Domain : Corporate Strategy

Materials of future and TATA steel

Introduction

The new century has ushered the materials of future. New materials are continuously replacing
traditional ones. They provide unprecedented qualities and/or costs unmatched by traditional ones.

Background

Since the Bronze Age and Iron Age, metals have widely been used in various industrial and
household applications. Innovation has mostly been limited to new alloys of existing metals. These
alloys have continuously evolved to provide efficient usage and new applications.

Materials of future do not fit into a particular definition. Some prominent examples are Carbon fibre,
Graphene, Bamboo fibre, Carbon Nanotubes (CNTs), Advanced Ceramics etc.

Various materials of future are expected to impact the steel industry.

Carbon fibre is being extensively used instead of steel in automobile bodies. Koenigsegg has already
produced a complete car body out of carbon fibre. Improvements to the carbon fibre technology
along with decreased costs could deeply impact steel needs of the automobile industry.

Carbon Nanotubes (CNTs) upon combination with concrete can provide enough compression and
tension to replace steel in construction industry.

Graphene is already being hailed as the miracle material which is 200 times stronger than steel and
lighter than paper. It has the potential of completely changing the entire landscape of the industry.

Problem Statement/Challenges Faced

The steel industry today suffers from increased costs of procuring raw materials, declining prices and
onslaught of highly competitive Chinese players. A lot of alternatives are now replacing steel in
traditional applications. Along with maintaining its lead in the traditional business, Tata steel wants
to stay ahead in adoption of new technologies and also pivot into related businesses.

Critical Case Questions

1. With Steel Prices declining and most Steel companies facing stiff challenges to stay
profitable; should Tata Steels focus shift to developing new products/technologies or on
bringing down costs?

2. Will these materials of future have a significant impact on the steel industry?

3. What are the new businesses that Tata steel could foray into with the help of materials of
future?

4. Develop a Business Strategy with a plan for Tata Steel to stay ahead of its competitors, via
adaption of materials of future.
Domain Corporate Strategy
Name of the Case: Business model for the professional football club Jamshedpur FC in ISL
Introduction
Tata Steel has maintained its long standing partnership with community through varied
initiatives in the areas of health, education, livelihood and sports. Having been a pioneer in
promotion and development of sports in India, Tata Steel has recently forayed into the
Indian Soccer League through its own professional football club- Jamshedpur FC. The team,
along with, Bengaluru FC, will increase the Indian Super League from eight teams to
ten. This would not only promote soccer as a sport in Jharkhand but also give an
international platform to the rising football talent in India.
Background
The objective of any professional club franchise is to be financially self-sustainable and at
the same time work towards real community benefit, by working closely and in partnership
with the local community. Jamshedpur FC wants to develop the culture of sports in the
community and provide recognition to Jamshedpur city on national platform through ISL.
Challenges Faced
There is a clear lack of football culture in the country. Needless to say, professional football
industry is at a very nascent stage. Lack of proper infrastructure, adequate training facilities
has marred the sport. The introduction of competitive Indian Super League has given some
impetus to the sport. Franchise owners are yet to record profits given the lack of
enthusiasm around the sport in the country.
Critical Case Questions (5 in nos.)
1. Study the business models of major sports franchises in the country.
2. Develop a business model for Jamshedpur FC with a 5-year horizon, keeping in mind the
current market for football in the country
3. Design a marketing plan for the franchise, include different media platforms where w e
can mark our presence. How can Jamshedpur as a brand be taken to a national level?
4. How can the franchise create fan engagement and also increase the footfall in the
stadium?
5. Formulate an overall strategy to promote the football culture in the community.
DOMAIN- M&S

DOWATER PIPELINES: DEVELOP STRATEGY FOR TSL TO ACHIEVE A PREMIUM POSITION IN THIS
SEGMENT
Introduction
Tata Steel has evolved to become one of the major suppliers of Steel in the construction
industry with primary focus on the B2B (project) customers. The company offers a portfolio
of both flat products (Hot Rolled Coils & Plates) as well as long products (reinforcement TMT
bars & wire rods) in this industry.
Over the last few years, the demand for flat products in the construction industry has
witnessed robust growth with the government focussing on basic infrastructure
development. Two key initiatives taken by the government in this regard are:
1. To provide clean drinking water for all citizens of the nation
2. To increase area under irrigation for better harvest
This has led to the primary requirement of developing water pipeline networks to connect
the sources of water to the required geographies. The municipal corporations, State Public
Health Engineering and Irrigation departments are the nodal agencies for developing &
operating such pipelines. Central Government, state governments, World Bank and its
agencies fund these projects.
The Govt agencies engage EPC (Engineering, Procurement & Construction) contractors to
procure & lay the entire pipeline network. The EPCs further engage pipe manufacturers who
in turn procure Hot Rolled Steel Coils from the steel producers like Tata Steel (Exhibit 1
explains the business model). The EPCs also have the option of buying steel directly &
fabricating pipes at site (eg. L&T).
Background
Tata Steel has set up a state-of-the-art flat products steel making facility at Kalinganagar.
The company has identified and ventured into new segments of infrastructure. Water
pipelines have emerged as one of the key segments which offer high volume demand
without any seasonal variation. In FY17, the company supplied~60KT of HR steel in coil form
to both pipe manufacturers as well as to EPCs. This segment requires wider & thicker
sections which also enhances the productivity of the rolling mill. A water pipeline network is
manufactured from various materials at different zones:
Mild Ductile HDPE
Source RCC pipes Sink
Steel Pipe Iron Pipe pipes

HR steel coils are used only to manufacture Mild Steel Pipes which is used when the size of
pipes are more than 1500mm in diameter. The pipeline is manufactures through one of the
following 3 technologies:
1. ERW Pipes (Electrical Resistance Welding) Not applicable for high diameter pipes
2. HSAW Pipes (Helical Submerged Arc Welding) Most popular in India (uses HR coil
as Raw material)

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 3. LSAW (Longitudinal Submerged Arc Welding) Not so popular in India (uses HR
plates(coils cut into specific lengths))

The estimated market demand is more than 1 million tonnes per annum. Tata Steel is
currently occupying a market share of~6%. In the long term, the company plans to establish
a share of 30% over the next 3 years.
Problem Statement/Challenges Faced
The pipe manufacturers look to aggregate demand from all the projects bagged by them &
negotiate with steel suppliers. To eliminate variations in steel prices, the pipemakers / EPC
players look for project based fixed prices for the entire duration of the project (~6 to 12
months).
Tata Steel being a relatively new entrant in this segment, currently lacks the visibility of such
projects and the timelines within which steel would be required for such projects. This limits
the company to take positions of availability against demand.
None of the pipemakers are based in Eastern India and the company faces a competitive
disadvantage as it incurs higher cost-to-serve as compared to other steel producers.
Steel specification of such pipes is standardized & is defined in the project. Close
dimensional tolerance is one of the important parameters which customers look for. It has
limited scope of product differentiation.
Critical Case Questions
1) What is the business framework which Tata Steel has to develop for efficiently
serving this segment?
2) What is the value proposition which the company should offer in order to achieve
desired growth along with a premium position in this segment?
3) What are the factors that Tata Steel should take into account to offer a long-term
price to ensure a win-win situation for Tata Steel as well as the pipe manufacturer as
well as the EPC? In case of price volatility not supporting such pricing, what are the
hedging instruments to be used to protect against opportunity loss due to the same?

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 Exhibit 1: Business model for Water Pipeline Segment

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Domain M&S
Name of the Case: EzyNest : Identification of new customer segments and development of relevant
marketing communication strategy for each
Introduction

Nest-In is a steel-based modular construction solution brand of Tata Steel. With its pan-India
presence, and highly efficient delivery mechanism, Nest-in provides a complete turnkey solution
with unique customer experience at its core. It is suitable for various applications like pre-fab
housing (HabiNest), pre-fab modular toilets (EzyNest), portable cabins (MobiNest) and All Time
Water Kiosk (AquaNest).
Background
EzyNest is the flagship steel-based modular toilet brand in the Nest-In portfolio, and was launched in
2014. With the Prime Ministers vision and programme of Swacch Bharat Mission, the country was
sensitized and moved towards a Clean India, resulting in many Corporates, PSUs to adopt toilet
construction in their CSR, besides the State Govt Depts and District MLAs leading the programme
objectives in their respective territories. Swacch Bharat Mission, as a programme, has been divided
into two parts : Urban (under Ministry of Housing and Urban Affairs) and Rural (under Ministry of
Drinking Water and Sanitation). While the urban regions are mainly inclined towards community and
public toilets and demand a more robust solution, rural regions require more individual toilet
constructions and are currently utilizing easily accessible local materials (like brick masonary). Most
of the existing local toilet construction solutions range from INR 12k-20k with an average life span of
8-10 years, via-a-viz the EzyNest solution at INR 70k providing a robust solution with galvanised steel
superstructure and life span of 15-20 years.
Key Features of EzyNest:
a) Size of one compartment(seat) : 4x3ft
b) Expandability : Can be extended into multiple compartments in a line (eg: 3 in a row, 4 in a
row etc)
c) Superstructure
o Walls and Door: Sandwich panels (Powder coated Galvanised steel sandwiching EPS
insulation) supported by pillars in four corners.
o Roof : Flat roof made from sandwich panel.
o Floor: Stainless steel skirting with floor tiles.
o Value additions: Integrated overhead tank with plumbing and twin-pit soakpit waste
management system, Electrical fittings (Light and exhaust fan)

Below are a few comparisons between locally existing construction solutions and EzyNest solution:

Parameters of
Brick Masonary Toilet EzyNest
comparison
Can be dismantled and re-
Portability Immovable
assembled
Ease of installation Multiple vendors Single window solution
Construction Time 20 days 4 days
 Factory-made, Standard &
Quality Workmanship dependent
Elegant
External Finish Conventional Bright finish
Internal Finish Exposed & disjointed Embedded & concealed fittings
Price INR 12-20k INR 70k

Visual

Due to the price sensitivity and absence of desired volume in individual constructions, EzyNest has
strategically confined itself to the urban construction and Corporate/State Govt, which further
deliver toilets in different parts of the country under their CSR programme, and provides logistically
sustainable bulk order benefit to Tata Steel. Since its inception in 2014, EzyNest has increased its
footprint and presence in Corporate CSR (like Nestle, TCS etc) and Urban Government Local Bodies
(like Delhi Urban Shelter Improvement Board, PWD etc), which have been its key customer segments
in the past years.

Problem Statement/Challenges Faced

With an aggressive growth in mind, Nest-In plans to spread its presence in new customer segments
(like religious institutions, tourist spots etc) while increasing penetration in the existing ones. With
the behavior change towards Clean India in progress, toilets are not only being constructed under
the programme mandate, but are being consumed by hospitals, ports, universities etc for their own
premises as well. However, while the requirement of all these consumer segments remain
construction of toilets, the decision-making process and influencers vary with each.

Critical Case Questions (4 in nos.)

1) Keeping the current toilet features and sustainability in view, suggest various new customer
segments that EzyNest should target.
2) Develop a communication strategy for each of the proposed segments. Please describe the
communication design and relevant vehicles.
3) Create a unified communication strategy for EzyNest as a brand.
4) Please suggest segment-wise value-additions