By Chander Agarwal, an EO New Delhi member and Executive Director of Transport Corp Of India (TCI), a leader in logistics
When I started thinking about entrepreneurship in 2001, the world was slower and simpler. The Internet bubble had just burst and the world had witnessed the worst attack on mankind by mankind themselves. At the time, I had just received my BSC degree from an American school, with specialized training in “lean logistics.” It was time for me to head back home to India and put my newfound knowledge and skills to good use.
Imagine the feeling you get when you leave a country with the world’s best highway system, airports and railways … only to arrive to a country with none of those. How can one expect to start a business in that kind of environment? Especially a logistics company, like my family had also done? Thankfully, I came back to my home country with a serious dose of enthusiasm, a definite plan and a determination to be different.
At the time, the logistics landscape in India was very unorganized, and there were only three players listed on the stock exchange. I understood that lowering the price of my offerings was the easiest, fastest and most “brainless” way to deter what competition I had. However, my management did not allow me to fully lower prices, as client engagement was of prime importance.
What I began to understand as I lay my stake in the local business landscape was that Indian customers are very price sensitive, and will only pay more when they see an intangible benefit; the tangible benefit being that their goods are delivered on time. So I thought to myself … what if I provided them with an intangible benefit of real-time information and quicker shipment. Bazinga! This must be done!
As no one was doing it at the time, I had found my niche. There were hefty investments involved in getting things going in the beginning—the kind of service I was offering was unheard of in the industry—and the entire process took three years to fully realize. As of now, we are the only express logistics company that “moves” completely on bar codes. Competitive advantage created!
Before long, however, I saw the “transporter evangelists” trying to embellish our new development with their own versions, and at a lower price! It was time for serious differentiation to occur. I set out first by differentiating our express transportation services into “air cargo,” “surface cargo” and “rail cargo.” And then I put the entire “bowl of soup” business into one gourmet-size “feast of businesses.” Doing so separated us from the competition, and made us stand out in a country in need of logistics. Mission completed.
The most important feeling I had after completing this exercise was excitement. Formatting the organization in a structured manner to keep up with the times was necessary, especially when it came time for bracing economic upheavals, political uncertainties and customers’ ever-increasing demands. And of course for exponential growth. All in all, though, I learned a valuable lesson along the way: differentiation is king in business!