GATI LIMITEDLIMITED

has been submitted in partial fulfillment of the PGDM course, 4th Trimester of PGDM Program at “ Jaipuria institute of management” by the members of Group -05

Sandeep - PGMF0918 Sanjay - PGMF0920 Sangram -PGMF0919

Shubham -PGMF0921

Prof. S. Goswami (Faculty: Strategy And Strategy Formulation)

Overview

Gati ltd. Was incroprated on 25th April,1995 with its registered office at Secunderabad.

It is a leading domestic express cargo company with a pan-India distribution network offering multi-modal connectivity (road, rail, air and sea) and end-to-end logistics solutions.

The focus is on integrated logistics solutions. Gati's transport infrastructure, IT systems, cutting - edge technology solutions and an intensive knowledge of India allows it to tailor its products to meet every customers' unique needs.

Gati offers a wide range of options and does not waver in its focus on quality, reliability and speed.

Mr. K.L Chugh

Vision and Mission

Be the leader in Asia pacific and a globally preferred provider of India-centric Supply Chain services and solutions.

Delight the Customer with quality service by setting new trends through innovation and technology.

Be the most preferred organization for all it’s stakeholders. Be a responsible corporate citizen with unwavering commitment

to environmental protection and conservation.

Core Values

To be ethical, integrated and transparent in our leadership. To respect and treat with value the enquiries of others. 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. In keeping with Indian culture and attitude,never say ‘no’ to service a

customer. To be a responsible corporate citizen and remain committed to the

cause conservation.

Milestones

1996:Tied-up with Indian Airlines to facilitate speedier delivery of shipments.

1997:ntroduced the concept of 3rd party logistics (3PL). 1999: Gati develop the infrastructure to enter the

international cargo segment. 2003: Gati took up a pioneering initiative in further

strengthening it’s internal communication process with the help of oracle software. Gati@web: was designed to simplify the internal process.

2004: Introduced mechanized racking systems in the automated warehouse at Panvel, Maharashtra.

2005:State-of-the-art Mechantronic warehouses with APL racking and modern handling equipment in major cities across India.

2006: Launched Gati Student Express and Online Employee Information System and Performance Management System introduced.

2007: Strategic alliance with China Railway Express International Logistics Co. Ltd.

Launched a joint Courier and Air Cargo Service with Air India.

Introduced VTS (Vehicle Tracking System) 2008:Strategic Alliance with GLS (General Logistics

Systems) Europe's Parcel Leader. Launched Gati Europe Express. Introduced e-POD (Electronic Proof of Delivery) and

Centralized POD Cell. 2009:Launched Gati Academy Launched Gati Art Express Introduced SQS (Service Quality Standardization)

Logistic:- Gati provides customised solutions by integrating all the four stages of your business — procurement, production, distribution, after sales service and reverse logistics.

Shipping:- Shipping division “GATI” coast to coast engaged in costal shipping as well as to Yangon (Myanmar) & Andaman & Nicobar Island.

Fuel Stations:- Operates 5 fuel stations situated at Bangolore, Belgaum, Indore, Shadnagar, chhatar (karnataka). In the fuel station segment, Gati traded in petroleum and lubricants, suppling to several pumps in Karnataka, AP, MP on behalf of Oil majors.

Core Business Segments

Value Added Services in India

Gati's bouquet of value added services are designed to take care of your business needs:-

FOD (Freight-on-delivery): Option of paying at the time of delivery.

COD (Cash-on-delivery): Collection of cash against delivery from your customer and remitting it to you online through e-banking.

DOD (Draft/Cheque-on-delivery): Collection of draft/cheque on your behalf at the time of delivery.

Inbound Rate Agreement: Ensures hassle-free, convenient supplies from your vendors. Also gives you the advantage of dealing with one company at agreed rates.

Documentation Assistance: Information on forms, permits, legal/statutory requirements including clearance of check posts.

Holiday & Sunday Pick-up/Delivery: At Gati, we are sensitive to your urgent delivery commitments which is why we provide the option for pick-up and deliveries on Sundays/holidays.

Octroi Clearing Facility: Octroi clearance on behalf of customers.

Tamper-proof packing: Special bags for safe handling of high value cargo

Fragile goods packaging: Gati offers packaging solutions for fragile goods like marble statues and glassware.

Continued..

Industry where Gati excel

Consumer goods Engineering / electronics Industrial goods Healthcare / life sciences Computer and IT peripherals Retail Fashion and garments Automotives Tactical and confidential projects

Infrastructure

Gati is spread across 427 locations in India and has overseas offices in Sri Lanka, Nepal , Hong Kong , Singapore, and China. The infrastructure consist of a vast network of offices and franchises in India, it has five zonal offices, 61 express centers, 109 depots ,160 franchisees, 54 customer convenience centers, 20 surface transit centers ,19 air transit centers , 5 rail transit centers, 3827 extra service station and 27 modern warehouses spread out of 590 districts in the country.

It provide multi modal transportation include Road, Rail , Sea and Air and its infrastructure facilities consist of rail transit centers ,surface transit centers and air transit center across the country.

The company aims to be one- stop service provider in logistics solutions , focusing on warehousing and infrastructure , distribution centers ,central distribution center , Information technology and human resources .

Technology

Gati Technology Systems is a leading Software Company in India. it is a proactive organization providing complete and customized software solution, Internet Technology Solution and content development services.

It's main line of activity is to develop customized application software covering the entire responsibility of performing the initial system study, design, development, implementation and training .

Gati website was inaugurated in 2002 which aims at rendering better services to customers through which they can download information, lodge complaints outlines and track its status, check price and transit time for shipment of any Gati’s service.this implementation helped Gati to work pro-actively and provide high level of customer satisfaction through reverse flow of information through the website e-mail, SMS and toll free no.

Human Resources

Gati employed a workforce of 2,364 supported by 512 trainees from Gati learning school. Gati brought fourth a higher level of critical appreciation of its performance management system and linked it to business performance. It levered performance linked award (PLA) as an impetus to gauge and reward performance.

The re-visit of the promotion policy opened a transparent career development map for all employees of Gati especially those on the ‘fast track'. the revised promotion policy – ‘branded talent for tomorrow’ was based on careful diagnosis of the company’s operational dynamics and enabled high performance to get on a ‘fast track ‘ growth route and reach their deserving responsibility levels through special assessment centers .

Employees were informed of their strength and weaknesses at development centers and advised on suitable means to develop themselves. the company attached great importance to equip every employee and business partner with the right functional competencies in their job .

Operation

Gati certified for design, marketing and providing cargo management services and logistics solution . Gati established modern state-of-art warehouses at Gurgaon, Ludhiana, Jaipu r,Indore, Kolkata and Pondicherry with multi-level stacking features for effectively space utilization. Equipped with stackers ,forklifts ,cage lifts etc , they also offers several benefits and services like online inventory control and monitoring , flexible hiring options and billing/data collection.

In Sept. 2004 Gati entered into a special tie-up with India airlines and launched Gati gold and Gati silver for speedy air delivery of time-sensitive consignments at several major airports in India. this was a door-to-door pick – up and delivery for sensitive sub-load cargo. the product provide a wide reach through multi-modal connectivity.

It offers value-added services such as flexible delivery options ,door pick-up and delivery , online tracking and toll-free call number. Besides this it is more cost-effective in comparison to other services.

Marketing

Gati marketing strategy aimed at attracting new customer and retaining old ones. The clients of Gati included Hitachi , Pantaloon, Ford and Ranbaxy. A series of activities were involved to serve the customers and make them long term clients.

The dynamic market is constantly evolving and customers expectations were on rise . Gati’s priority is to work toward personalized and innovative services in order to build an everlasting relationship with customers.

The company took several internal and external initiatives in this regard including changes in people and process. Management believes that the foundation of any successful business is only as strong as the degree of customer satisfaction .

Gati made it a primary responsibility to understand customers thoroughly and delight them in the best manner possible

Integrated Logistic

Gati provides customised solutions by integrating all the four stages of your business — procurement, production, distribution, after sales service and reverse logistics.

Gati offers its services as a 3PL or a third party logistics provider. A 3PL provider allows a company to- Concentrate on core competencies Create greater competitive flexibility and release

working capital Get lean and agile Exploit the better know - how and scale efficiencies

of logistics companies

Emerging challenges

In the express industry space was a perishable Item. The limitation with regard to availability of space was the foremost challenge faced by the industry.

Direct competition from unorganized sector player and freight forwarders operating on lower profit margin was another challenge faced by the industry where in a collective approach could bing back the collective services.

Due to liberalization of Indian economy and integration of International trade increases customer requirement and sacling up of operation lead to heavy investment by the express industry in infrastructure setup, hub and new technology.

Organized sector

This sector comprise national and international express service with fully equipped infrastructure and other value added services.

The last service provider were technology driven companies with major emphasis on customer service and speed.

With the development of Just in time and E-commerce there was a sizeable business opportunity for web-enabled services: Convenience, Reliability and Speed were the growth drivers.

Tracking services were offered by most of the organized sector player.

The organized sector was mostly into the package segment of the cargo management business.

Semi-organised

The semi-organized sector comprised players operating within a limited geographical area.

Such companies generally had their own network of branches and franchises in the region in which they operated.

However, Such companies did not have their own distribution network, and relied on the network of other similar companies in various location or acted as a wholesaler to organize sector companies.

The semi-organized and unorganized players were mainly characterized by high volume business and were operated on price advantages.

Unorganised Sector

Un-organised sector comprised companies, which had restricted operation within the boundaries of a particular city( intra-city couriers).

Such companies were found in metropolitan and urban cities and had one or more branches in those cities.

The delivery schedules were based on the urgency of the consignments.

Operated on economies of scale where large companies catered to the higher business volume.

This sector thrived on price and was unable to keep pace with the market in terms of reliability and timeliness.

Gati International

Gati pioneered the cargo management movement in India. And then spread its wings over the sub - continent. The logistics leader is now making its presence felt in the SAARC countries and the Asia Pacific region.

Gati International, the global operations wing, provides us with a strategic USP — an international reach, along with a highly focused expertise in India - centric operations. This ensures that Gati remains the undisputed leader not just in Indian operations, but also in India - focused operations.

They have offices in Singapore, Hong Kong, China and Sri Lanka which offer a range of distribution solutions to and from India

Gati takes care of the hassles of pick up, customs clearance and delivery of freight and cargo.

Services offered include inbound air / sea movement and outbound air / sea movement, along with:

Strategic tie - ups with global players Same day connection Online track and trace facility Consignee and consignor nominated freight terms Door to door service Door to airport / port service Airport / port to airport / port service Airport / port to door service Customs clearance service Bonded storage service Assured space for air shipments Break - bulk and container services

Gati International offers the following services: Freight forwarding —- air and ocean —-

to and from worldwide locations Customs clearance — air and ocean —

inbound and Outbound International courier — to and

from worldwide locations Cross-border trucking

Corporate social responsibilty initiatives

Maye village, Bhuj district, Gujarat. Gati Government School, Hyderabad,

Andhra Pradesh. Tsunami relief fund. MC High School, Nagore, Tamil Nadu

competitor

COMPANY Company Symbol

Gati Ltd. GATI LTD Blue Dart Express Ltd. BLUEDA Corporate Couriers & Cargo Ltd. CORCOU Elbee Services Ltd. ELBSER Patel Onboard Couriers Ltd. PATONB Skypak Service Specialist Ltd. SKYSER

Valuable Clients

Strength

Dominant player in the surface cargo segment in India, which accounts for more than 55% of the total volume of cargo moved.

Entry into the coveted cold-chain logistics business through the acquisition of Kausar India, which has a fleet of 99 refrigerated vehicles.

JV pact with Air India Cargo involving leasing up to five freighter aircraft in FY08. The company aims togain 11% market share in the Indian domestic air cargo industry by December 2008 and 20% by June 2009.

Agreement with Indian Airlines to develop a joint product called IC - Zipp to leverage the growth in theretail courier market. This product will cover the high-value courier segment and the company expects it tocontribute towards business growth both nationally and internationally.

Weekness Dominance of Blue Dart in

the domestic air cargo industry. We expect Gati to face strong competition from Blue Dart in the domestic air cargo business.

Freight expenses account for a majority of Gati's operating expenses. A further increase in Gati's freight expenses, with an increase in fuel costs, could potentially lead to further contraction in margins.

Threat A rise in fuel charges could

have an adverse impact on margins, which are already low for the company.

An economic slowdown could impact the logistics industry as a whole.

Significant investments involved in the setting up of warehouses and building of vessels - capital-intensive industry.

Opportunity Strong macroeconomic growth, robust growth in trade driving the growth of the Indian express

industry.The industry was valued at Rs71 bn in 2005-06 and has grown in the range of 25%-30% over the past 3-4 years. We expect the industry to register a similar growth rate over the next few years.

Exemption of interstate sourcing from VAT will make having centralized large warehouses more viable for companies than having local sourcing and distribution. We expect most Indian companies to outsource the warehousing function, creating a potentially attractive market for 3PL providers.

Entry of a large number of global retailers would require efficient and cost-effective supply chain solutions and 3PL and 4PL logistics solutions within the country. With the retail sector in India spending approximately Rs30 bn on JIT, companies like Gati stand to benefit.

Improvement in the logistics infrastructure in the country - the dedicated rail freight corridor, modernization of ports, and improvement in road infrastructure are set to give a boost to intra-state and interstate freight movement.

The company is re-engineering its network by eliminating the local storage function. It plans to have 1 CDC at Nagpur and 19 EDCs spread across the country. This is expected to result in substantial savings in operational expenses and lead to margin expansion.

Market share

Logistic: Growth of 22.47%. Shipping: This segment’s growth is 11%. Fuel station: Growth by 18% where as

Rising fuel price effected growth by 4%. Gati turnover was 70% from logistic, 7%

from shipping and 23% from fuel station divisions.

Financial Overview

Phased Expansion

Industry Attractiveness

Com

pany

pro

file

L- LowM- MediumH- High

L M H

L

M

H Strategy

Grow slowly

Withdraw

Increase the businessof B2C (Courier).

Globalization

Promotion Worldwide

Strategy

Gati limited has hybrid strategy of differentiation and cost-leadership.

Strengthening the market standing, Brand Positioning, Build on Core Competencies and continue to enjoy the loyalty of customer results in steady growth and value creation.

To position the company to focus on IT, Process Improvement, Cost management and establishment of state of art warehouse.

It proactively re-engineered its warehousing infrastructure and made its operation more mechanized, thereby reducing operational cost.

Pricing strategy

GATI can be classified based on their generalpricing strategy. GATI must decide whether their approach is to use price as a competitive advantage or to seek competitive advantage in non-price ways.

Discount Pricing – Competitive Pricing – Full Price Pricing

Thank you..