7 - Proof Of Concept

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DQI Bureau
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alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/a8a911d193b9fc23d362255a9ac10283387bf3165b8b736efd0c82ba82193fd6.jpg (11377 bytes)" border="0" hspace="2" vspace="2" align="right"> color="#FFFFFF">MD: RAMESH D GROVER
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At Rs 442 crore and 77 percent growth, Godrej  Pacific
Technology Ltd (GPTL) has proved that it is  the mightiest force in IT distribution.
With almost all commodity products ranging from PCs, peripherals, software, and components
from all the leading vendors forming its product portfolio, GPTL has been following the
best global practices in the distribution business. The company has probably the lowest
cost structure in IT distribution in the country.

Everything the company did was right. The year before
last was the ‘year of adaptation’, as CEO Shailendra Gupta preferred to call it.
And adapt it did. Its investments in technology and the reengineering of its distribution
process paid off. The company’s growth has come through increase in marketshare on
its existing businesses and addition of new product lines. The company has acquired
leading marketshares–it is either # 1 or # 2 in all its product lines.

alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/310fe303944a64952a00d6f0b9a621bdd1b9526b36ca88aa1c674284e9bae945.jpg (10678 bytes)" border="0" hspace="2" vspace="2" align="right"> SIZE="2">The company started off as a printer distribution set-up. When the intent and the
model for distribution business was clear, it tied up with Tech Pacific, an Australian
distribution company, which brought in the discipline required to make it big in the
distribution business. In just around three years, GPTL has added on significant product
lines and has demonstrated growth in almost all of them. PC peripherals, including
printers, now account for under 50 per cent of the total business. PC servers, desktops,
and notebooks from HP, IBM, Compaq, and Digital worth Rs 60.4 crore were sold last
year–a 174 percent increase in its channel sales of PCs compared to last year.

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color="#ff0000">*AGENCY OPERATIONS: HP, IBM, Digital, Compaq, Epson,
Panasonic, Brother, Samsung, Microsoft *START-UP
YEAR:
1986 *EMPLOYEES: 300 color="#ff0000">* ADDRESS: Gate No. 1A, Godrej Soaps Complex, Pirojshanagar,
Eastern Express Highway, Vikhroli (E), Mumbai 400079 *

TEL: 5182431/41 *FAX: 5170415  color="#ff0000">* WEB SITE: www.godrejpacific.com

S T R A T E G Y

  • To increase distribution efficiency by adopting best practices in
    distribution, managing channels through channel-friendly policies, and foresight in
    selecting products that will quickly ramp up.

T A C T I C S

  • Using smart information systems to identify market movements first and
    take preemptive/corrective action.
  • Managing inventories and costs using this

    information.
  • Continually looking at gaps in product portfolio and filling them up.
  • O B J E C T I V E S

    • Further streamline channel interaction to reduce the cost of
      distribution.
    • Identify opportunities for value addition.
    • Expand into the area of storage products and

      components.
    • Maintain existing growth rate.
    • P E R F O R M A N C E H I G H L I G H T S

      • Grew at 77 percent to touch Rs 442 crore.
      • PCs grew by 174 percent.
      • Peripherals grew by 94 percent.
      • Networking grew by 146 percent.
      • CPUs and multimedia kits grew by 92 percent.
      • Packaged software grew by 50 per cent.
      • PRODUCTS AND SERVICES:

        Systems, Peripherals,
        Networking, Packaged Software, Maintenance 

        Similarly, software licenses from Microsoft were
        worth Rs 32.07 crore and CPUs and multimedia kits brought in Rs 64.5 crore. Networking
        products worth nearly Rs 18 crore were sold through its channels. All these were
        comparatively new product lines that were added in the past two years. It is believed in
        the industry that the ultimate test of any product for its commodity value and market
        acceptability is to put it through GPTL’s channel.

        To its vendors, the company brings tremendous value.
        Realizing this, most key IT MNCs operating in India have chosen GPTL to distribute their
        products. The company provides them access to extensive channels, geographical
        penetration, and addressability to various customer segments. The company is appreciated
        by the vendors for its base of high-caliber manpower with comprehensive understanding of
        the distribution dynamics. The company’s strong financial capability also makes it an
        ideal partner for potential MNC vendors.

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        GPTL has been able to focus on five distinct channels
        and increase the capacity and output of each. These are systems integrators, value-added
        resellers, box movers, software dealers and resellers, and OEMs. The distribution
        operation is supported by state-of-the-art information systems comprising up-to-the-minute
        online status of product movement from any part of the country. This is enabled by using a
        VSAT network to connect all its warehouses and an integrated distribution management
        solution.

        A highly channel-oriented company, GPTL has worked hard
        to ensure pro-channel policies in all areas of decision-making. As a first step toward
        enabling a shift in mindset in order to apply customer care benchmarks to the channels as
        well, the company has started calling its dealers–internally as well as
        externally–as "customers."

        There has been high focus on key deliverables to
        channels. High availability of products, almost always ex-stock, fast delivery, and prompt
        supply of spares throughout the country are major benefits that GPTL’s dealers enjoy,
        besides favorable credit policies, hassle-free transactions, efficient information
        support, and reliable warranty support.

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        As IT products and services become more and more
        commoditized and volumes ramp up, it will be interesting to see how GPTL remodels its
        distribution strategy. Predictably, one way would be to use substantially the channels
        that its other white goods JV, Godrej-GE, has created, and create cost and logistics
        synergies with the alternative channel. In which case it will have to strive consciously
        for congruence between its current practices, which are more suited for a
        channel-to-business-user paradigm. In case it decides to go its own way and expand upon
        its current strengths, the main challenge would be to manage a very large and diversified
        distribution set-up, the likes of which the Indian IT has seldom seen.

        alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/0c1b8f617b1c411b8d16d88277349df8009c4e8172145e75b4f5472d0e12929a.jpg (22931 bytes)" border="0" hspace="2" vspace="2" align="left"> size="2">By focusing on the channel, GPTL has proved one major point to the Indian IT
        businesses–that it is possible to add value without actually ‘making’
        something. To that end, GPTL’s early advantage will enable it to stay in the lead as
        far as the distribution business goes.

        In the coming year, GPTL will emphasize on further
        streamlining channel interaction, reducing the cost of distribution, and identifying
        opportunities for value addition. The company is also seeking portfolio expansion to fill
        gaps, particularly in the area of storage products and components.Â