Group No. 13 analyzed the express delivery service industry in India. Blue Dart Express is the market leader with over 40% market share in air cargo. It has an extensive network across India and provides fast and reliable service. While Blue Dart has sustained competitive advantages through its brand, network, and alliance with DHL, competition is increasing from players like Gati and DTDC who are improving technology and expanding networks. To maintain leadership, Blue Dart should focus on customer service, expanding reach, adopting new technologies, and partnering with e-commerce companies.

1. Group No. 13 – PGP 2012 – Section D
1211254 - Chandan Satapathy
1211269 - Ashlesha Vishnu Kadam
1211284 - Pushpendra Singh
1211299 - Sherene Annabel
1211314 - Vishrut Shukla
THE EXPRESS DELIVERY SERVICE INDUSTRY

2. Industry Overview
- Logistics evolved from being a passive, cost-absorbing
function to one that provides competitive advantage
- Drivers: Trade, regulatory changes, infra builds, 3PL
- Challenges: Fuel costs, labour shortage, Indian Post
- Express Delivery: Collection, transport, delivery of
documents, printed matter, parcels, other goods on an
expedited basis, while tracking and maintaining control
Different Sectors of the Logistics Industry
Porter’s Five-Forces Analysis
Unorg. & fragmented suppliers
Low threat of fwd integration
Availability of substitutes
Low switching cost
SPs threat of bkwd integration
Capital requirement & technology access
Economies of scale, delivery n/w access
Operating costs – fuel, manpower, infra
Brand identity & switching costs
High Concentration
Limited product differentiation
Low switching cost
Significant capital, fixed costs
Standard & undifferentiated service
Large business buyers, price concern
Contribution to quality and cost
No threat of fwd/bkwd integration
Need is time-bound, reliable service
Limited availability of close substitutes
Substitute’s price-value proposition
Switching cost if adopting IT as substitute
> Government – Regulations, fuel price hikes, infra development, control of Indian Post
> Goods and Service Tax (GST) to be positive; allowance of 100% FDI encouraging step
> Express Industry Council interacts with govt., customs to get clearances & resolve issues
Summary of Facts & Figures
> Logistics Industry’s Contribution to GDP - 13%
> Organized vs Unorganized Players – 65% organized
> Employment provided to over 1 million people
> Market – Rs. 143.4 bn (’11), Rs. 359.9 bn (’16)
> CAGR of entire Logistics Industry - 9.9%
> CAGR of express delivery - 20.2%

3. The Firm – Blue Dart Express
- South Asia’s premier courier & integrated air express package SP
- A group company of the Singapore-based DHL group (81% equity)
- Started operations in ’83; incorporated as private company in ’91
- Market leader in air cargo, commands more than 40% of market
share in air express logistics segments, 12.8% in ground market
- Customer-focused; maintains reliability levels of 99.96% in service
- Strong pricing power, results in above-industry margins (10-12%)
Performance of Blue Dart’s Stock Relative to Sensex
Blue Dart DHL in Numbers
> No. of employees - 7841
> Fleet - 5885 ground delivery vehicles
- 7 dedicated cargo aircrafts
> Locations Serviced - 36,474 across India
> Countries Served – 220 (with DHL)
> Annual Shipments - 77 million
(domestic), 0.66 million (foreign)

4. Analysis of Blue Dart’s Strategy
Generic Strategy of Blue Dart
- Firm employs strategy of differentiation based on
service level and geographical reach via its strong n/w
- Innovative product mix, customized to meet specific
needs of both business and retail customers
- Product mix ensures sharing of resources & utilization
- Strong global distribution through its alliance with DHL
- State-of-the-art technologies in express logistic industry
> Smart Trucks –intelligent route-planning capability,
CO2 reduction under the GoGreen drive
> Trimble GPS system in all truck for real-time tracking
> SOTI MobiControl - Location-specific delivery assistant
- Blue Dart charges a premium (upto 50%) over other
air carriers on account of higher service levels, efficiency
and larger portfolio of services
- Increasing focus on ground services market poised to
grow at ~25-26% every year; creating a niche presence
- Introduction of value-added products like temperature
controlled logistics and services like demand-draft on
delivery, freight on demand etc. for accelerated growth
by charging higher margins
Resource-Based View
Structure
Support
from DHL
- Valuable
- Rare
- Inimitable
- Non-Substitutable
Brand
Value
- Valuable
- Difficult to imitate
- Non-Substitutable
Sustained
competitive
advantage
Fast and
Reliable
Service
- Valuable
- Not rare
- Difficult to imitate
- Non-Substitutable
Temporary
competitive
advantage
Extensive
Network,
Infra &
Tech.
- Valuable
- Not rare
- Imitable
- Non-Substitutable
Temporary
competitive
advantage
Sustained
competitive
advantage

5. Competitive Landscape
 Revenue: Rs. 15171 mn
 78000 employees
 PAT: Rs. 1242 mn
Key Success Factors
Strategic Alliances
Market Cap
Rs. 54,874.44 mn
45.91% (Industry Leader)
 An unmatched extensive pan India
infrastructure advantage
compared to its competitors
 Aircraft fleet ownership and high
service standards
 Tailor made services with the
most advanced communication
systems for specific industry needs
 With group company DHL,
the No.1 international air
express services provider,
for international deliveries
and pick-ups
Market Cap
Rs. 2,471.86 mn
 An intrinsic network that spans
the length and breadth of the
country covering 1,300 locations
through 345 branches
 Large warehousing space with
fully automated system & a highend vehicle tracking system (VTS)
 With GLS, providing easy
access for customers in
Europe
 Joint Venture with KWE
leveraging its freight
forwarding expertise and
global customer base
 Value-added services & complete
supply chain solutions to suit the
unique needs of customers
 Well connected routes which
cover 13,000 delivery locations
across India.
 Joint venture with Mitsui
and Co. Ltd.
 Joint venture with CONCOR
for bulk multi-modal
logistics solutions
 Strategic tie-ups with global airexpress companies
 Low cost shipments along with
timely delivery
 Joint venture with Eurostar
 With Kerry Logistics in
China
Trans Corp
 Revenue: Rs. 11911 mn
 32000 employees
 PAT: 416 m (in Rs)
Market Capitalization
•
•
 Revenue: Rs. 19594 mn
 5000 employees
 PAT: 595 m (in Rs)
Market Cap
Rs. 4213.22 mn
DTDC
Gati
Blue Dart + DHL
Company Size
 Revenue: Rs. 5500 mn
 13000 employees
Market Cap
Rs. 3250 mn
Due to imitation of the track and trace facility of Blue Dart, provision of multiple modes by other players at
rates much lower than that of BDE and with differentiated services
Blue Dart challenged to maintain its leadership position amidst growing competition and imitation

6. Challenges & Recommendations
Challenges & Changes in the Industry
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High correlation with GDP growth rates
Entry of foreign majors like FedEx and UPS in the Indian express
delivery market
Fluctuations in oil and aviation fuel prices
Increasing market share in the ground services market
The upcoming 3PL/4PL logistics wave due to entry of big retail
players in Indian market
Emergence of e-commerce websites as big buyers
Recommendations
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Retain the market leadership position via differentiated
service: value focus on customer relationship, ease of payment
options and elaborate coverage network for delivery services
Increase footprint in Tier II and Tier III towns
Continuously adopt new technologies to improve workforce
efficiency
Provide specialized end-to-end logistics services like cold
storage, trans-national shipments
Increase portfolio of value-added services to create
differentiation in the industry
Create lock-ins with the e-commerce platform owners to
become their preferred shipper