INNOVATING BEYOND

COMMODITIZATION : TATA STEEL'S

STRATEGIC SHIFT TO SERVICES AND
SOLUTIONS
CASE AGENDA -
Understanding how Tata Steel strategically pivoted towards solutions to differentiate
itself, the challenges it faced, and the strategic actions it took to innovate and move
beyond commoditization. The focus is on providing both strategic insights and
practical lessons for other companies navigating similar industry shifts.

By
Avik Dutta
CHALLENGES OF COMMODITIZATION

Price Cyclicality Intense Market Competition Low Market Capitalization Overreliance on B2B Markets Lack of Differentiation
Despite high revenues and As steel is largely seen as a
Unpredictable Revenue Stiff competition Historical focus on B2B
commodity, creating a unique
Profitability challenges. Difficult to maintain a profits, Tata Steel's market segments. identity and value proposition is
competitive edge. capitalization lagged behind Vulnerable to demand challenging, which limits
smaller competitors fluctuations. premium pricing opportunities.

MAJOR PLAYERS IN THE STEEL INDUSTRY - INNOVATIVE SOLUTIONS TO DECOMMODITIZATION

JSW STEEL TATA STEEL ARCELORMITTAL NIPPON STEEL JSPL SAIL
Coloron+: Pre-painted galvanized steel Tata Pravesh: Steel doors and windows with wood- Magnelis: A metallic coating that provides an Long Rails: Customized long rails up to SAIL UTS 90 Rails: High-strength rails for high-
for roofing, facades, and appliances. like finishes, durable and termite-proof. unprecedented level of protection against corrosion 121 meters for high-speed railways. speed railway projects.
creep from cut edges, local damage or sub-layer
scratches, even in the most hostile environments.
JSW Everglow: Long-lasting roofing Corus Colors: Pre-painted steel products catering Suraksha: Galvanised Corrugated Sheets known for Fire-resistant Steel: Developed for SAIL SeQR TMT Bars: High-strength bars for
solutions for rural and urban markets. to the construction and infrastructure sector. its superior strength, longer life, light weight and High construction in fire-prone areas. seismic resistance
Tensile Strength makes it a preferred choice for all the
roofing and cladding applications.
JSW NeoSteel: Earthquake-resistant, Tata Tiscon Superlinks: Ready-made, high- Zero Spangle: Offers exceptional mechanical Jindal Panther TMT Bars: High- Weathering Steel (COR-TEN): Rust-resistant steel
premium TMT bars for construction strength stirrups for construction, eliminating properties for an excellent workability profile and a strength, fire-resistant rebars for for bridges and outdoor structures
manual binding. zinc-coat adhesiveness. construction.

JSW Silverline: Premium metallic steel for Tata Shaktee: Galvanized corrugated steel sheets Galvanised Steel: Steel of high-performance material Jindal Jindalium: Premium aluminum- SAIL Duracool: Thermal-insulated roofing steel.
automotive and appliances. for durable roofing. that is corrosion resistance and has excellent coated steel for building and
formability. automotive sectors.
Focus: High-end automotive steel and Focus: High-strength steel grades for automotive, Focus: Highly durable, best aesthetics and best Focus: Energy-efficient and sustainable Focus: Specialty steel for railways, defense, and
eco-friendly production techniques. pre-engineered buildings, and construction performance of the steel in various applications. manufacturing technologies for infrastructure.
sectors. construction, Railways & premium
automotive steel.
PRAVESH STEEL DOORS: AN INNOVATIVE SOLUTION

PRAVESH STEEL DOORS: MARKET TREND

STRATEGIC CONSUMER
VISION SERVICES
GOALS

Decommoditization Post-Sales
Revolutionize the
Revenue Diversification Services
home-building
Brand Positioning Free Installation
Ensure every customer
Transition: Home- Customization
experiences enhanced
Building to Home- Consumer
safety and aesthetics.
Making Feedback Loop
Redefine home
Market Penetration Consultative
entrances with
Selling
innovative and stylish Customer-Centric PRODUCT
door solutions MISSION Approach
HIGHTLIGHTS
Deliver products that
balance strength, (DATA TAKEN FROM TATA STEEL ANNUAL REPORTS)
elegance, and Lead the Steel door with
transformation of the wooden finish Financial Performance:
sustainability.
door industry with Wood like knocking Gross Merchandise Value (GMV) of ₹315 crore in FY2023-24​.
cutting-edge Fire resistant Installation Performance:
technology. Termite-proof Approximately 145,000 units were installed in FY2023-24.
Offer durable, high- Resistance to
quality, and customer-
Maintaining year-on-year steadiness.
warpage
centric door solutions. High insulation and Dealer Network Expansion:
Promote sustainability strength Expanded the Privileged Dealer Program to around 500 outlets.
by integrating eco- Lower total cost of Enhancing market accessibility.
friendly practices into ownership Customer Satisfaction Metrics:
products and services. Achieved a Net Promoter Score (NPS) of 70 in FY2023-24
Significant improvement from 61 in the previous year.
Service Enhancements:
Increased the number of SmartCare Authorised Service Centres to 15
Doubling from 7 centres in FY2021-22
EXECUTIVE SUMMARY
Tata Steel, one of the world's top 10 steel companies, launched its Services & Solutions division in 2015 to overcome price
cyclicality and commoditization pressures.

Company Mandate :
Services & Solutions Achieve 20% of the Total Revenue of TSL from the Services & Solutions Division.
Services & Solution Achieve INR 5 Billion in Revenue.
The division's first product was Pravesh - steel doors with a wooden finish for residential buildings. This case explores the
challenges and strategic decisions faced in scaling up this new business.

TSL’S STRATEGIC RESPONSE - SERVICES & SOLUTIONS

Services & Solution Crucial Findings Manufacturing Channels Test & Learn Phase
Project Development & Design
Portfolio
Forever scope in home-making Assumptions-
Heat Transfer Printing-
To devise a strategy to help TSL More value creation Asset Light Model Product Concept
Desired aesthetics, amenable Distributers & Retailers(B2C)
improve services and solutions Main Door- Not adequate Third-Party manufacture Tenable Price
to customisation Online Platform
portfolio for B2B & B2C security (AHLADA) Consumer Acceptance
PAN India Roll out

Focus on B2B & B2C Conceptualization of Need of Consultive First Review Meeting
Pravesh Steel Doors
2003
The need to build strong B2B &
B2C Relation
2014 Based on consumer insights by 2016 Sales Person
Hiring from companies outside
2018 Services & Solutions review
meeting with Senior
Innovent Team. Management.
the steel industry

SERVICES & SOLUTIONS

CRITICAL EVENT TIMELINE Services & Solutions - Scale up the rollout of Capacity-based
Innovent Pravesh doors
2013 Enhancing the Services and
2015 profit centre named “Services &
2017 contract - Ahlada
Ensure that budgeting practices
Solutions portfolio. Solutions.”
comply with financial
The “Innovent” team
regulations and standards.
(Innovation + Implementation)
was formed to focus on
creating new customer insights.
 MARKET POSITION & GO-TO-MARKET STRATEGY FORE PRAVESH DOORS

INDIAN DOORS AND WINDOWS MARKET SIZE

Market revenue in 2023: USD 24,458.5 million

Market revenue expected in 2030: USD 34152 million
Base Market considered: 2023
Historical Data: 2018 - 2023
Growth Rate: 4.9% CAGR from 2024 to 2030
Market Segment: Residential, Non-Residential
Largest Segment: Residential.

(Data taken from Horizon-Grand View Research)

Cost Analysis of Pravesh Doors with Contemporary Wooden Doors

Implementation Roadmap
DEVELOPMENT AND MANUFACTURING
DISTRIBUTION STRATEGYMID-TERM MARKET STRATEGY

360-Degree Campaign: ATL & BTL.

Consultative Selling: Focus on consumer needs and provide
Asset-Light Model: Manufacturing outsourced to third-party Leveraging Existing Channels: Utilized Tata Steel's tailored solutions. Train sales representatives and dealers in
manufacturers (e.g., Ahlada in Hyderabad) to minimize capital established Tiscon distribution network, which includes 40 consultative approaches.
investment. distributors and 5,000 dealers across India. Brand Positioning: Marketed Pravesh as a premium yet cost-
Product Innovation: Use of heat transfer printing technology to effective lifestyle product.
Product Innovation: Leveraged the expertise of
achieve a wooden finish, ensuring aesthetic and functional Post-Sales Service: Strengthened customer satisfaction through
construction material suppliers free installation and responsive service channels for
requirements are met.
maintenance and customization requests.
INITIAL BOTTLENECKS DURING UP-SCALING OF PRAVESH CHALLENGES AHEAD
Product Design & Development Senior Management
CHALLENGES SOLUTIONS Trajectory of Future product pipeline. Concern about the Structure of S&S
Supply Delays. and where to place PDD.
100% Capacity Contract with Ahlada Must continuously refresh the market
Over-Dependence on Ahlada.
Face loss by the Distribution team in 4 other Door Manufacturers were offerings
front of customers onboarded Sales and Marketing
SUPPLY CHAIN Ahlada Increased its Capacity. MANUFACTURING May not be able to cater flawlessly to
BOTTLENECKS
Transporting Through ad HOC Onboarded Contractual Personnel To
3rd party manufacture leads to ‘Loss of all the regions in case of nation wide
Transportation. critical supply chain links. Control’
Poor Quality Packing & Stocking. launch.
Packing, Transportation,and Storage If there is low demand still we are
responsibility given to Tata Martrade Still evaluating the options.
International Ltd. liable to pay Albaha due to supply Requires at least 3 months to come to
contract. conclusion

Action Priority Matrix

Rank 1 Rank 2 Rank 3 Rank 4

Nationwide launch or Micro Placing PDD within S&S or Future Trajectory of the Third Party Manufacturer or
Problem
Marketing elsewhere Product Pipeline Inhouse facility

With the present 5

The product itself is very
Dominant Sales & Marketing Manufacturers & after solving
Will set the tone for future unique and probably won’t
Reason could hinder the effectiveness the initial supplychain
launches of S&S. have any competition for
of PDD bottlenecks there is not much
several years
to worry at present
INSIGHTS AND RECOMMENDATIONS
POTENTIAL SOLUTIONS TO THE QUESTIONS ASKED BY PRODUCT DESIGN AND DEVELOPMENT TEAM
Modular Designs:
Aesthetic Flexibility: Combining steel with wood, PVC, or composite materials Could There Be Create pre-engineered modular components that can be assembled at the site,
could enhance appeal and diversify product offerings for different market allowing easy customization while simplifying backend processes.
Opportunities to Digital Configurators:
Could Pravesh Doors segments.
Use online tools to let customers design and visualize their doors before purchase.
Enhanced Functionalities: Materials like fiberglass for insulation, glass for design, Customize the Tata Steel’s Aashiyana platform could be leveraged for this.
Incorporate Materials or aluminum for lightweight frames could complement steel's strength.
Trend Alignment: A move towards hybrid material doors aligns with global trends Offering at the Point of Offer prefabricated door units with customizable panels, finishes, and accessories,
Pre-Fabrication:
Beyond Steel? in the housing and construction sectors, offering customizable, sustainable, and Use While Keeping the On-Site
streamlining production while offering variety.
Add-Ons:
energy-efficient solutions.
Back End Simple? Provide post-installation options, such as additional locks, coatings, or decorative
features, to meet dynamic consumer preferences.

AI and IoT: Introduce smart production lines for quality

What New control and customization.
Smart Doors: Integrate technologies like smart locks,
Innovations in sensors, and fire alarms. How Could Tata Steel Regularly conduct market research to stay ahead of consumer preferences and global
Multi-Material Doors: Offer hybrid options, combining steel trends.
Processes, Products, with other materials for enhanced aesthetics and Gear Up for Fast- Build an agile supply chain to respond to demand fluctuations quickly.
functionality. Expand the Aashiyana platform for seamless customer interactions.
Services, and Virtual Reality (VR) Tools: Use VR to let customers experience Changing Market and Use AI-driven analytics to predict consumer behavior and inventory needs.
the door in a simulated environment.
Business Models Collaborations: Partner with home automation companies
Societal Trends?
Could Be Envisioned? to bundle smart solutions.

PDD should stay within S&S or be moved

Continue with third party Manufacturer ? Nationwide launch or micro marketing Future Trajectory of the product pipeline
outside

As of now with present 5 third party Keep steady with launching nationwide as Future Product Pipeline should Focus PDD should be within S&S as their
manufacturers their isn’t much issue. rolling back will mean a fail product more value creation through customer
is still much of homemaking value
The case of excess inventorywould be less among customers. satisfaction.
as we are expected to grow in coming After 3 months when we have identified Costumer Satisfaction will be a vital
addition through product
times. our strong hold and weakness we can re- Differentiator. development in IHB segment.
plan to where to increase supply.
FUTURE PRODUCT PIPELINE

Consumer Satisfaction Adopting Asset-Light Transitioning from Building a Robust Supply Continuous Innovation Future-Proofing via Material
Strategic Marketing
as Diversifier Models Products to Experiences Chain Pipeline and Process Innovation

Deep consumer insights can Identify third party Moved beyond selling Audit existing supply chain Use its existing distribution long-term innovation Explore using diverse
guide innovation. manufactures. products to offering end-to- capabilities network. through its Innovent materials and advanced
Continuous consumer minimized capital end services. Onboard multiple suppliers Branding it as Lifestyle process manufacturing techniques.
feedback loop. expenditure while scaling Ensuring excellent consumer to diversify risks and product. aiming to regularly refresh Action: Invest in R&D to
Post sell services. production. experiences. negotiate capacity Trained new salespeople its product portfolio. anticipate future needs and
Action: Deep consumer insights Action: For companies with Action: Differentiate your agreement for consultative selling. Action: Develop a structured expand offerings beyond the
can guide innovation. Actively limited resources or entering offering by embedding services Implement digital tools like Action: Align your salesforce innovation process to maintain current product mix, fostering a
engage with end-users to new product categories, and a personalized approach, IoT or blockchain to enhance with the product’s value market relevance, cater to culture of perpetual innovation.
unearth pain points and design collaboration with external transforming products into traceability. proposition and identify evolving trends, and pre-empt
solutions that address specific partners can accelerate time-to- lifestyle solutions. Action: Diversify suppliers and synergies with existing competition.
gaps. market and optimize establish quality assurance distribution channels for cost-
investments. protocols to reduce bottlenecks effective scaling.
and scale effectively.

FY’22-2024 PERFORMANCE ANALYSIS OF SERVICES & SOLUTIONS

Thank
You
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