Beacon september Issue 2017

Volume 5, Issue 9 | 1
BEACON
VOLUME 5
ISSUE 9

2 | Sept 2017
VOLUME 5
ISSUE 9
ABOUT US
The SIMCON - SIMSREE consulting club is an initiative
started in 2012 for those students in pursuit of excellence in
management consulting and strategic management. Aimed at
creating awareness among the students about consultancy as a
discipline, the club strives to maintain strong relations with top
consultancy firms and provide platform to craft highly skilled
& competent consultants from SIMSREE. The club is a resource
for information about consulting and a place for students to
obtain real-world consulting experience.
SIMCON provides an avenue of interaction among faculty,
students and alumni through competitions, live projects,
guest lectures, and conclaves. For this purpose the club has
also been publishing its monthly newsletter – BEACON (BE A
CONSULTANT) and maintains a FACEBOOK PAGE where latest
news and development in the consulting industry are posted.
MISSION
To create awareness
amongst the students
about consulting industry &
its latest trends.
To maintain strong relations
with top consultancy firms.
VISION
To provide platform to craft
highly skilled & competent
consultants from SIMSREE.
To provide exposure to
students via competitions,
live projects, guest lectures
& conclaves.
Contributions invited:
To make this feature a successful effort, we seek continued involvement
and contribution from our readers, that is YOU. We invite articles,
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industry news, consulting trends, a joke, a cartoon or feedback, we are
eager to hear from you. So go ahead, do your research, pen down your
thoughts and mail your entries to simcon.simsree@gmail.com.
Best Regards,
SIMCON - SIMSREE CONSULTING CLUB
OUR PRESENCE
/simcon
simconblog
SIMSREE
Consulting
Club

OUR TEAM
Apurva
GHUTUKADE
Niranjan
SATAM
Aditya
SINGAL
Jasprit
TANEJA
Vidhi
THAKKER
Ajay
KHONA

4 | Sept 2017
OUR TEAM
Abhijeet
RAUT
Viral
BHAVSAR
Venkatesh
JOSHI
Roshan
UMEKAR
Naveen
SHARMA
Kiran
MARU
Ayesha
RASHID
Ashwini
PARATE

CONTENT
06-14 15-22
OUR TEAM 04
BRAND ANALYSIS 15
CONCEPT OF THE MONTH 29
COMPANY ANALYSIS 06
CASE ANALYSIS 23

6 | Sept 2017
TESLA: Embracing
Innovation and
Sustainable Environment

Naveen Sharma
Kiran Maru
Introduction
Tesla, Inc is the American Automaker based in Palo
Alto, California. It was founded in San Carlos, Califor-
nia in the year 2003 by Mr. Martin Eberhard and Mr.
Marc Tarpenning though company also considers Mr.
Elon Musk, Mr. JB Straubel and Mr. Ian Strabel as its
co-founders. Elon Musk became the chairman after
contributing 6.35 million in the 1st round of investment.
The founders believe that we did not need to compro-
mise to drive electric i.e. electric vehicles can be better,
quicker and more fun to drive than gasoline cars. Tesla
not only builds all-electric vehicles but also infinitely
scalable clean energy generation and storage products.
Consumer Report (American Report) named it the Top
American brand and 8th globally in the year 2016. Tesla
became the 10th most valuable brand in the world in
the same year. Tesla briefly surpassed Ford Motor Com-
pany & General Motors in market capitalization in the
year 2017. The success of the company can be estimat-
ed from the fact that Company sold 2,450 units of its
first model Roadster, 37,000 units of 2nd car Model X,
1,71,600 units of Model S. There were 5, 00,000 reserva-
tion for Model 3 which represent potential $ 14 billion
sale for Tesla. The revenue of the company in year 2017
is $ 11.58 billion and it is publicly listed on NASDAQ
stock market. The company employs 33,000 employees
currently.
Tesla Logo
Tesla Logo is designed by RO-studio, a design firm based
in New Jersey. The Tesla logo represents the cross-sec-
tion of an electric motor. The main body of the “T” rep-
resents one of the poles that stick out of a motor’s rotor,
with the second line on top representing
a section of the stator. The Logo is rather simple and cre-
ative at the same time. The main objective was to reflect
the idea of efficient electricity usage as engineers were
reluctant to prove that electric engines can be powerful
and endurable.
Situation Analysis
Analysing Auto Industry in United States of Amer-
ica
Market Structure - Consolidated market where top
three players cover almost 50 % of market share
Source: Statista
Company Analysis
Source: Statista

8 | Sept 2017
Competition– There is oligopoly in US Auto market
Competitive Structure – Out of the total market share,
0.90% consist of electric cars in US
Growth Driver of electric cars– Cutting edge Tech-
nology, move towards sustainable environment, reduc-
tion in battery prices which is as important component
of a car, pollution concern, and Good Tesla products
Growth resistors of electric cars– Capital intensive
market, inadequate infrastructure, expensive cars
Analysing Competition
Direct– Nissan Leaf, Renault-Nissan Alliance, BYD
Auto, Volvo, General motors, Ford Motors Company,
Toyota Motor Corporation, Fiat Chrysler Automobiles
Indirect– Amtrak, BNSF railway, Honda Rebel, Yama-
ha SCR 950, Air-travel
Broad– House, property, club membership, invest-
ments
Pestle Analysis
Political Analysis- The U.S. government has shown
keen interest in renewable energy and electric vehicles
and granted Tesla a $465 million low interest loan from
the Department of Energy which helped the company
to attract many investors. Five states tried to lure Tesla
by throwing in free land, tax incentives and other bene-
fits when Tesla was building new plant in year 2013. Ne-
vada won by offering incentive package of $1.3 billion
and became home to $ 5 billion Giga factory to build
cars and super batteries providing 20,000 job opportu-
nities. The federal government offers a $7,500 tax credit
for purchasing electric vehicles in USA.
Environmental Analysis- Electric cars are promoted
as the ambassadors of clean energy and will revolution-
ize current Auto industry which is major contributor to
global warming. Please note that Tesla electric cars emit
carbon through other forms as it too needs energy. It to-
tally depends upon how the local grid produces energy
where Tesla batteries are charged. Lighter body required
in the components demand lot of energy which does
not make electric cars less damaging than the gasoline
cars but in the long run these cars help to save 30%-40%
of carbon emission.
Technological Analysis- Tesla has made the world be-
lieve that electric car can definitely replace gasoline cars
in the next decade through its technology in making
cheaper batteries in affordable range. From one third of
space covered by batteries in Roadster to a compact flat
slab fit between wheels in Model S, their improvements
in batteries, aerodynamics and rolling resistance are
leading to an increase of 40%-50% in range efficiency
of Roadster, Tesla has come a long way in a short span
of time. The car range, performance, unique features &
specifications give a competitive edge to Tesla products
solely on the basis of technological advancement of Tes-
la.
Legal Analysis– Tesla has been involved in many legal
controversies. In year 2009, Mr. Martin Eberhard, one
of the co-founder of Tesla filed suit against Tesla and
Musk for slander, libel and breach of contract. This case
was settled out of the court. In 2016, Singapore became
the only country in the world to impose an environmen-
tal surcharge on a fully electric car. VICOM ltd. who
conducted tests on behalf of Singapore’s Land Transport
Authority found that Tesla is using more energy than
what is claimed by the car company. It has faced many
dealership disputes in Unites States where many state
laws ask companies to sale their cars through indepen-
dent dealers but Tesla contradicts the idea saying that
they cannot rely on third party for their sales.
Economical Analysis– United States encourage pro-
duction of non-polluting vehicles by giving legislating
incentives for manufacturers, tax credits. Tesla has fi-
nanced its operations through sales income, stock offer-
ing and bond sales.
May 2013- Tesla raised $ 1.02 billion to repay their loans
February 2014- $2billion from bonds to build Giga fac-
tory
August 2015- $738 million in stocks for Model X
May 2016- $1.46 billion in stock out of which $1.26 bil-
lion for the Model 3
Tesla has risen over $4.5 billion since IPO in 2010
The expenditures for expansion of production for Mod-
el 3 as well as Giga factory led to current net losses but
increase in demand and adhering to supply, low prices
and whole shift of Auto Industry towards Electric cars
in next decade seems company should be optimistic re-
garding profits in future.
Porter’s 5 forces Model
Threat of new entrants-High
Less Entry Barrier -Drop in electric vehicle battery cost,
geo-political reforms & incentives, increase in pollu-
tion, increase in oil prices
Product differentiation- Energy conservation practis-

es is moving auto companies quickly towards this new
product
Capital Requirements- It is a capital intensive industry
where established players are investing huge money
Switching cost- Switching cost is low as customers can
buy gasoline cars at the same rate
Exit barriers-companies are currently investing some
part of their capital in Research & Development but this
industry certainly requires heavy investments which
prevents leading companies from exiting the industry
Bargaining Power of Suppliers- low
Tesla has been clear with suppliers regarding timeline
and expectations. The company has stated publicly that
it can only be as successful as it weakest and slowest sup-
pliers. If a supplier isn’t satisfying Tesla, the automaker
finds another option. Tesla itself manufactures the basic
components of cars like electric motor, battery pack and
charger. Most of the material suppliers are moderately
sized companies; hence they have a limited influence
on the automobile industry. Some directly transact with
the company while some suppliers use third party sell-
ers to provide raw materials to Tesla.
These suppliers have low level of forward integration
thus having a limited regulation over its sale and distri-
bution of materials.
Bargaining power of buyers– High
Switching options are available to the customers but
Tesla cars are at par with most of the luxury sedans
and even outperform most of them. With the launch
of Model 3 which is comparatively cheaper to previ-
ous Tesla models, the bargaining power of buyers may
change to large extent
Threat of Substitute– High
Lead crystal technology is an alternative to wind, solar
& grid energy. The technology of making air industry
electric can pose threat. Huge advancement & transi-
tion in short span of time in current technological sce-
narios will always keep company on the toe.
Industry- Highly Attractive
The industry puts forth many challenges in next 10
years from all 4 aspects but still the industry is attrac-
tive looking forward to the price of electric cars, more
emphasis on green energy and young demographic in
countries. Established Auto companies have to move
towards it otherwise they might be out of market in
coming decade as more dependence on OPEC coun-
tries, geo-political reforms, climatic change, emphasis
on sustainable energy indicate this.
STP Analysis
Initial target of the company was to make expensive,
high end product targeted at affluent buyers and then
eventually move to more competitive market at lower
price points.
Segmentation & Targeting- the Company is in its
mission ‘to accelerate the world’s transition to sustain-
able transport’ relates to consumers psycho graphical
traits with respect to their attitudes towards environ-
mental sustainability.
Primary Market
Demographics
Age Range: 30-60
Upper Middle Class Families
Household Income of $80,000+
Number of People: 125,704,226 (2010 Census)
Psychographics
Concern about gas consumption, economic value in car
Desire for an affordable luxury car with high safety val-
ue
Secondary Target Market
Demographics
Age Range: 18-24
College Students
Income is negligible
Psychographics
Well educated, future prospects of having a specialized
profession
Going to a prestigious, well-known, university
Number of People: 30,000,000 (2010 Census)
If we talk about Model 3, Tesla is targeting Mass mar-
ket
Positioning
Mr. Elon Musk has always emphasised on Tesla’s pur-
pose as acceleration towards sustainable solar, electric
economy. The company has positioned its product as

Giga Factory
Tesla Fremont Factory
Tesla Super Chargers
clean, high performance cars. Tesla has been able to
make snobbish effect in American high income popu-
lation as well as in the celebrity circle due to companies
brand positioning.
Model 3 Manufacturing

Crafting of Brand Positioning
Car Tesla Model 3
Target Segment Mass Market, Tesla en-
thusiast
Consumer behaviour Price insensitive, Tesla
experience, energy con-
scious
Nature of Competition Highly competitive mar-
ket
Points of Parity Speed, comfort, driving
Points of Difference Design, price, brand Tesla
Brand position A mass market electric
luxury sedan
Validation of the brand
position through 2D
Desirable 5 lakhs reservation
reflects the demand,
government initiatives
& reforms, Must-have
psychographic traits
Deliverable Tesla has delivered world-
class product in chal-
lenging electric segment,
they will surely stand on
expectations
Financial Analysis of Tesla
The company’s revenue is growing with the rate of
51.49% every year. The gross profit returns are at 51.90%
Source: Statista
Source: Statista
Source: Statista
Source: Statista
Figures in million dollars

14 | Sept 2017
CAGR. The company spent almost half of the gross prof-
it amount in R&D which demonstrates the challenges a
pioneer in Auto Industry has to face. High debt amount
led to huge interest charges which have grown at a sub-
stantial rate of 82.08%. The company is in regular loss
which indicates the significance of success of Model 3
on the future of Tesla.
The financial analysis shows that last two years have
been a testing time for the company when it had ex-
panded its production four-fold and further plans for
operation expansion by ten-fold in next 3 years as com-
pany will increase its production from current 70,000-
80,000 units to 5,00,000 units a year.
Marketing of Tesla
Tesla has no advertising, no ad agency, no CMO, no
dealer network. The brand has clearly struck a chord
with its fans. Tesla fans are crazy advocates. They at-
tach deep emotional significance to the car. They’re not
just paying for a mode of transportation; they’re paying
for a slice of the future. Tesla also involves in PR mar-
keting as CEO Mr. Elon Musk understands the power
of showmanship. He can be seen in lots of interviews,
cameos & media appearances. Tesla depends on word of
mouth publicity. They have clearly built a brand without
spending on advertising. Elon Musk use social media
to communicate with people who want to engage with
Tesla which is working for the company for sure.
The Road Ahead
The success of Model 3 plays most important role in the
future of revolutionary company Tesla because poten-
tial sales of $14 billion depends on it. The financial po-
sition in which Tesla is currently will not be able to sup-
port company for a long time therefore, it requires the
reservation of Model 3 above 5,00,000 to not only deliv-
ered on time but also fulfil the expectations which led
to so many orders. If Model 3 is successful, then many
challenges which Tesla face regarding to debt, interest
expenses & further expansion can be taken hands on.
As far as long run is concerned, the Auto Industry has
realized that electric cars are the future and that is the
reason Tesla should be ready for intense competition in
coming years.
Conclusion
Tesla has changed the perception of people around elec-
tric cars from its inception day. Electric cars have trans-
formed from slow, low range cars to fast, high perfor-
mance luxury cars due to the vision of Mr. Elon Musk.
Tesla story shows us that some companies change the
dynamics of the industry solely on the basis of ideas
executed with firm belief even if odds are not in their
favour. Tesla patents had been removed in 2014 in the
spirit of open source movement which can be used by
any company; this demonstrates Mr. Elon Musk inten-
tions about doing businesses beyond profits for sustain-
able & better world. Whether the company would be
successful or not is the different story altogether but
for now, Tesla has surely made the mark by making the
world believe in the technology which was ignored by
big established auto companies claiming it was ahead of
times. Tesla is the great example of business resilience at
its best. If companies do not follow it in next decade, we
do not know about the environment but they surely are
going to be extinct.

Apple Inc: Say Hello
To The Future
“Innovation distinguishes between a
leader and a follower” – Steve Jobs

16 | Sept 2017
Introduction
Once known as the Apple Computer Company, Apple
was developed by the three co-founders, i.e. Steve Jobs,
Steve Wozniak and Ronald Wayne. The company came
into being on 1st April 1976, when they launched their
first product, the Apple-I.
The company holds its HQ in California, U.S. After the
resignation of Steve Jobs, Tim Cook has accepted over
the office of the CEO of the company.The company has
about 116000 (2016) full-time employees and gained
a worldwide revenue of nearly $215 billion in the year
2016 (fiscal year).The company enjoys a huge brand loy-
alty and is rated as the world’s most valuable brand
Apple is the biggest information technology company
in the world in terms of gross revenue and second big-
gest in terms of mobile manufacturing after Samsung.
Therefore, the history of the fellowship can be sum-
marised as follows:
Apple Inc.
Brand Analysis
Viral Bhavsar
Ayesha Rashid

Apple’s Global presence
Apple has about 498 retail stores in 22 countries world-
wide as of July 2017. Until January 2016, more than One
billion Apple products were used actively in the world.
Product Portfolio
Apple’s products can be classified as Hardware, Software
and Services. The hardware device includes MacBook,
iPhone, iPod, Apple TV, Apple Smart Watch and Com-
puter Accessories. The software products are operating
systems (OS X and iOS), iTunes, Safari, iWork, iLife,
etc. The services supported by Apple include, Apple Pay,
Apple Store, Apple SIM etc.
The following pie chart shows the product-wise revenue
for the FY 2015.

18 | Sept 2017
Swot Analysis
MAJOR COMPETITORS
Smartphone Market
Apple’s main product iPhone has a major competition
from Samsung Electronics, Huawei, Oppo, and Vivo.
Other companies hold a different target segment or
have a very small market share to compete with the iP-
hone. In addition, Android phones share a major mar-
ket share at present and iOS has only 12.5% share.
Tablet Market
The tablet market has seen a decline due to the increase
in the use of phablets and larger screen phones available
in the market. Nevertheless, the iPad has still kept up its
presence in the marketplace and sustains a considerable
market share.Here as well, Samsung Tabs are the major
competitors of iPad.

Personal Computers of MAC
Apple does not hold a substantial market share in the
personal computers as compared to the iPhone since
there are many players in this marketplace who provide
dependable quality products at much lower costs.In ad-
dition, Windows loaded personal computers occupy a
major share in this quad.
Apple Smart Watch
The Apple Smart Watchhas seen a huge success since
its inception. Nevertheless, it has experienced a down-
fall in the sales, nonetheless, it still remains a leader in
terms of market share and faces a strong competition
from Samsung and Garmin.
STP ANALYSIS
SEGMENTATION
The process of segmentation allows marketers to ana-
lyze different segments and then figure out that if there
is a market in which need isn’t being met and can a
product be created to satisfy that need. Apple prod-
ucts are segmented on the basis of age, occupation, and
profession. Product pricing is such that only upper and
middle-class people can afford to buy them. In the be-
havioral segment, Apple is delivering to its customers,
innovative products, and new designs being cognizant
of their demands.
TARGETING
Apple’s market strategy aims at customers who have
high loyalty to this brand. Such customers belong to
a high or middle-income group and can pay for new
products launched by the company.The second group
consists of technology savvy people who have insights
of the uses of the product and are singular about the
innovations in the new models of the company.The
third section of Apple users are the ones who practice it
for upholding their social condition and want to stand
aside from the crowd.
POSITIONING
Apple offers the exceptional experience to its clients
through easy to use interface and brilliant presenta-
tion.The operational benefits of a brand are not the sole
path to promote loyalty.Customer loyalty cannot be ad-
vanced only by functional benefits of a brand, consum-
ers’ needs should be created by directing their emotion-
al benefits for better brand awareness.Apple’s emotional
branding is the key to its endurance; a mark that is felt
in the heart and mind of the consumer.Apple’s brand is
reflected through their core beliefs about imagination,
invention, and innovation. The company renamed itself
Apple Inc. rather than Apple Computer which shows
company’s openness to research and innovation in
products other than computers.
Marketing Strategy
Branding Strategy
Apple tries to connect with its users at a very emotional
level and make them feel proud of owning their prod-
ucts. They believe in empowering people through tech-
nology and build their life more comfortable.It aspires

20 | Sept 2017
to create the life of their customers easier and connects
with them to supply the ultimate customer experience.
They have produced a community of specific device us-
ers and make the customers feel that they should be a
percentage of this community rather than being left out.
The company believes in ingraining their parent com-
pany’s name with every product and want the client to
know their wares by the name of Apple due to the huge
reputation that Apple has made over a long time. It has
also made its products distinguished by using an ‘i’ with
all their product names, namely, iPhone, iPad, iMac etc.
The Halo Effect
Apple has used the Halo effect to increase the sales of
their computers by linking them to their famous prod-
uct, the iPod.Since the iPod was really renowned among
the people, Apple considered that a connection with the
computer for the product will help supercharge their
sales. Hence, they marketed the computers by using the
slogan, “from the makers of iPod”. In a similar way, the
halo effect was extended to the iPad. As the clients were
well used to the iPhone and were intimate with its touch
screen could adapt to it better.
Keep it Simple
Apple strongly believes that it is necessary to maintain
their merchandise as well as their business schemes.
They don’t overpower the client and deliver a simple
way of functioning.Their products too, reflect this phi-
losophy and hence deliver a simple and sleek expression
and design, which will be easy for the client to utilize.
Standardisation Process
Unlike a few brands, who prefer to customise their
products as per the local terms, Apple refuses to make
any change in its products either in features or looks
and hence maintains a standard look. This approach has
led to the development of Apple as a global brand with
a strong identity and enhancing the feeling of common-
ness and equality in the people’s mindset. Nevertheless,
Apple does believe in personalizing the product at some
point, hence each of its stores has certain protocols to
cater to the local population, which further increases
the level of commitment and satisfaction towards the
mark.
Marketing Campaigns
1. 1984- Why 1984 won’t be like 1984
In 1984 Apple launched the Macintosh and the adver-
tisement that was launched before it was highly inspired
by the novel 1984 by George Orwell and read a cap-
tion at the end stating, ‘Apple Computer will introduce
Macintosh and you’ll see why 1984 won’t be like 1984’.
The advertisement that was directed by Ridley Scott
was hated by the board of directors at that time. How-
ever, the Macintosh went on to sell 72,000 computers
in 100 days and was a massive success for the company.
In 2004, Apple relaunched the same campaign by add-
ing the iPod in the advertisement and keeping it exactly
identical to the original one.
2. 1997- Think Different
Later, on the return of Steve Jobs as the CEO, the com-
pany discovered a fresh wave of branding led by Jobs.
The slogan ‘Think Different’ was an onset on the then
rival IBM’s ‘Think’.The commercial focused on the leg-
endary people who think differently and cause modifi-
cations in the universe.Jobs wanted to mark the prod-
uct for independent and strong thinkers.The campaign
was considered to be the most successful campaign of
all by the Tech Republic.
3. 2007- Hello
Apple’s first iPhone was released in 2007, and the Hello
advertisement was launched then during the Oscars,
where 31 Hollywood stars were seen saying Hello from
their movies and the ad culminated by showing a ring-
ing iPhone, emphasizing the grandness of a first touch-
screen phone, which afterward became a huge winner
in the marketplace.

4. 2013- Misunderstood
This advertisement won an Emmy Award for the most
outstanding commercial, where a young boy was too
busy on his iPhone and later discovered that he was pro-
ducing a movie for his family as a Christmas present.
The commercial was an extremely emotional one and
clearly established that an iPhone was capable of a great
deal more in the novel edition. It was used to promote
iPhone 5S and its AirPlay technology.
5. 2014- You are more powerful than you
think
Apple promoted it iPhone 5S by using the Tagline, ‘You
are more powerful than you think’. The commercial
showed the multi-utilisation of the iPhone and all the
advanced functions, it can perform to improve the lives
and work of people.Three commercials were shown
with the same tagline named as ‘Dreams, ‘Powerful’ and
‘Parenthood.’
6. 2017- Switch to iPhone
Apple launched three ads to emphasize on their ‘Switch
to iPhone’ campaign and highlighted the smooth tran-
sition from Android products to iPhone and titled
the Tory ads as iPhone-Smooth-Apple, iPhone-Se-
curity-Apple, and the iPhone-Contacts-Apple. They
even improved their site which was responsible for the
switching and introduced a tagline, ‘Life is easier when
you use the iPhone.’ This campaign is targeted to all the
users who are keen to join the iPhone community but
have been hesitant till now.
7. 2017- The Future is Here: iPhone X
Apple launched its premium and the most expensive iP-
hone in 2017. The phone is being commercialized as the
phone of the hereafter and the monumental price tag
is being freed by calling the product as revolutionary.
The deletion of the home button and the initiation of a
full screen along with animojis, better processors and
improved design, camera and functions, the phone has
created a strong impact in the market.Apple wants to
demonstrate that the smartphones are currently step-
ping into their teenage years and are beginning to de-
velop.
REFERENCES
[1] http://www.brandquarterly.com/globalization-ap-
ples-one-size-fits-approach
[2] http://appleknowledge.xyz/apple-competitors.html
[3] https://mformica.blogspot.in/2015/07/segmenta-
tion-targeting-and-positioning.html
[4] http://www.businessinsider.in/The-best-ad-Apple-
produced-from-each-year-since-its-1984-Super-Bowl-
hit/2015-Apple-Watch/slideshow/57346372.cms
[5] https://www.marketing91.com/marketing-strat-
egy-apple/
[6] https://www.digitaltrends.com/apple/apple-ip-
hone-x-news/
[7] http://www.versiondaily.com
[8] http://www.macworld.co.uk
[9] https://www.apple.com/newsroom/2017/09/the-
future-is-here-iphone-x/
[10] https://www.marketingweek.com/2017/09/13/
apple-gambles-premium-iphone-x-rivals-worried/

Mumbai Dabbawalas:
Packed,Delivered to Per-
fection

24 | Sept 2017
Mumbai Dabbawala : Delivering Mom’s Love
The journey of Mumbai Dabbawala began around 127
years back when a Parsi banker wished to eat a home
cooked meal in his office. He gave this opportunity to
the first Dabbawala and this gave birth to an outstand-
ing home cooked meal delivery service in the financial
capital of India. Many other people liked this concept
and the demand for Dabba Delivery Service saw a steep
increase.
The Dabbwalas are mainly descendants of the soldiers
of Chatrapathi Shivaji Maharaj. This system was con-
ceptualized by Tukaram V. Gadade and first began in
Girgaon with a meagre price of 2 aanas. A charitable
trust was registered in 1956 under the name of Nutan
Mumbai Tiffin Box Suppliers Trust. In the year 1968,
a commercial arm of this trust was registered as Mum-
bai Tiffin Box Supplier’s Association. Presently, there
are over 5000 Dabbawalas servicing 2,00,000 customers
in Mumbai. Their system is built on a combination of
characteristics that are unique to Mumbai.
The Mumbai Dabbawala are known widely over the
world for their frugal innovation, dedication, reliabil-
ity, rigorous adherence to processes & standards and
mastery in logistics. It is served as an outstanding ex-
ample of a six sigma certified organization. The semi-
literate workforce has achieved this performance in an
eco-friendly way and without any use of technology.
They believe in the philosophy, “Anna Daan is Maha
Daan”(Donating food is the best charity)
Initial Challenges:
Initially they faced various challenges in terms of avail-
ability of dedicated human resources ready to face hard-
ships, uncertainty or disturbances in service efficiency
due to reliability on external parameters like public
transport, customer support etc. With increase in busi-
ness, they also faced a requirement of change in operat-
ing system so as to perform consistently.
The Way Out:
First and foremost thing they did was to have the
right people on board. Most of the Dabbawalas are from
Varakari Community which are majorly (85%) illiterate
but have strong sense of devotion towards their work.
“Work is Worship”
Second thing which Dabbawalas embraced is strict
discipline. They understood the importance of punctu-
ality for customer satisfaction. A normal day of Dab-
bawalas is as shown below. This the routine that they
have been consistently following for years.
“Customer is God”
Mumbai Dabbawala
Case Analysis
Ashwini Parate
Abhijeet Raut

Third thing which Dabbawalas invented is a very logical and easy to understand coding and distribution system.
A Distribution System Serving 2 lakh customers daily with only 1 error in every 16 million deliveries, of course
should be backed by strong supply chain principles. Dabbawalas have a very unique system of tiffin box tracking
and delivery which is backed by the topography and public transport of Mumbai. The prime activities involved
in this process are collection, sorting, transportation and distribution of tiffins. Their delivery system is as shown
below.

26 | Sept 2017
Distribution system has two main zones i.e. Collection
point Railway Station and Destination Railway Station,
where all the tiffins are collected and sorted according
to their codes which primarily denote its final destina-
tion and pick up point. Below is coding system used by
the Dabbawalas.
Previously, they used a colour coding system. But in late
90’s with a steep rise in customer base, they have shift-
ed towards an alpha numeric coding system as shown
above.
So how much you need to pay to get a world class
service by a Six Sigma level and ISO TS certified
Dabbawalas?
Mumbai’s topography and affordability along with reli-
ability on public transport (Mumbai Local trains) plays
a very important role in maintaining a healthy margin.
For distribution and collection, they primarily use bi-
cycle or prefer to walk. Even in generation of increased
penetration of motors and scooters, Dabbawalas are
happy and proud users of ethnic transportation system.
Differentiating Factors Helping Dabbawalas cre-
ating a Sustainable Brand:
Recognition and Rewards:
• In 1998, Forbes Global Magazine conducted a
quality assurance study on their operations and gave
them a six sigma efficiency rating of 99.99999. This put
them in the list of Six Sigma Certified Companies like
Motorala, GE, etc. They made 1 error in 16 million de-
liveries.
• In 2005, Prince Charles had visited Dabbawalas
during his visit to India. He had to fit in their schedule
to meet them so that their deliveries do not get affected.
• In 2007, The New York Times reported that the

services of Mumbai Dabbawalas grow at the rate of 10%
per year.
• ISO 9001:2000 certified by Joint Accreditation
System of Australia and New Zealand for accuracy
• Mr. Richard Branson travelled with them and
actually delivered a tiffin to his own employees at Vir-
gin, Mumbai with them
Challenges faced and alternatives found:
• Change in food habits of customers
Recently there has not been a significant increase in the
customer base. This is mainly attributed to the chang-
ing food habits of the customers. Increased inclination
towards fast food, easy availability of food, in house eat-
eries established by large corporate offices, and move-
ment of office goers from Mumbai to other cities in the
country or outside India.

To tackle this issue, Dabbawalas are concentrating on
the customers beyond 40 years of age. Since these are
the customers who are more conscious of health and are
advised to consume home cooked meals.
• Threats from Food Delivery Apps and Start-
ups & Inflexibility in delivery timings
Food delivery Apps deliver food at no delivery cost.
With the Dabbawala service, the customers have to pay
delivery charges over and above the prices of meals.
Also, the discounts and variety of food offered by the
food delivery apps are hard to match.

To keep up amidst the challenges thrown by the newer
food delivery start ups, Dabbawalas are considering ex-
pansion of their brand and planning to deliver products
like organic milk, vegetables, etc. Dabbawalas have also
started using motorcycles at some places.
• Changing Family Roles
Since more and more women have begun to step out
of their house to work, there is nobody left behind at
home to cook lunch and hand it over to a Dabbawala.
The entire family carries their lunch along with them or
prefers eating outside.

To tackle this issue, Dabbawalas came up with a con-
cept called ‘Centralized Kitchen’ where in their own
wives cook food at a centralized location to deliver to
the customers. Here, the weekly menu comprises of
Maharashtra and Gujrathi meals, with vegetarian and
non-vegetarian options priced at Rs. 95 and Rs. 100 a
day respectively.
Way forward
Dabbawalas have proven their capabilities and skills by
collaborating with India’s largest e-commerce site Flip-
kart. Some Dabbawalas work with Flipkart to deliver
their parcels. They also deliver samples and fliers for
companies, including PepsiCo.
The Dabbawala community has to embrace technolo-
gy to keep intact the customer base and to add more
customers. To tackle changing food habits amongst the
customers, they need to explore the untapped areas of
variety food options. They can use their credibility to tie
up with various food chains (for example, Box 8) which
focus on healthy eating with variety of dishes.
To market their entry into the new area, they can use
their already existing reach to a large number of corpo-
rate offices in Mumbai. They can distribute pamphlets/
stickers in the corporate offices to reach the target cus-
tomers. Nevertheless, with an ability to embrace change
and to adapt to changing circumstances accompanied

28 | Sept 2017
by strong work ethics, this 127 year old system can nev-
er perish.
ANSWERS TO CROSSWORD

Blockchain:
A Walloping
Technology

30 | Sept 2017
Introduction:
Suppose, you are giving your friend some cash. Is there
any third party involved? Do you have to pay transac-
tion fees? The answer is NO. But when you transfer the
amount to a friend’s account, the bank charges transac-
tion fees. You must trust the banks; moreover, there is a
high risk of thefts.
But what if there is a system which eliminates bank’s
role in the transaction? Such a system was created by
an anonymous person named, ‘Satoshi Nakamoto’. He
created world’s first digital cryptocurrency ‘Bitcoin’ in
2009. Blockchain technology served as a platform for
bitcoin to overcome all the issues of traditional banking.
What is Blockchain?
Blockchain is a decentralized ledger that maintains a
continuously growing list of ordered records called
‘blocks’. This means, each person (node) on the network
has the ledger copy and there is no master copy in the
network. This ensures that no one can manipulate the
information as everyone else will immediately flag it as
corrupt.
How Blockchain works?
Whenever a transaction takes place, it is recorded by all
the nodes in the network and it is then considered to
be complete. But what if the ledger is tampered? How
does blockchain respond to such situations? This is the
miner’s job to keep the information in ledger up to date.
When a transaction occurs in the network, miners
process the information and with a series of encoding
operations, the information in the block is turned into
something else, which is far different and shorter ran-
dom sequence of letters and numbers known as a
‘Hash’. This process is called ‘Hash Encryption’. This
hash generated by a block is again used while sealing
the subsequent blocks
Hashes have some unique features. They are easy to
generate but impossible to comprehend. We can gener-
ate a hash from a block but we cannot just know what
the data was by just looking at the hash. Even a slight
change in the block changes the hash completely.
Though these encryptions are difficult to understand,
the hash for each block is closely related to other block’s
hashes. After each transaction, the system performs self
check. In this process, the hash generated for latest block
in system is used for validating the subsequent blocks.
Therefore, if someone tries to tamper the block or tries
to hack the system, the hash key will change and the
block will be flagged as fake. Therefore invalidating all
the subsequent blocks and throwing out the wrong/ ma-
nipulated information.
Blockchain technology is gaining popularity since the
inception of Bitcoin. According to Accenture research
infrastructure spending for 8 out of world’s 10 biggest
banks can be reduced by 30% which is equivalent to
saving US$8-12 billion every year. The blockchain mar-
ket is expected to grow to US$20 billion by 2024 from
US$315.9mn in 2015 with a CAGR of 58.9%
Concept of The Month
Venkatesh Joshi
Roshan Umekar

Letuslookatsomeexamplesofblockchainaround
us:
1) Mahindra and Mahindra- Mahindra’s have
implemented blockchain in its supply chain operations
which at times were difficult to manage due nationwide
presence of Mahindra. Mahindra implemented Hy-
perledger technology of Linux foundation provided by
IBM. This new blockchain uses Smart Contract prop-
erty to execute payments and orders instantly. More-
over the raw material requirements are now tracked
real time, thus helping organization to manage inven-
tories efficiently with substantial transparency in the
whole process. The blockchain now takes care of dis-
counting process, order placement, invoice generation,
payments. Mahindra finance has tested Data Masking
property of Blockchain to hide some data and reveal the
desired data. This helps Mahindra to share data with
other Original Equipment Manufacturers easily while
securing confidential data.
2) Bajaj Electricals is another Indian firm work-
ing on blockchain to regulate their payments and deliv-
eries so as to make it comfortable for their vendors. The
blockchain has replaced cumbersome payment approv-
al and distribution process with ‘Smart contracts’. Hy-
perledger powered blockchain has made it possible to
make payments in seconds with the transaction being
shared with the bank.
But there’s a catch to this trade. The private blockchain
has only 4 ledger nodes; servicing only a handful of
vendors. Bajaj is thus concerned with the whole motive
of shifting their vendors on blockchain which will elim-
inate a lot of their inefficiencies.
The development of blockchain is thus a hot working
space touted to become the next big thing. The adapta-
tion of this technology has made it possible for a lot of
start-ups to expand rapidly. Imagine starting your car-
rier at one such place and who might know you would
be the CEO guiding the generation for next big thing!

32 | Sept 2017
Quick Quiz
1)The Great Crash on October 29, 1929, became
known as what?
Black Tuesday
Black Monday
Black Thursday
Black Friday

2)The start of this franchise in 1961 started a cultural
revolution for quick, mass produced food. Can you
name the restaurant or the franchiser?

3)Though it was not the first creditor, what bank for-
ever changed the way credit was issued with its credit
card plan in 1958?
Chase
Wachovia
Bank of America
Citibank

4)Id the stamp of which group commemorated on the
completion of the 100 year.

5)Id which country, local company came up with this
drink commemorating country liberation ?

6) The corporate HQ of which company is known as
the “One Earth” ?

7)There is a little bit of _________ in everybody life.
Punchline of which company. Fill in the blank

8)Which brand identity was developed around the idea
of “adding vitality to life.”

9)Which famous brand right are held by Dr Pepper
Snapple Group in US and by Pepsi in rest of the world?

10)Which Japanese brand has partnered with Pogo
for an association with the cartoon character, Chhota
Bheem, for its campaign.
1)BlackTuesday
2)McDonald’s
3)BankofAmerica
4)Godrej
5)SouthKorea
6)SuzlonEnergy
7)SAIL
8)Unilever
9)7UP
10)Honda

Beacon september Issue 2017

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