Gati (GATI) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Gati (India)

Based on various researches at Oak Spring University , Gati is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing commodity prices, central banks are concerned over increasing inflation, wage bills are increasing, there is increasing trade war between United States & China, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of Gati

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Gati can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gati, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gati operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Gati can be done for the following purposes –
1. Strategic planning of Gati
2. Improving business portfolio management of Gati
3. Assessing feasibility of the new initiative in India
4. Making a Air Courier sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gati

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Strengths of Gati | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Gati are -

Low bargaining power of suppliers

– Suppliers of Gati in the Transportation sector have low bargaining power. Gati has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gati to manage not only supply disruptions but also source products at highly competitive prices.

Learning organization

- Gati is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Gati is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Gati emphasize – knowledge, initiative, and innovation.

Analytics focus

– Gati is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Air Courier industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Highly skilled collaborators

– Gati has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Air Courier industry. Secondly the value chain collaborators of Gati have helped the firm to develop new products and bring them quickly to the marketplace.

Training and development

– Gati has one of the best training and development program in Transportation industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Organizational Resilience of Gati

– The covid-19 pandemic has put organizational resilience at the centre of everthing Gati does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Sustainable margins compare to other players in Air Courier industry

– Gati has clearly differentiated products in the market place. This has enabled Gati to fetch slight price premium compare to the competitors in the Air Courier industry. The sustainable margins have also helped Gati to invest into research and development (R&D) and innovation.

Strong track record of project management in the Air Courier industry

– Gati is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the Gati are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Innovation driven organization

– Gati is one of the most innovative firm in Air Courier sector.

High switching costs

– The high switching costs that Gati has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Ability to recruit top talent

– Gati is one of the leading players in the Air Courier industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.

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Weaknesses of Gati | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Gati are -

Employees’ less understanding of Gati strategy

– From the outside it seems that the employees of Gati don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Slow decision making process

– As mentioned earlier in the report, Gati has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Air Courier industry over the last five years. Gati even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Interest costs

– Compare to the competition, Gati has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

High bargaining power of channel partners in Air Courier industry

– because of the regulatory requirements in India, Gati is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Air Courier industry.

High cash cycle compare to competitors

Gati has a high cash cycle compare to other players in the Air Courier industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High dependence on Gati ‘s star products

– The top 2 products and services of Gati still accounts for major business revenue. This dependence on star products in Air Courier industry has resulted into insufficient focus on developing new products, even though Gati has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, Gati has high operating costs in the Air Courier industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Gati lucrative customers.

Slow to strategic competitive environment developments

– As Gati is one of the leading players in the Air Courier industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Air Courier industry in last five years.

Ability to respond to the competition

– As the decision making is very deliberative at Gati, in the dynamic environment of Air Courier industry it has struggled to respond to the nimble upstart competition. Gati has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Workers concerns about automation

– As automation is fast increasing in the Air Courier industry, Gati needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gati is slow explore the new channels of communication. These new channels of communication can help Gati to provide better information regarding Air Courier products and services. It can also build an online community to further reach out to potential customers.

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Gati Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Gati are -

Developing new processes and practices

– Gati can develop new processes and procedures in Air Courier industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Air Courier industry, but it has also influenced the consumer preferences. Gati can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Gati can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Air Courier industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gati can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Gati can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Building a culture of innovation

– managers at Gati can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Air Courier industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Gati can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Loyalty marketing

– Gati has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gati to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Gati to hire the very best people irrespective of their geographical location.

Better consumer reach

– The expansion of the 5G network will help Gati to increase its market reach. Gati will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Learning at scale

– Online learning technologies has now opened space for Gati to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Use of Bitcoin and other crypto currencies for transactions in Air Courier industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gati in the Air Courier industry. Now Gati can target international markets with far fewer capital restrictions requirements than the existing system.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gati can use these opportunities to build new business models that can help the communities that Gati operates in. Secondly it can use opportunities from government spending in Air Courier sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Gati can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Gati to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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Threats Gati External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Gati are -

Easy access to finance

– Easy access to finance in Air Courier industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gati can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Regulatory challenges

– Gati needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Air Courier industry regulations.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Gati in the Air Courier sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Gati in Air Courier industry. The Air Courier industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Stagnating economy with rate increase

– Gati can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Air Courier industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Gati may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Air Courier sector.

Environmental challenges

– Gati needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Gati can take advantage of this fund but it will also bring new competitors in the Air Courier industry.

Technology acceleration in Forth Industrial Revolution

– Gati has witnessed rapid integration of technology during Covid-19 in the Air Courier industry. As one of the leading players in the industry, Gati needs to keep up with the evolution of technology in the Air Courier sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Gati needs to understand the core reasons impacting the Air Courier industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Air Courier industry are lowering. It can presents Gati with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Air Courier sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Gati can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Gati prominent markets.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Gati business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Gati demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Air Courier industry and other sectors.

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Weighted SWOT Analysis of Gati Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Gati needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of Gati is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of Gati is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Gati to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Gati needs to make to build a sustainable competitive advantage.

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