In a market dominated by behemoths like SAIL and TISCO, finding a niche is of crucial importance for a small player. What could a Lloyds do with a meager annual capacity of making 6 lakh tonnes of HR coils while SAIL sold over 1,600 lakh tonnes in the same time ? Should Lloyds follow the market leader or adopt its own unique approach to its business strategy ? It is in the context of such questions that Lloyd's attention came to rest on the manufacturing process.

Almost all steel producers adopt the blast furnace technology. In this, the process starts with a clear differentiation among the ultimate products to be manufactured. So, manufacturing batch size has to be large enough to take up customised orders. The raw material, iron ore, has to pass through several complex stages of manufacturing.

Lloyds looked for an alternative technology that could suit its requirements. The solution lay in the electric arc furnace technology where the unique feature was that initial manufacturing stages need not differentiate among different products. Such a differentiation came at a much later stage. Translated into a business proposition, what is meant was that Lloyds could operate with a much smaller batch size of, say, 100 tonnes and deliver quickly. For instance, a 1,000 tonnes small order of specialised product custom-made to buyer's specification could be delivered in as little as 15 days. Such a quick delivery schedule would not be possible for a large integrated steel manufacturer. In this manner, analogous to small gunboats that could efficiently torpedo large slow-moving ship, Lloyds carved out a niche in the highly competitive Steel market.

(i)Comment on the nature of the business strategy of Lloyds.

(ii)What are the conditions in which such a strategy would succeed ?