PESTEL analysis) The political tendencies The new Usiminas shareholders' agreement was formalized as Fact, in January 16,

2015. Under the new agreement, the control block started to be formed by Nippon

Group, with 29.44% of the Corporation's common shares by Ternium / Tenaris, with

27.66% and the Fund for Employees of Usiminas, with 6.75%. The agreement is

valid until 2031.

The economical tendencies The oil and gas industry has a robust investment program, motivated mainly

through the use of pre-salt. Driven by the "Minha Casa, Minha Vida "and the

provision of real estate loans, construction in Brazil must be a of the growth. Have

the auto market, sensitive to financing and income also tends the continuous growth

in production and sales, even with the most competition from imported vehicles.

Subsidies granted by the Federal Government, with the reduction and even tax

exemption on industrialized products (IPI) for white goods, should encourage such

sales products in 2016.

Prospects and trends of the market:

Investment in industry in 2016: US $ 17.1 billion

Infrastructure investments in 2016: US $ 105.3 billion

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Investment in housing in 2016/2017 period: R $ 279 billion

Medium and long term projects

R$761 milhes R$25,6 Bi R$11,1 Bi US$237 Bi

The social tendencies Usiminas maintains a social investment policy based on the democratization

of access to education, culture, sports and leisure, with the priority directing actions

for the communities of the regions where it operates through the Cultural Institute

Usiminas, created in 1993. Since then, more than 1,700 sponsored projects through

the incentive laws Culture and Sports.

In Cubato / SP, Usiminas supports the standing committee of Agenda 21 in

the city, for implementation of environmental actions aimed at sustainable

development model to the year 2020, and has opened the Women's Vocational

Training Centre in partnership with SENAI-SP and the City, to increase the

opportunities for integration in construction labor market. The company also

develops, in the Baixada Santista, the Mantiqueira projects (incentive to citizenship

of children and teenagers) and Usiminas at School (support to the management

system of teaching quality).

The year 2016 will be a milestone for the field of Training and Development

in Usiminas, with creation of EDUCATE - Educao Corporativa Usiminas, which

includes the actions of development focused on achieving business goals; and

Educate Portal (platform distance education - e-learning), which will provide greater

capillarity of training actions.

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The technical tendencies

Stripping III

(Cubato) 2015

Reform of Coqueria II Achieving 12 million ton

(Ipatinga)2016 in 2016

The environmental tendencies Aware of its commitment to reducing the impact of its activities on the

environment

and the challenge this represents, Usiminas group promoted various actions and

programs during the year. Featured for recertification of the Environmental

Management System Cubato plant by ISO 14001. The first certification was in

1999, and Usiminas was the second steel in the world - and the first in the country -

with such distinction.

Usiminas is the only Brazilian steel present in the Sustainability Yearbook

2011 Yearbook international sustainability drawn up by Swiss investment group

SAM Group (Sustainable Asset Management), which considers 2,500 companies in

the world and selects the best in terms of sustainability and corporate responsibility.

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Environmental sustainability is a constant in the company's processes . In

2016 Usiminas will start recovery of one of the largest environmental liabilities of

Brazil, an area of containment of tailings, located in Itagua / RJ, and that will serve

as a strategic asset Usiminas mining.

Legal and regulatory tendencies

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3. The Porters five force analysis!

The suppliers

Vale do Rio Doce, Usina de Ipatinga, Suprimentos, Relaes Institucionais, Sebrae,

FIEMG, Sindimiva, Sakiu S.A., Straight Manufacture, ADI, Vam Service, Techsteel ,

and BDMG

The buyers

The main customers are in the automotive, auto parts, agricultural and highway

machinery, electronic equipment and large diameter pipes, in addition to the

distribution sector.

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The potential entrants OLHAR

According to Howell et aL (1999, p. 36), excess capacity IS

a problem that has affected steel industries on a worldwide basis,

but the reasons for its existence are not unanimous, ranging from

a reduction in the demand up to the strategic aim of ruling out

potential entrants. In the case of Brazil, Paula (1997, p. 50) states

that there is some evidence that the segment of long steel uses idle

capacity as a barrier to entry, since this can be a way of waging a

price war against potential entrant companies!

Substitutes

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Competitors

1. Votorantim

2. LAFARGE

3. Gerdau GTL

4. CompanhiaSiderurgica National

4. Analysis of the strategic group

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The strategic map

Usiminas Strategic Map was created in order to standardize concepts and link

the strategic planning process to Usiminas financial indicators.

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Consumer value analysis

5. The analysis of the internal resources

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Financial resources

Human resources

Usiminas incentives their experienced employees in the transmission of

technological knowledge for the new generations. As teachers and consultants, they

help in employees training programs and skilled labor in open courses of the

Company.

Usiminas constantemente inova and structures the unification of HR policies, map

of trails and careers, the improvement of Opportunities Program Professionals

(POP), the program language, the formationtion of supervisors, the new health plan,

the Program Performance Management, Planning Strategic People (PEP) and the

management of health and safety at work, in addition to diagnostic research quality

of life of employees Industry Healthy ".

Physical resources

Usiminas has the Ipatinga (MG) and Cubato (SP) factories, and participation in

Ternium factory, one of the largest steel producers in the Americas and has

operations in Argentina and Mexico. Two private maritime terminals of mixed use

also belong to the Steel business unit: the Private Terminal Praia Mole (TPPM) in

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Esprito Santo, and Ferry Terminal Private Cubatao (TMPC), in So Paulo. Both

located outside the Organized Ports Vitria and Santos.

Technological resources

Usiminas is the second company the country in patent applications and the first

in the mining and steel industry. 600 requests were made to the National Institute of

Property Intellectual (INPI) during the study period.

Uniminas started this year a bill creating the Technological Institute of Steel and

Wood(ITAM) in Ipatinga (MG). The goal is to develop a information core,

technology, research and knowledge of wood and steel in the region of Ipatinga and

still offer education and training quality at Steel Valley population.

In 2009, Usiminas won the Anpei Seal Innovative Company, which certifies the

commitment the Company with the investment of resources and staff in research

and innovation. Altogether 47 companies and institutions of science, technology

innovation and received the qualification of Associationtion of National Research

and Development Innovative Companies (Anpei).

Reputation

Usiminas was recognized as the sixth company most respected in Brazil and the

84th in the world search the Reputation Institute, published by Forbes magazine in

May 2009. The ranking shows how companies are perceived in each country, taking

into account the admiration, respect and confidence they inspire. Usiminas received

Note 74.1 and was classified as strong / robust.

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6. Analysis of the industry ! and the value chain

Position of the company on the industry value chain

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The elements of the companys value chain

7. SWOT analysis ! Strengths

1. High export nearly one-fifth of total sales

2. Strong annual production capacity - almost 9 million tonnes

3. Accelerated cooling technology

4. Technical assistance specialized and technical and technological partnership with

NSC

5. Strong financial position and market value

Weaknesses

1. Low production scale with compared to global players

2. High cost of production

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3. Delays in environmental licensing concessions

Opportunities

1. Invest to expand production capacity of the chain

2. Development of subsea equipment

3. Partnerships between national and international companies

Threats

-steel scarcity

1. High tax burden & tax war

2. Uncertainties about the energy policy of brazil

3. Increase in the volumes of imported steel & indirect imports

8. The analysis of the interest groups !

The owners and their interests

The main shareholders of Usiminas group are Nippon Usiminas Co. Ltd. (29.45%),

Ternium / Tenaris (27.66%), Usiminas Security (6.75%), making up the control

group and 36.14 % in free float shares. The president of Usiminas said the

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company's priority is to expand participation in the construction market and invest in

technology to create resistant steels used in the pre-salt exploration. In 2015 and

2016, the majority shareholder group intends to invest 5.6 billion to increase

competitiveness and market presence.

Interest-groups within the organization

Competitors

1. Votorantim

2. LAFARGE

3. Gerdau GTL

4. CompanhiaSiderurgica National

Consumers

The main customers are in the automotive, auto parts, agricultural and highway

machinery, electronic equipment and large diameter pipes, in addition to the

distribution sector.

State institutions and other interest groups

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9. The interest/power matrix

The overall assessment of the interest groups

Small interest High interest

Small

power

High power

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10. The most important strategic challenges !

The most important strategic problems

The perception of the strategic problems by interest groups

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11. Strategic alternatives from Ansoff-matrix!

Market penetration

Market development

Product development

Diversification

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12. Other possibilities Porters strategies

Other strategies

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13. Identification of strategic problems of the company and the possible alternatives

The most important strategic problems

1.

2.

3.

4.

5.

The possible alternatives

1.

2.

3.

4.

The assessment of the alternatives

The

strategic

alternatives

Suitability

(min:1 - max:5)

Feasibility

(min:1 - max:5)

Acceptability

(min:1 -

max:5)

Overall

assessment

1.

alternative

2.

alternative

3.

alternative

4.

alternative

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14. Description of the proposed strategy !

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15. The hierarchy of the goals !

Mission

Strategic goals 2016-2018

Goals for 2015

http://usiminas.com/RelatorioDeSustentabilidade/2011/port/download/Usiminas-DF2011.pdf

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http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/viewFile/2743/1680 http://swot.advisorgate.com/swot-u/40241-swot-analysis-usiminas.html http://www.mbaskool.com/brandguide/industrial-products-and-chemicals/4297-

usiminas-steel.html

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