strategic marketing - presentation on gati ltd

By:

Duttagupta Abhishek

A Presentation On :

ALL ABOUT GATI LTD.

Started operations in 1989 by Mr. Mahendra Agarwal as a ‘door-to-door cargo’ company.

Initially was a division of Transport Corporation of India (TCI) which was owned by the Agarwal family.

Became successful due to its commitment on delivery and money - back guarantee

THE INITIAL YEARS OF GATI LTD. (CONTD..)

Initially started its operations between Chennai and Madurai.

Gati operated its business with a group of front-end entrepreneurial delivery set-up.

Members of this set- up were known as Gati Associates (GAs)

After nearly 6 months of its initial run, Gati was relaunched in four cities : Hyderabad, Chennai, Bangalore and Hosur.

Mr. Agarwal’s focus on ‘Time bound - Point to point’ delivery led to its success

In 1994, Gati separated from Transport Corporation of India and became a separate entity.

THE INITIAL YEARS OF GATI LTD. (CONTD..)

THE FOUNDER

Born in the affluent and well-known Agarwal family that owned Transport Corporation of India

Holds an engineering degree from Bangalore University and a Masters in Business Administration from Austin, USA

Recognised as a pioneer in setting up Express Distribution in India

Made Gati the most recognized brand and established a market leadership position

GATI GROUP

Single-window offering, for complete Supply Chain requirements

Pioneer in Express Distribution and Supply Chain Solutions

Rapid growth with a CAGR of 25% in the last 8 years

Annual turnover of 150,30,00,00,000 INR (150300 Lakhs)

Strong presence in the Asia Pacific & SAARC countries

Most coveted company, with 3500 employees

Strong base of 5000+ customers

DISTINGUISHED BOARD MEMBERS

THE VISION

To be the preferred provider for India-centric Supply Chain Services and Solutions, and a leader in the Asia Pacific region

To appease customers with quality service and set new trends through innovation and technology

To be the most preferred organisation for all stakeholders

To be a responsible corporate citizen, with an unwavering commitment to environmental protection and conservation

THE MISSION

“To be the most preferred & beneficial business in supply chain and logistics industry to our customers, stakeholders as well as the society at large.”

VALUES AT GATI

OBJECTIVES AT GATI1. To meet customer requirements.

I. Quality of services at competitive value

II. Analyse customer needs and find solutions to satisfy them

III. Provide timely and correct information and avoid surprises

IV. Prompt resolution of compliances and create an environment of mutual respect

2. Achieve operational efficiency by correct operational balances with the help of uniform, accurate, and timely information.

3. Control revenue leakages and costs and improve profitability.

4. Centralized information, which is consistent throughout the organization.

BUSINESS SECTORS

GATI KWE – AHEAD IN REACH

Divided into 2 parts:

1. Express Distribution

2. Supply Chain Solutions

Express Distribution :

The network reaches 99.3% of India

Optimized route planning system enables disciplined delivery

24/7, 365-day service level monitoring system, ensuring safety, security and on-time delivery

Direct connectivity operations in 28 airline sectors, and a vehicle strength of 4000+ vehicles


Supply Chain Solutions division, offers an integrated Supply Chain service, point-to-point & end-to-end.

The Supply Chain Division offers solutions by:

Addressing critical operational constraints

Improving the flow of information

Reforming business processes


GATI E-CONECT

Multi Modal Delivery Solutions covering air, road and rail

Gati eFulfilment Centres that offer pick-up, packing, quality check and last mile delivery

Gati eFulfilment Centres in New Delhi, Bangalore, Mumbai, Hyderabad, Kolkata and Chennai

Delivery capacity of 18,000 shipments a day

Pre-paid and COD across 6,700 pin codes

Covers 14,000 pin codes across tier IV cities andremote locations

GATI INTERNATIONAL

It comprises of Freight Forwarding & Logistics Services

Strong market presence in the Asia Pacific & SAARC countries

Offices in Singapore, Hong Kong, China, Nepal and Thailand

Freight Management Solutions – services by Air, Sea, Land and Vessel chartering

Customs clearance – inbound & outbound

International courier (Worldwide)

GATI KAUSAR LTD. (COLD CHAIN SOLUTIONS)Unmatched Cold Chain Distribution & Solutions

One of the largest fleets of Cold Chain vehicles

An FSSAI certified organisation

HACCP procedures for preventing contamination

Modern refrigerated units from France, USA and Korea

Containers with insulation to counter different climates

Cooling plants to switch to normal grid power

Equipped service centers for consistent service

GATI TRADING SOLUTIONS

Gati Trading Solutions offers business partnership in :

Imports/Exports as importer/exporter (IOR) Billing & distribution to end customers High sea-sales management Supply chain solutions

Gati Trading Solutions benefit customers with :

Order management Demand collaboration Vendor management outsource Lean logistics department Reduced office and administrative expenses

GATI’S JOURNEY OF EXCELLENCE: INCEPTION TO EXPANSION

2006 - 08

Alliance with China Railway Express

Introduced Vehicle Tracking System

Centralised Call Centre at Nagpur

1989 - 01

Introduced door-to-door service with money-back guarantee

Expansion to the SAARC countries

2001 - 06

Launched Gati Millennium Parcel Express

Mechatronic warehouses with APL tracking

2008 - present

Alliance with General Logistics Systems

Introduced e-POD

Joint Venture with KWE Japan

Launched specialized verticals for e-Com deliveries

RECENT AWARDS AND ACCOLADES

5s Excellence Award by CII – Recognised their strict adherence to 5s methodology

Certified Class B by TAPA for maintaining high operational standards

Awarded Best Road Transportation by Indian Chamber of Commerce Excellence

Award for ‘Achievement in Continuous Improvement by Asia Manufacturing Supply Chain Summit

GATI’S C.S.R. INITIATIVES

Gati is a socially-responsible corporate, going beyond business by contributing towards the development of the community.

Gati has set-up innumerous schools, has established ‘Gati Nagar’ in Bhuj District in the year 2001for Gujarat Earthquake victims

Gati has also donated huge amounts of money for the rehabilitation of victims of calamities and natural disasters like Tsunami, Earthquake etc.

Gati is also into ‘Adult Literacy Programmes’, ‘Green Initiatives’ and other vistas of C.S.R

GATI’S PREMIUM CLIENTS

GATI’S COMPETITORS

Blue Dart

DTDC Couriers & Cargo Ltd.

CONCOR

EMS Speed Post

INDUSTRY ANALYSIS

Logistics has huge impact on the domestic and global economy of any country

Logistics is about moving materials, information and funds from one business to another business or from a business to the consumer.

Logistics is an important part of the economic system and is a major global economic activity.

It encompasses activities like freight transportation, warehousing, material handling, protective packaging, inventory control, order processing, marketing, forecasting and customer service.

Historically, the logistics sector was clearly separated and restricted mainly to transportation and warehousing.

The logistics management in today’s world however, covers all the aspects of value chain including an efficient integration of transportation, distribution, warehousing, reverse logistics, value added services such as payment collection, packaging, documentation, customer brokerage facilities, kitting, repair management, reconfiguration etc.

The developments of IT in recent years have further had remarkable implications for the logistics industry.

The Indian logistics industry has come a long way from being a labour intensive during 60’s to the present technology oriented system that provides wide range of logistics services.

Traditionally, manufacturing companies in India managed their own logistics requirements in-house.

The country then gradually evolved from the stage where basic services were outsourced to different service providers known as the (Second-Party Logistics) 2PL service providers.

With the increasing demand, the service providers started providing integrated services together with other value added services, while the organizations focus on the core competencies and streamline their supply chain known as 3PL.

India has become the prime destination for logistics service providers all over the world.

The demand for logistics services in India has been largely driven by the remarkable growth of the economy.

The growth is being projected at 9-10 per cent in next few years, with the CAGR (compounded annual growth rate) expected to grow at a rate of 7-8 per cent.

This growth is expected to gain greater momentum due to the exponential growth of the Indian economy.

In terms of infrastructure, road is the dominant mode of transport which accounts for 68% of freight movement in India.

Railways are considered a relatively cheaper mode of transport and are used mainly for transporting bulk materials over long distances.

About 89% of its freight traffic is contributed by major commodities such as coal, fertilizers, cement, petroleum products, food grain, finished steel, iron ore and raw material to steel plants.

The balance 11% is other commodities moving in bulk and containers.

TOP 3 COMPANIES IN LOGISTICS (SECTOR WISE)

Transporter : 1. GATI

2. DTDC

3. DYNAMIC LOGISTICS

Express Cargo & Couriers : 1. DHL

2. BLUE DART

3. GATI

Freight Forwarders : 1. Gati

2. Container Carriers International Pvt Ltd

3. Express Freight Forwarders

Container companies : 1. CONCOR

2. MAERSK

3. Indian Container Leasing Ltd

Shipping Agents : 1. MAERSK

2. P&O Nedlloyd

3. GATI

Warehouse Providers : 1. Central Warehousing Corporation

2. Associated container terminals Ltd (ACTL)

3. Dynamic Logistics

PORTER’S FIVE FORCE MODEL

THREAT OF SUBSTITUTES : MEDIUM

Highly customer oriented company with multiple vendor options.

BARGAINING POWER OF BUYERS : MEDIUM

Only a few large sectors and companies like the automobile sector are able to get significant discounts.

BARGAINING POWER OF SUPPLIERS: MEDIUM

Government control of fuel prices makes it difficult to control, predict and pass on the fuel costs to customers

THREAT OF NEW ENTRANTS : MEDIUM-HIGH

On one hand barriers to entry is low in terms of ease of getting a license; industry is vulnerable to intense competition and easy scale-

up;

Can be provided without assets.

However the cost of capital is high with complex taxation laws, congestion of key rail, road and port networks.

RIVALRY AMONG COMPETITORS : HIGH

Highly fragmented - large number of local, regional and national players.

Commoditization of products due to lack of differentiation leading to further price erosion.

Gati's competitors have business models which allow them to offer services at pricings to cost sensitive customers which Gati cannot.

ENVIRONMENTAL THREATS & OPPORTUNITIES PROFILE

MARKET ENVIRONMENT India currently spends 13% of its GDP on logistics, which is

expected to come down to 8.10% due to logistics systemsand acceptance of service providers.

Indian logistics industry characterized by dominance of theunorganized market.

Players can be broadly categorized as local transporters,transporters providing some kind of value added servicessuch as warehousing services, and completely integratedplayers providing 3PL services.

The transportation service provider segment is completelydominated by small local trucking companies and individualtruckers.

TECHNOLOGICAL ENVIRONMENT

Currently, the logistics industry has low rates of technology adoption.

The industry has now started investing and developing its IT infrastructure (RIFD, Vehicle tracking, warehouse management) and Gati Ltd has comparatively one of the best IT infrastructures in the industry.

With the steady adaptation of high degree sophisticated technology by Gati, it sure will leave its competitors behind.

ECONOMIC ENVIRONMENT

India has witnessed a sharp increase in trade over the past fiveyears, led by strong economic growth and liberalization.

With increasing exports and India's recognition as amanufacturing hub, international trade has also gone upconsiderably over the past five years.

Consequently, the need for logistics has gone up sharply overthe past few years across industries.

Express delivery industry witnessed 15% CAGR over the last 3years.

REGULATORY ENVIRONMENT

The core issues for the firm include whether the highlycompetitive EDS/courier industry, with no entry or exit barriersand multiple operators (more than 2500 companies) actuallyneed a regulator.

Express' courier operators are still seeking an independentregulatory authority to regulate the written communicationssector.

The only law they are subjected to is the jurisdiction of theConsumer Protection Act, 1986.

POLITICAL ENVIRONMENT

Declining foreign investment has stalled growth andtransformation due to delays in passing / approving keypolicies like the implementation of GST.

SOCIO-CULTURAL ENVIRONMENT

With the increase in spending power of an average citizen, the future looks bright.

Gati has always been proud of its rich heritage of customer delight, its commitment to the society and being the best in what it does.

INTERNATIONAL ENVIRONMENT

The competition in the package delivery service is very globaldue to the presence of FedEx Corporation, UPS, DHL, USPS as well as a host of other smaller companies at home and abroad.

As well as competing against bigger players, GATI Ltd must also compete with regional delivery companies and international delivery companies that serve only their country.

ENVIRONMENTAL SECTOR

NATURE OF IMPACT IMPACT

Market Is dominated by the unorganized sector and Gati Ltd in the unorganized sector.

Technological Advent and adaptation sophisticated technology.

Economic The Industry’s growth rate is favorable.

Regulatory Lack of proper regulatory body results in inefficient of industry.

Political Inefficiency and hurdles in policy making hurts.

Socio-cultural Service is customized to delight the customer.

International Intense rivalry and competition prevails in the International Competition.

KEY SUCCESS FACTORS

Gati is always focussed on the following Key Success Factors:

1. Customer / Partner / Gati’ite satisfaction.

2. Organization effectiveness and flexibility

3. Quality and value-added services.

4. Dependability and trust.

5. The Gati’ites’ culture of services.

OPPORTUNITIES

Introduction of GST

Expected growth in GDP

Increasing industry preference towards time sensitive delivery and Just-In-Time delivery

Phenomenal growth of e-Retail segment

Increasing disposable income levels and favorable demographic profile Increased internet penetration and usage of smart phones

Very few specialized players to cater to e-Logistics

Lack of cold storage infrastructure in India

THREATS

Increased competition from other players

Shift towards In- House delivery model by E-Commerce players

Fast changing industry dynamics and ever-changing requirements of customers

Squeezing margins of e-tailers

Erratic power supply & Shortage of electricity

Capital intensive business

Highly competitive Industry

STRATEGIC ADVANTAGE PROFILE (SAP)

MARKETING CAPABILITY FACTORS

Gati prides itself for its high level of customer service.

Gati provides highly customized services for itscustomers.

Gati has an effective promotional program

Gati Ltd has build its own brand image that stands forTime bound – Point to Point delivery model that aims forcustomer delight

FINANCIAL CAPABILITY FACTORSRaising Funds

Gati plans its processes effectively to raise funds & make available forbusiness needs

Follow domino discipline in fund management & ensure that fundavailability doesn’t affect customer value delivery

Controlling Expenditure

Has built a disciplinary system that ensure that the methods ofmonitoring expenditure are reliable.

Guidelines to the team members to how they can controlexpenditure.

OPERATIONAL CAPABILITY FACTORS

Gati established modern state-of-art warehouses at numerousplaces.

Gati has entered into special tie-ups with India airlines, IndianRailways etc.

It offers value-added services such as flexible delivery options,online tracking etc.

Besides this, it is more cost-effective in comparison to otherservices.

PERSONNEL CAPABILITY FACTORS

The Company has launched a series of innovative HR -development initiatives including e-HR, which gives completeemoluments and related information of every personnel.

The company has a strength of more than 2300 trainedmanpower that is committed to the growth of the organization.Training is in consultation with consultants of AIMA, XLRI, NIIT,FCCI etc.

They are provided opportunity for lateral shift - geographical orfunctional and have their talent potentially rewarded.

INFORMATIONAL CAPABILITY FACTORS

Gati website was inaugurated in 2002. It is aimed at renderingbetter services to customers.

GATI implemented web based ERP called gati@web comprising :

1. GEMS (Gati Enterprise Management System), a custom-developed application,

2. Oracle CRM and

3. Oracle Financial.

Set up an alternative disaster recovery site, to supplement thecompany’s central server at its Head Office, GATI.

STRENGTHS

Undisputed leader in express distribution with supreme industry knowledge

PAN India Network with time sensitive delivery capability

Already established infrastructure and brand name of Gati ltd

Efficient Execution and IT Capabilities

Delivery capability ranging from 50 gms to 50 kgs

Capacity to deliver on same day

Customization and Value added services

Established client base

WEAKNESS

Enormous shortage of skilled manpower

Frequent fuel hikes

Limited air freight network

Poor courier experience

Lack of integrated infrastructure

Huge repairs and maintenance costs

Use of outdated technology in refrigerants

BUSINESS DEFINITION

Customer Functions -what

(Complete Logistic Solutions)

Customer Groups - who Alternative Technologies – how

(For Consumers as well as ( provides Express Deliver, E-commerce Companies ) as well as Cold Storage Solutions)

ORGANIZATION STRUCTURE

MAJOR STRATEGIES

EXPANSION STRATEGIES

Expansion through concentration

Expansion through integration

Expansion through diversification

Expansion through cooperation

Expansion through internationalization

EXPANSION THROUGH CONCENTRATION

A keen focus on services it provides currently and their betterment through various methods is a hallmark of Gati Ltd.

It also focuses on recent customers and new customer development by providing them customized services.

EXPANSION THROUGH INTEGRATION

Gati Ltd integrated the existing network of Transport Corporation of India.

It integrated a model of e-SCM into its day to day operations.

EXPANSION THROUGH INTERNATIONALIZATION

They provide services to over 200 countries.

The company has setup offices in China, UAE, Hong Kong, Thailand, Malaysia and Indonesia through wholly owned subsidiaries like :

Gati Asia Pacific Pvt Ltd (Singapore), Gati Hong Kong Ltd, Gati Thailand Ltd, Gati Dubai Ltd, Gati Holdings Ltd (Mauritius) and Gati Cargo Express Shanghai Ltd (China).

JOINT VENTURES

Gati Ltd entered into a Joint Venture with Kintetsu World Express Private Limited to form “Gati KWE”.

It recorded a turnover of INR 7,823 Million in the period of nine months registering a growth of 20%.

STRATEGIC ALLIANCESGati Ltd has entered into ‘Strategic Alliances’ with Indian Airlines as

well as Indian Railways.

They have an alliance with Jubilee Commercial, an IATA accredited freight forwarder that started operations in 1998 as Air Cargo Agent.

Signed a Memorandum of Understanding (MoU) with China Railway Express International Logistics Company Ltd (CREIL), a market leader in China for rail and road cargo and package delivery.

Gati has also signed a MoU with International Shipping Logistics FZE (ISL) which is a subsidiary of Tata Steel

DIVESTMENT STRATEGIES

Gati has divested 40% stake in its Shipping business for Rs8 crore to a HNI group in Hyderabad.

As per reports in February 2015, Gati Ltd is looking for a financial investor for its cold chain business Gati Kausar.

BUSINESS MODEL AT GATI

Gati's business model was vastly futuristic in comparison to its competitors.

It chose to focus on the customer’s needs from the start.

It developed the business partner concept of “Gati Associates” giving rise to a team of entrepreneurs who were independent business partners of Gati.

EVOLUTION OF BUSINESS MODEL OF GATI

The Beginning Years (1989-1994)

For the initial four years of its operation, delivery commitments took priority over complete utilization of capacity and Gati was focused on to its aim to provide time bound and point to point delivery.

Innovation, Value-addition and growth (1994 – 2001)

Gati added innovative strategies to capture the market and make the transition from a small cargo services company to cargo management.

CONTD..

Gati Process, Technology, Automation and Awards (2001-2006)

To sharpen marketing focus, operational efficiency and improve service quality, Gati reorganized itself right from the zonal level and affected a separation of its verticals and corporate functions.

Empowering the network (2007- 2009)

Gati expanded its network in India, China and Europe following strategic tie-ups with logistic service partners.

Transformation, Recognition & Growth (2010-Present)

Gati grew by leaps and bounds.

They started their own Supply Chain Division as well as ventured into E-Commerce business.

POLICIES AT GATI

MARKETING POLICY

Gati’s simple approach is to attract new customers & retain old ones.

The Motto of the Marketing team – Customer is the Owner !!

Gati’s main policy is to provide personalized & innovative services thereby building an everlasting relationship with its customers.

It is the First Indian Company- - to introduce toll free no (1-600-425-4284) - to implement e-CRM - to introduce e-POD system.

OPERATIONS POLICY

Believes in Asset Light Business Model and Just in Time.

Modern State-of-the-Art warehouses at Gurgaon, Ludhina, Jaipur, Indore, Kolkata and Pondicherry.

In collaboration with Indian Airlines, Gati launched GATI Gold and GATI Silver services, for speedy air-delivery.

GATI International handles international business with a new focus, in association with local logistics agents.

Company have branches in Singapore & Nepal and liaison office in Sri Lanka, Hong Kong, China, Thailand, Malaysia, UAE and Taiwan.

FINANCIAL POLICY

Gati follows a system of Internal Control on Costs as well as efficient Working Capital management.

On the other hand, they believe that employees are their greatest assets.

They have increased employee benefit expenses by 13.8 %.

Their Asset Light Business Model and Just in Time policy also helps them save costs

PERSONNEL POLICY

Gati has launched a series of innovative development initiatives including e-HR, which gives complete emoluments and related information of every Gati’ite.

Gati has a strength of more than 2364 trained manpower that is committed to the growth of the organization.

Promotion Policy was revised – branded “Fast Track” & “Talent for Tomorrow”.

Collaborated with consultants from IIM, NIIT, FCCI, AIMA, ICFAI, XLRI etc., for training and development.

VIGILANCE AND AUDIT POLICY

The Vigilance team exercises due diligence to prevent and detect criminal conduct and promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.

The reviews are undertaken on a continuous basis covering various areas.

The Audit Committee reviews all reports and suggestions for improvement are discussed and implemented appropriately.

RISK ASSESSMENT AND MITIGATION POLICIES

Gati has a Corporate Risk Management Team consisting ofprofessionally qualified accountants and functional specialistswho are empowered to examine/audit the adequacy,relevance and effectiveness of the controls, compliance withpolicies, strategic plans and statutory requirements.

PRODUCT PORTFOLIO (BCG MATRIX)

BCG MATRIX OF GATI

Star

International

Services

E-commerce

Question Mark

Shipping

Supply chain

solutionsCash Cow

Express

Distribution

Cold Chain

Solutions

Dog

Courier Services

Mark

et

Gro

wth

Rate

Relative Market Share

QUESTION MARK

Shipping:

Has a relatively low market share in the world with major players like UPS, Maersk, and FedEx to compete with.

Supply chain solutions:

It is a relatively new and a growing sector which has not reached its maturity in growth cycle.

STAR

E-commerce and International Services:

Both these services are on ever high currently because of increase in globalization and technology advancement.

DOG

Courier Services :

There has been a steady decline in courier and speed delivery services post the internet era where major transactions are done online.

Internet usage boom has brought a downfall in this part.

CASH COW

Express Distribution and Cold Chain Solutions :

These have a relatively high market share in Asian markets and they generate major cash for Gati.

GATI’S FUTURE ..!

…. FOR GATI LTD.

The economy is expected to gain momentum in FY 2014-15.

The Industry is expected to grow with the growth of economy.

For the FY 2014-15, Gati is expected to post better growth at consolidated level which could be propelled with the expected introduction of GST nationwide.

…. FOR GATE KWE

GATI-KWE expects strong growth through solution selling by integrating warehousing, distribution along with other value added services.

Its focus would be to develop more capabilities in E-com logistics

… FOR GATI E-CONNECT

Gati is uniquely placed to provide services in Metros, Capitals, Tier 2 and 3 cities, which is current need of E-Commerce industry due to surge in demand from smaller towns.

The E-commerce vertical has potential to grow 100% per year.

… FOR GATI KAUSAR (COLD-CHAIN SOLUTIONS)

The growth in organized cold chain industry is also expected to be driven by growth in Quick service restaurants, organized retail segment and food processing industry.

Given these favorable industry dynamics, Gati Kausar's plan to set up 10 large cold chain warehouse is the another tipping point for expansion of Gati Group.

GATI’S DREAM

Gati dreams to be a ‘Completely Integrated Logistics Service Provider’.

Thank You !!