http://tatatubes.com/
http://tatasteel.com/
Part 1: Business Unit Strategy - Applying the Hax Delta Model (MIT Sloan): The Case for Tata Steel’s (Fortune Global #258) Tubes Strategic Business Unit (SBU)
Gopal Kumar
Student, Business Administration, NUS Business School, National University of Singapore (NUS)
http://bschool.nus.edu/
Executive Certificate in Strategy and Innovation holder, MIT Sloan School of Management, Massachusetts Institute of Technology (MIT)
http://mitsloan.mit.edu/
Executive Summary:
"Commodities exist only in the minds of the inept."
If the new economy in the contemporary era of globalization, deregulation, market fragmentation and whole scale digitization of information is to be characterized by its key defining attributes, the emergence and evolution of networks would perhaps make it to the top of the list. As with any change, proactive strategic adaptation to this new corporate playground has the potential to unlock and capture significant value, both visible and quantitative & latent and qualitative. A failure to do so, on the contrary, bears the risk of putting the existence of the entire firm or unit in jeopardy. New business models and an integrative framework of business strategy is required to diagnose the current strategic position of the firm or unit and to secure, sustain and strategically leverage competitive advantage with the perspective of the landscape of the extended enterprise in view, going beyond strategic myopia. The Delta Model for such strategic transformation, co-developed by Professor Arnoldo C. Hax of the MIT Sloan School of Management and Dean L. Wilde II of Dean & Company introduces new concepts of 'bonding', 'complementors' and ‘system lock-in' creating a fundamental shift in the way corporations think about competitive positioning in today's transformed business landscape to discover and capture new sources of profitability in the networked economy of the 21st century.
Tubes SBU, a profit centre with annual revenues of INR 1,639 crores (approx. USD 350 million, SGD 490 million) of Tata Steel, a Fortune Global #258 company (2009), derives direction and inspiration from the Tata Business Excellence Model (TBEM) for its strategic planning and incorporates concepts like Porter’s Five Forces model for competitive strategy, Prahlad's Core Competencies framework etc. Additionally, it has programs for regular engagement with suppliers, vendors, distributors, customers and other key stakeholders across the value chain to derive insights into the changing nature and needs of the marketplace. Also, it has identified the building of brands and the development of customized solutions for customers as its core competencies. As such, though such practices are concrete steps in the desired direction forming parts of the overall picture puzzle of aspired strategic position, the lack of an integrative framework of strategy makes it difficult to look at the governing dynamics of the economic ecosystem which the unit is operating in from a holistic systemic viewpoint, detect the missing pieces, define a timeframe based strategic position and execute strategically aligned initiatives to unlock and capture previously hidden value within the value chain of the extended enterprise with the aim of achieving the highest levels of bonding with all the key stakeholders across the extended value chain which act as complementors and enhance the value of its offerings. The ultimate goal is to reach a system lock-in position through complementors with customers, lock-out competitors and make competition (read: war) irrelevant by adopting strategies for collaboration (read: love) with the right complementary partners. Being a market leader with #1 position in two of its three major product segments and #2 in the remaining one in the domestic Indian market where it principally operates, it appears to have significant bargaining power to do so.
Given a choice, what would you rather do: make war or make love?
Note: Owing to the confidential nature of the detailed "White Paper" based on the aforementioned "Executive Summary" it cannot be publicly released on this domain. Queries of a general nature linked to the work may be sent by email. Thank you for your understanding.
