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GATI Limited

At The Threshold of A Big Leap

Group No-03
Prashant Sharma
Aditi Kapoor
Seena Alex
Gaurav Dabas
Milan Jyoti Saikia
Shefali Bhutani

Gati Limited At the Threshold of a


2
Big
Leap

Incorporated on 25th April, 1995 registered office at Secunderabad

Provided services ranging from traditional point to point transportation to complex end-to end
integrated logistics and supply chain management solutions.

Was Leader in Express Cargo movement and

Pioneer in Distribution and Supply Chain Management solutions in India.

They offered a spectrum of services that were cost efficient and flexible

Operates in three types of business segment viz.


Logistics
Shipping
Fuel Stations

Vision

Core Values

To be caring and abundant in giving


support and services to others.

To balance the body and mind, and


`people serve people in good spirit.

Be the leader in Asia-Pacific and a globally provider of Indiacentric supply chain services and solutions.

Delight the customers with quality services by setting new


trends through innovation and technology.

Be the most preferred organization for all its stakeholders.

To be ethical, integrated and


transparent in our leadership. To
respect and treat with value the
enquiries of others.

To approach life holistically and


elegantly with sympathy. In keeping
with Indian culture and attitude,
never say `no to service a
customer.

Be a responsible corporate citizen with unwavering


commitment to environmental protection and conservation .

To be a responsible corporate citizen


and remain committed to the cause
of environmental protection and
conservation.

INDUSTRY SCENARIO
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Express Industry comprised courier companies which offered domestic &


international services. The consignments held by the express companies
were broadly classified into :
Documents Any material comprising paper such as correspondence,
bill / invoice, brochure, catalogue, books, files, account details etc.
Non Documents Items with or without commercial value like CKD
units, small machineries, electronic parts, spare parts etc.
On overall basis, documents accounted 60% of total revenue & the rest
40% was non documents.
The 1980s saw the entry of professional players into the express industry
& since then the industry grew at a steady rate.
The Indian Express Cargo industry (organized & Un-organized both) had
enormous prospects for growth in local well as international markets.
The express industry saw progressive growth in the last decade of 20th
century due to trade & services. The elimination of trade barriers,
globalization of markets & trade led to expansion in business

5 The ingress of international players led to transition & growth as


well as posed challenges by web based technology.
Express market Scenario Over 2000 express companies in
India. 20% in organized sector. 25% in semi-organized sector &
others in unorganized sector.

Sector

Revenue(Rs. In crore)

Market share (%)

Organized

1628

65

Semi Organized &


Unorganized

618

25

EMS Speed post

247

10

Total

2493

100

ORGANIZED SECTOR

6
Comprise of service providers with national & international
reach fortified with fully equipped infrastructure & other value
added services.
The major consumer sectors are: Pharmaceuticals, IT,
Readymade garments & FMCG products.
Domestic companies act in consolidation to international
service providers & some of them even have tie-ups with them.
Solutions like Just in Time & e-Commerce enabled considerable
business opportunity for web enabled services.
The organized sector which was principally in the package
segment of Cargo management illustrated high growth.
Unorganized / semi organized sector faced pressure because of
unfavorable pricing environment.

7 The organized sector was by and large into documents business.

The margins were much lower than package segment & also
barriers to entry were also very less
The industry was not regulated therefore licensing was not
requisite to setup a cargo management company.
Entry barriers in the Package segment were high because
company needed strong distribution network, latest technology,
well trained staff, strong brand image & economies of scale.
(given the operating leverage of industry was very high)
Cargo management companies were leveraging on their strong
distribution network & were providing customers with value added
services.
Logistics management emerged as a new growth opportunity for
these companies because a lot of manufacturing companies were
outsourcing their logistics requirements to third parties.

Porters 5 Force Model


8

Threat of New Entrant


[ LOW ]

The barriers to entry are very high. One of the reasons


that there is a high entry barrier is the high fixed cost
associated
with
establishing
the
international
transportation network. This includes hubs, ground
transportation vehicles, air fleet, etc.
Additionally, existing companies can take advantage of
the absolute cost advantage achieved by large volume
of shipments and economies of scale.

Bargaining power of buyers


[ HIGH]

The bargaining power of large buyers in shipping


service industry is high.
Cost associated with switching from one shipping
service to another is very low. Therefore, buyers can
turn to a shipping provider that offer faster service,
lower price, or service innovation with ease. This is
especially true for large corporations, like IBM, which
ships in large volumes and can bargain quantity
discounts.

Bargaining power of suppliers


[LOW]
The supplier power within this industry is fairly low.

Large shipping service provider can affect prices of


supplies, like packaging materials. This is because
they buy in large quantities and can turn to different
suppliers easily.

Threat of substitute products


[LOW]

There are not many substitutes to shipping. In this


day and age where many businesses have strong
online presence and a small physical presence, it
would be difficult to find a substitute in delivering
their product.
Shipping services are very much similar to a
commodity, in that it is not easily replaced with
another service or even a similar service.

Rivalry Amongst Existing


Firms[HIGH]

Established players in shipping service industry


complete rigorously for a market share, the company
who responses first to the constantly changing
environment wins. Established companies have to
strive for continuous improvement in quality,
lowering price, and innovation.
There is very low switching cost for consumers in this
industry making rivalry even more intense.
In addition, intense rivalry is also due to the fact that
maintaining the infrastructure of an express delivery
company presents an exit barrier due to high fixed
costs.

Marketing Environment
Environmen
tal Sector
Market

Technological

Nature of
impact

Impact
Is dominated by the unorganized sector
and Gati Ltd functions in the unorganized
sector.
High sophisticated technology usage.

Economic

Liberalization and Globalization has


made the industry favorable for
investment.

Regulatory

Lack of proper regulatory body results in


inefficient functioning of industry.

Political

No major role is played by it.

Socio-cultural

Service is customized to delight the


customer.

International

Intense rivalry and competition prevails


in the International Competition.

STRATEGIC ADVANTAGE PROFILE


(SAP)
Marketing capability factors
Financial capability factors
Operational capability factors
Personnel capability factors
Informational capability factors

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SWOT

Strengths:
Dominant player in the surface cargo segment in India, which accounts for
more than 55% of the total.
Niche value additions such as third-party logistics, trucking and
warehousing solutions.
Re-engineered hi-tech warehouses and distributing infrastructure
Advanced IT solutions to back up its services.
It provides multi modal connectivity.

Weakness:
Insufficient regional and global presence as compared with its
competitors.
It has been neglecting courier segment

17

Opportunity:
Improvement in the logistics infrastructure in the country-better
roads, improved ports etc..
Entry of a large no. of global retailers
Increasing investments, booming manufacturing and development
of organized retail sectors-provides business potentials to express
industries

Threats:
Global competitors
Space limitations
Government Policy

Strategies

Expansion through concentration

It focuses on services it provide currently.

It also focuses on recent customers and new customer


development by providing them customized services.

Expansion through Internationalization

They provide services to over 200 countries.

The company setup offices in Hong Kong, Thailand, Malaysia and


Indonesia.

Business Policies

Purchase Policy
No question on purchase raw material
The Gati lettering in an original and unique font
which represents
Reliability
Speed
Discipline
It progress in the areas of technology and
automation is a response to changes in
manufacturing systems, inventory management
and supply chain practices across the world.

Financial Policy
It reports 73% increase in PBT (Q1 report)
Last Dividend was 25%.
Annual turnover of 12094 Million out of which 70% from
logistics division, 7% from shipping division and 23% from
fuel station division.
70-80% turnover from courier business and 20-30% from
cargo business.
Growth of logistics, shipping and fuel station are 22.47%,
11% and 4% respectively.
GDP is US$692 billion.

Personal Policy
Workforce of 2364 employee
512 trainees
For training, it co-opted consultants and resource persons
from reputed institutions such as IIM,NIIT, ICFAI, AIMA etc.
Promotion
policy
opened
a
transparent
career
development map for all especially those on the Fast
Track.
It contributes to education, training and assistance to
small industries

Marketing policy
622 out of 626 districts in India
Value added services like warehousing, trucking, express
and time-bound cargo.
Gati has always tried to stay one step ahead by
innovating and transforming its processes, refining
service offerings, redefining customer standards internally
and externally and using technology to drive up customer
satisfaction.
It provide multi-modal transportation road, rail, sea and
air.
collaboration and co-operation with B2B customers and
partners
24x7 call centres to understand and manage customer
expectations, plan cargos, shipments & routes.

Operational policy
It was an ISO 9001:2000 certified company for design,
marketing and providing cargo management services.
It offers an integrated Express Distribution and
customized Supply Chain Solutions to customers across
diverse industry verticals.
connectivity across air, road, ocean and rail
promise to stay Ahead in reach in service quality, wide
network, technology, automation
Information through the website, e-mail, SMS and toll
free number.
Gati launched the first exclusive Cargo Train between
Mumbai and Kolkata in association with Indian Railways.

Future Strategy
Aims to be one-stop service provider in logistics
solutions, focusing on warehousing and infrastructure,
express distribution centers, central distribution center,
information technology and human resources.
By providing contribution, it aimed at strengthening the
society by empowering the weaker segments with
education, funding and technical assistance.
It is trying to grow at steady rate.

Conclusion
Conclusion Gati is a dominant player in the surface
cargo segment in India, it still needs radical rethinking
because- Its now facing global competition Needs to
improve its networking as its competitors are much
ahead of it Company must concentrate on the total
retail experience and which will helps in generating
more business. Stay in touch with customers.
Promotional Focus

Thank
You !!!

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