Bluescope Steel Executive Summary

The steel industry has experienced volatile market prices, and this led to a decline in the financial performance of BlueScope Steel, the largest steel manufacturing company in Australia. In order to respond to the poor financial performance, the company proposed to adopt an outsourcing strategy whereby the company was to move some of the production activities to low-cost countries. This presentation presents a review of the strategy with a focus on the key considerations of the plan; a summary of the plan, new insights learned that may affect a successful implementation of the plan and how the company will escape the comfort traps.

The original strategic plan was developed to turn around the performance of the company. Various factors were

As such, there was a need to conduct an initial analysis to determine the current state of the company. The results of the initial analysis were to be used in creating a vision and mission of the strategy. Subsequently, the actions required to actualize the strategy were to be evaluated to identify the resources required as well as to identify the appropriate location of the offshore plants. The decision made during the evaluation of the actions was to be communicated through workshops and meeting to the stakeholders for approval. The workshops are to be conducted regularly to ensure that the stakeholders are involved in every stage of the offshoring process. After approval of the decisions, the required resources including personnel and equipment were to be procured through a tendering process with the approval of the top management team. This step required substantial investment in terms of capital, licenses, patents and time. The management team was to consider the implications of allocating such massive resources to ensure that even if the venture fails, the company will still be sustainable. Once the resources were to be availed, the implementation of the strategy was to commence. In this case, the operation of the offshore plant would start is operations. The managers of the offshore plants were required to continually evaluate the progress of the implementation process using

As such, BlueScope is facing two comfort traps including cost-based thinking and strategic planning. In the original plan, BlueScope aimed at reducing the production costs in order to lower their prices to competitive rates. This approach, however, failed to consider revenues. Regarding strategic planning, the original plan focused on the short-term benefits rather than long-term sustainability. In order to avoid these traps, the company needs to focus its strategy on the customers rather than reducing costs. In this case, investment should be made towards delivering quality products at a cheaper cost without adopting the strategies of other companies. For instance, the company can collaborate with building companies in its largest markets such as North America to boost revenues. The company should also note that the core focus of an organization is to grow its revenues and profit margins rather than minimizing costs. Revenues cannot be managed in the same way as costs. As such, BlueScope should be flexible in adopting new strategies to avoid any traps. Finally, it is important to be environmental-conscious because new trends can make plans unviable. For instance, the development of 3D technology is expected to revolutionize the steel manufacturing industry by providing the design capability to the