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

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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

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
(Ipatinga)2016

Achieving 12 million ton

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

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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
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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

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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

Small interest

High interest

Small
power

High power

The overall assessment of the interest groups

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10. The most important strategic challenges

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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

Suitability

Feasibility

Acceptability

Overall

strategic

(min:1 - max:5)

(min:1 - max:5)

(min:1 -

assessment

alternatives

max:5)

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

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Mission

Strategic goals 2016-2018

Goals for 2015

http://usiminas.com/RelatorioDeSustentabilidade/2011/port/download/UsiminasDF2011.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/4297usiminas-steel.html

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