SPJIMR Team 702

TEAM 702
(Utham.K.S | Anubhav Agarwal | Tarun Gupta)
Indian Railways
Lessons in Marketing Excellence Season 3
Grand Finale
SPJIMR
1
SPJIMR Team 702
1. IR should focus on Premium Customers
2. Run Exclusive AC 3 Tier Long Distance and Over night trains for them
3. Target to have a fleet of 360 such world class service trains by 2020
How can IR generate required money & build a premium service delivery capability?
INR 26000 Crore addition to the revenue by 2020 Passengers
Freight
1. IR should focus on capturing Non Bulk Goods market
2. Build Capacities DFC ( 5 corridors) + MMLP
3. Facilitate 3PL on IRs assets by boosting Service PPPs
What are the current issues and what should be the way forward ?
INR 11000 Crore addition to the revenue by 2020
Sundry Earnings
1. IR should focus on Commercial Publicity, Land & Fiber Optics
2. Manage Advertisement inventory online + Simplify bid process for Land
development + Go after bulk Bandwidth customers (Government)
How to accelerate DFC What sections to be prioritized How to host Service PPP?
INR 91000 Crore addition to the revenue by 2020
Freight
Key
Recommendations
Key Questions Answered
in Presentation
Projected Impact
R
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Campaign Parivartan to instill the

concept of changing organization for
better in Passengersmind
IT Strategy to instill transparency in the
Railway Processes
Aimed at winning Freight Customers
confidence and loyalty
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SPJIMR Team 702

How is the presentation organized?

Section 1 Revenue Opportunities
Passengers Sundry Earnings
Freight
1. Analysis
2. Insights
3. Recommendations
4. Implementation
5. Impact
1. Analysis
2. Insights
3. Recommendations
4. Implementation
5. Impact
1. Analysis
2. Evaluation of options
3. Recommendations
4. Impact
1.a
1.b
1.c
Section 2 Supporting Changes
Brand Image
1. Insights
2. Campaign for each
Segment
3. Impact
Organizational Restructuring
1. Problem Analysis
2. Need for Change
3. Recommendations
Section 3 Financials
2.a
2.b
3
SPJIMR Team 702
Primary Research
4
SPJIMR Team 702
Independent
View
Independent
View

Ms. Suma Kamath
DurgambaLuxury
Buses, Mangalore
Mr. Rame Gowda
Airavat division, KSRTC
Competitors
Mr. David Gomes
Customer Services, Indigo
Mr. Nitish Salian
VP, BIT Car rentals
IRCTC Customer
care center
Mr. C. Sharma,
Rail Coach
Factory
Mr. Subramanya
Naidu,
Station, Mysore
Online
booking
Food
Mr. Mangesh
Naik
Ticket booking
Agent
4 FGDs
38 Personal Interviews
130 Online Surveys
Premium Customers
Discount
Customers
Middle Class
Customers
Customers from
all segments
Supply side
Prof. Raghuram
Consultant to
Railways, Railways
Chair at IIMA
Dr.B.V.L
Narayana
Senior professor
Railway Staff
College
Spoke to all stakeholders in the ecosystem
5
SPJIMR Team 702

Prof. Raghuram
Consultant to
Railways, Railways
Chair at IIMA
Spoke to all stakeholders in the ecosystem
Mr.XXX
#
,
Member ,
Railway Board
Dr.B.V.L Narayana
Senior professor in Transportation
Management
Railway Staff College
V.K Tripathi,
Additional Divisional
Railway
Manager, Mumbai
Indian
Railway
Independent
View
Ashutosh Mishra,
Manager Operations
Innovative B2B
Logistics Solutions Ltd
Mr. YYYY
#
Senior Manager,
Mahindra Logistics
VikramPrasad,
Practice Leader ( Supply
Chain Services)
ITW India Ltd
Logistics
Service
Providers
Supply
Chain
Experts
Prof. Ajit Prasad
Strategy & Operations
Board member, Power
Finance Corporation
Prof. Renuka Kamath
Distribution & Sales
SPJIMR
Abhishek Roy
Senior Consultant,
Meibach Supply chain
Consultants
End
Customers
Rajesh Tungala,
Outbound Logistics
Chandan Aggarwal
Sr. CMI Manager
Unilever
VasimAhamad,
Head, Domestic
Logistics,
Sunil Bhradwaj,
Head, Divisional
Planning,
Jayadev Behera,
Procurement division,
Sayan Majumdar,
Sourcing division,
Mr. K.N.
singh, Divisional
Operations Manager-
Western Railways
17experts
across the value
chain
# Anonymous under request 6
SPJIMR Team 702
7

Indian Railways should become a major THIRD
PARTY LOGISTICS SERVICE PROVIDER with end to
end logistics services
Indian Railways should be a WORLD CLASS
PREMIUM PASSENGER LOGISTICS SOLUTION
provider which includes transportation and
hospitality products
SPJIMR Team 702
Passenger Section
8
SPJIMR Team 702

68%
32%
0%
1951
Railways Roadways Airlines
12%
87%
1%
2011
Railways Roadways Airlines
STEEP FALL
Problem is severe in case of
passenger transportation market
compared to Freight
Source Indian Railway Yearbook
Issue Diagnosis
9
SPJIMR Team 702
2012
Freight
Passenger
Sundry
IR Total
Expense Revenue
Figures are to scale
Freight Cross Subsidizes Passenger
2020
Freight Passenger
Sundry
IR Total
Figures are to scale India 1 Passenger segment Subsidizes India 3
India 3
India 1
10
2020
SPJIMR Team 702

1
Passenger Fare break up over different classes
(AC 1,2,3; Sleeper, Second, General)
Source Indian Railway Yearbook & Team 702 Analysis
Supply side trends
11
SPJIMR Team 702

1
Passenger Fare break up over different classes
(AC 1,2,3; Sleeper, Second, General)
Non Sub-Urban Second Classs share of
revenue in Railways total is shrinking
YoY
Customer paying 12 paise per KM
Costing 38 paise per KM for IR to serve
Supply side trends
Source Indian Railway Yearbook & Team 702 Analysis
12
SPJIMR Team 702

1
Passenger Fare break up over different classes
(AC 1,2,3; Sleeper, Second, General)
Non Sub-Urban AC Tier 3 s share of
revenue in Railways total is the Highest
Growing YoY
Customer paying 122 paise per KM
Costing 45 paise per KM for IR to serve
Supply side trends
Source Indian Railway Yearbook & Team 702 Analysis
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SPJIMR Team 702

2
Supply side trends
Introduction of VOLVO luxury buses has
changed the bus industry for better We are
seeing an YoY growth of 80%in the demand
for premium seats - Mr. Gaurav
Gupta, Managing Director, Karnataka
State Road Transport Corporation
1 2 3
6
11
20
0
5
10
15
20
25
2006 2007 2008 2009 2010 2011
Indigo's Market Share (%)
Market Share (%)
Expon. (Market
Share (%))
People who fly once a month now fly thrice a
month because of great fares. People who never
flew want to fly. That's our market and that I
think it has great opportunities. - Mr. Rahul
Bhatia, Managing Director, Indigo Airlines
20
40
56
68
100
150
240
400
0
50
100
150
200
250
300
350
400
450
2004 2005 2006 2007 2008 2009 2010 2011
Volvo Buses in KSRTC Fleet
Expon. (Volvo Buses in KSRTC Fleet)
One common thing in their outlook for future
We will continue to convert Rail Users to use our services more frequently
Low Cost Carriers
Source Company Reports
Source Company Reports
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SPJIMR Team 702

Supply side trends
Premiumisation
Urbanization
Synthesis of Supply side trends
15
SPJIMR Team 702

Competitive benchmarking
Before Journey During Journey After Journey
Easier connectivity to
place of boarding
Hygiene of boarding
place
Availability of
entertainment means
Ease of booking
Luggage transfer
On Time performance
Seat Condition & Seat
Spacing
Luggage storage
Journey time
Other services like
food, connectivity
Safety
Toilet availability &
Hygiene
Easier connectivity
from place of
boarding
Hygiene, especially in
Toilets
On Time performance
Luggage transfer
Medium Low Medium
High Medium High
IR has the capability to be able to impact all points of the value chain unlike its competitors
Current Rank
Potential Rank
Medium Low Medium
Medium Medium Medium
Best for Last mile connectivity, not for Long Distance
Current Rank
Potential Rank
Medium High Medium
High High High
Best Journey Experience, But very pricey
Potential Rank
Current Rank
Satisfaction
Drivers
Low
Med
High
Price
3
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SPJIMR Team 702

Competitive Advantage
3
17
Railway Coach
Factory
Railway Wheel
Factory
IRCON
Project
Management
Railtel
Optic Fiber
Indian Railway
Finance
Corporation
Railway Staff
College
Rail Land
Development
Authority
Rail Tourism
Indian Railway
Catering And
Tourism
Corporation
Limited
Strong Presence across the value chain
Training/Knowledge
center
Passenger Support
Infrastructure/Resource
mobilization
SPJIMR Team 702

Indian Railways is the only player in transportation
business with the assets & capability to provide
complete passenger transportation solution
Owns Land at the center of cities
Capability to provide facilities across value chain from Food to stay
facilities
Ability to aggregate services
Synthesis of Competitive Benchmarking
*We will deal with the negatives at
the later stage
Competitive benchmarking
3
18
SPJIMR Team 702
Urban (30% of India) Rural (70% of India)

4
Demand side Segmentation
5.1%
6.5%
22.3%
42.3%
25.5%
25.9%
28.9%
21.7%
21.4%
4.7%
Upper
Upper Middle
Middle
Lower
Middle
Lower
Upper
Upper Middle
Middle
Lower
Middle
Lower
India 1
India 2
India 3
Maximum Benefit Seekers
Maximum Brand owners
Maximum Convenience Seekers
Cash constrained benefit seekers
Have Cycle + Radio + Fan
Hand to Mouth Existence
Income
distribution
PREMIUM
POPULAR
DISCOUNT
Source NCAER
Source NCAER
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SPJIMR Team 702

4
Demand side Segmentation
600
330
240
3200
1100
800
1532
729
569
India 1 India 2 India 3
Travel Service Consumption Pattern across segments
Rail Spend
Alternate Means
Last Mile Spend
India 1 spends the least in
railways across segments for
every INR 100 of their travel bill
Source Primary Research & Team 702 Analysis
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SPJIMR Team 702

India 1 is where the money is
We are the least preferred choice of transport service for
India 1*
If we are successful in increasing the railways spending
share of India 1 to the level of India 2 and India 3 It is an
incremental market opportunity of INR 28000 Crore
by 2020
#
Synthesis of Demand segmentation
*Primary Research outcome
** McKinsey Projections
#
India 1 currently spends 10.5% of it travel expenditure on railways
India 2/India 3 spends 15% of their travel expenditure on railways
India 1s travel expenditure is going to grow from INR 5332 in 2011 to INR 16800 at the rate of 7% CAGR**
So India 1 which will be of a size of 350 million population by 2020 ** could be spending anywhere around INR 1400 on
railways at 15%
350 million x INR (1400 600) = INR 28000 Crore
4
Demand side Segmentation
21
SPJIMR Team 702

Incremental Revenue
opportunity of INR 28000
Crore in 2020 by focusing on
India 1
Synthesis of Demand segmentation
4
Demand side Segmentation
22
SPJIMR Team 702

5
Demand side Needs
What does India 1 want?
Our Approach to Understand the needs
Studied successful SERVICE brands targeting India 1 across industries
Step 1
Hotel Saravana
Bhavan
Focus Group discussion + Online Survey
Step 2
SNCF French
National Railways
Promptness in
Service delivery
Genuine Customer
Orientation
Top 2
Requirements
1 2
Ability of the organization to consistently over-deliver on its expectations
23
SPJIMR Team 702

5
Demand side Needs
24
0 2 4 6 8 10 12
Information about train times and platforms
Overall station environment
Connnections with other forms of transport
Ticket buying facilities
Facilities for car parking
Food and beverage services at the station
The comfort of the seating
Frequency of trains on the route
Space for luggage
Toilet facilities on the train
Train speed
How requests for information were handles at the station
Personal security whilst using the station
Cleanliness of station
Availability of staff at the station
How the train company deals with any delays to the
Punctuality and reliability
Attitude and helpfulness of staff at the station
People
sensitive
attributes
Infrastructure
sensitive
attributes
Source Primary Research Online Survey Covering India 1 Customers
Question Rate the service attributes based on the importance for a satisfied travel experience
Travel related Service Attributes and their relative importance for India 1
SPJIMR Team 702

5
Demand side Needs
Promptness in
Service delivery
Genuine Customer
Orientation
Everyone from Railway
Minister to Platform
Coolie in the
organization is
customer focused
Every service touch
point is upgraded from
current For Masses to
For Premium state
Consistent service at
every delivery point
On Time service
delivery
Prompt
Communication with
the customer
Zero Manipulation of
any sort
Ability to act on
Customer feedback
IR needs Organizational
Restructuring to deliver
on these metrics.
The structure should be
along the customer
segments IR serves.
What does it take to deliver on the required service levels?
25
SPJIMR Team 702

5
Demand side Needs
26
Increase IRs Wallet share of premium India by adding premium facilities
on Railway premises
When Premium India travels from point A to point B, travel fare is just a
fraction of its total spend food, entertainment and stay forms the next biggest
segments of his complete travel expenditure
- Synthesis from personal interviews of India 1
Insight
Opportunities of Up-selling auxiliary services
Food
Entertai
nment
Stay
Train fare
Core offering
SPJIMR Team 702
LD
INTER
CITY

PLD
OVER NIGHT
SUBURBAN
NON
URBAN -
GENERAL
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O
f

C
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L
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H
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h
Very Low
Very High
Price Sensitivity
Time Sensitivity
Legend
PLD Premium Long distance
LD Long Distance
Least Attractive
Moderately Attractive
Highly Attractive
Sub Segmentation of India 1 customers based on their Travel Pattern
Segment Description
Long distance >1000 kms, comfort driven
Inter city 300-700 kms, comfort and time driven
Long distance premium >1000 kms highly facilities and comfort
driven, style statement
Overnight intercity 300-700 kms, time specific, comfort driven
Non suburban general 200- 700 kms, cost sensitive,
Suburban <200kmstime sensitive
27
SPJIMR Team 702
LD
INTER
CITY

PLD
OVER NIGHT
SUBURBAN
NON
URBAN -
GENERAL
R
e
q
u
i
r
e
m
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n
t
s

O
f

C
o
m
f
o
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t
R
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q
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m
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O
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A
d
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o
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f
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V
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L
o
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V
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r
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H
i
g
h
Very Low
Very High
Price Sensitivity
Time Sensitivity
Legend
PLD Premium Long distance
LD Long Distance
Least Attractive
Moderately Attractive
Highly Attractive
Premium Long distance and Overnight travel Our Segments of Choice
Sub Segmentation of India 1 customers based on their Travel Pattern
28
Adopted from Mr. BVL Narayanas work on Passenger Logistics
SPJIMR Team 702

AC Tier 3
AC 1st Class
Sleeper Class
Second Class
Luxury Buses
Low Cost
Airlines
14 Paise / KM
26 Paise / KM
111 Paise / KM
231 Paise / KM
200 Paise / KM
240 Paise / KM
Given that, It costs IR 40 paise per KM
Second Class and Sleeper Class are
operationally not profitable
AC 1
st
Class does not have enough
reasons to justify its pricing
comparable to Low Cost Airlines
AC Tier 3 is the best option in
terms of
Profitability
Competitive Advantage
AC Tier 3 is Our Choice for the Seat Class + Discontinue AC Class 1
Team 702 Analysis, Based on Primary research
29
SPJIMR Team 702

Segment the passenger market into Mass and Premium
Premiumsegment should subsidize Mass segment
Run Exclusive AC Tier 3 coaches on Long distance and
Overnight routes targeting premium class
Opportunity to increase the wallet share of premium
customers by adding high quality services in
Food, entertainment and stay in Railway premises
Mid Way synthesis of recommendations
30
SPJIMR Team 702

31
Compelling business proposition if Rajdhani journey time can be crashed to less than 12
hours on all the routes - A saving of 80% travel cost with no added inconvenience
Delhi Mumbai Travel Example
Total travel fare of air travel
INR 6400
+
Cost of stay for a night ( for a business traveler)
INR 1200
A business visit costs INR 8400
5%
89%
0%
5%
1
Rajdhani - Total Travel Time - 19 hours
Travel from Railway Station
Baggage Wait & Check out
Journey time
Travel to Railway station
14%
29%
36%
7%
14%
1
Airlines - Total Travel Time - 7 hours
Travel from Airport
Baggage Wait & Check
out
Journey time
Baggage Check In +
Waiting
Travel to Airport
Total travel fare of Train travel in AC Tier 3
INR 1800
He will be saving on Overnight accommodation
costs if the journey time is reduced to an
overnight travel
SPJIMR Team 702

How can IR compete effectively with Airlines for India 1 Customers?
Make Journey Time
Comparable
Give them true premium
class service
Top 2 drivers
Run Passenger trains at 180-
200kms speed
Busy routes like Mum Del, Blore
Del should be overnight
Shift from Multi segment
service trains to Specialized
trains
Full trains must be AC Tier 3/ Tier 2
Upgrade in-train facilities
Bath facilities and up gradation to
improve passengers sleep quality
Change Organizational
Structure to make it responsive
to customer needs
Align the structure along the
customer segments
Above assessment is based on our in depth interview with
1. Senior Official from Railway Board
2. Senior Professor from Railway Staff College
3. Prof. Raghuram, Consultant to Railways, IIMA
Practicality of
Solution
Low -
Medium -
High -
32
SPJIMR Team 702

IRs capability mapping
IRs Core Competency*
Operational Expertise
Capacity building expertise Rail lines
and associated infra
Owns range of assets which could be
leveraged to impact every point in
passenger logistic chain
* Validated with Member of Board of Railways
1
2
3
Our View
IR should continue to
focus on tasks that
leverage on its core
competencies
IRs Core Weakness*
Ability to provide premium customer
service
* Validated with Experts from IRCTC
Our View
IR should look at acquiring
this competency
Build Service
Capability with in
the Organization
Lease out Premium
Service trains
Buy out an Hospitality
Company with Premium
service offering capability
Strategic Choices with IR
33
* List generated with the help of a strategy consultant to Railways
SPJIMR Team 702

Evaluating Strategies Leasing out is our choice
Build Service
Capability with in
the Organization
Buy out an Hospitality
Company with Premium
service offering capability
Cost
Effectiveness
Private
Participation
Lease out
Premium
Service trains
Time to
implement
Control over
revenue
Good
Good
Good
Good
Satisfactory
Satisfactory
Poor
Poor
Poor
Excellent
Poor
Poor
Assessment based on interaction with various stakeholders
Our Choice
34
SPJIMR Team 702

Selecting the train services to Lease out
35
Strong
National
Brand
Weak
National
Brand
Low
Profitability
High
Profitability
Rajdhani
Duronto
Shatabdi
Jan
Shatabdi
Garib Rath
Superfast /Mail
Express
Passenger/Fast
Passenger
Rajya Rani
Express
SPJIMR Team 702
Bottlenecks

Re-iterating on Why Leasing will help us solve both the problems
Segregated lines for freight and
passenger along High density lines
to achieve better journey time
Customer oriented
organization delivering
high quality service
Top 2 CSFs
FINANCE PEOPLE
Lease
Premium
Long Distance
services to
Private
players
Prospective Partners
TATA, Oberoi, RIL, Birla
Service PPP
1. Attractive option
2. Shorter Gestation Period
3. Better returns
Make this the training
ground for IR employees
to take over Premium
services once Lease
period is over
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SPJIMR Team 702

Lease out the services of Rajdhani, Shatabdi
and Duronto trains to private players for 10
years
Upgrade platform facilities in four Metros
Premium food courts, entertainment options
like gaming parlors and Semi Luxury
Hotels (MFC)
Our Proposal
37
SPJIMR Team 702

Rajdhani Duronto
Shatabdi
22
24
16
Premium Long
distance trains that
could be leased
Our Analysis yields
Minimum Bid amount to lease for 10 years per train service INR 426 Crore
Annual Revenue Potential per Train @ 130 paise per PKM
INR 68 Crore
Annual Fees to Railways for using its Network, Platform & Signaling
@50 paise per PKM INR 26 Crore
Lease Activity will generate a cash of INR 27000 Crore
Minimum Rate of return possible for Private Players
10% p.a
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SPJIMR Team 702

Invest INR 27000 Crore in accelerating DFC implementation
Crash the journey times to Under 12 hours on all important
routes
Start New Rajdhani + Duronto + Shatabdi services
Service quality should match up to the one by Private players
Build Capacity
Our Analysis yields
There will be a Market opportunity to run 304 more Premium Long Distance and Overnight
Intercity trains by 2020
This translates to an addition of 133 million originating passengers fromIndia 1 segment
This is about 1.6% of current Passenger base of Indian Railways
Revenue addition of INR 25000 Crore
39
Add Capacity
Accelerate DFC
2012
New Premium Class
trains run by IR
2016
Expected Time
of completion
of 2 DFCs
2018
2017
Revenue of INR
55436 Crore
from Passenger
segment
IR must be running
300 premium
service trains -
Private managing
the rest 60

Lease
Out
2020
Start Adding
New Trains in
Premium
Class
Add 50 New
Premium
service trains
Buy back
the Lease
from Private
players
3/29/2012 40
Up gradation in Platform services Premium
food, entertainment options & Stay
2013
SPJIMR Team 702
Closure,
By 2020,
IR will possess a strong fleet of 360 Mass-Luxury
trains
Upgraded premium hospitality services
Customer centric employee population
Expansion of these competencies to the mass
segment will IR closer to our Vision 2030 of it
being World class Passenger logistics solution
provider
41
SPJIMR Team 702
Freight Section
42
SPJIMR Team 702

1950-51
82 Mn Tonnes
11%
89%
Railways
Roadways 34%
65%
1%
Railways
Roadways Coastal Shipping
46%
53%
1%
Railways
61%
30%
2%
2% 5%
Coastal Shipping
Roadways
Railways
Coastal Shipping
Inland Water Transport
Pipelines
Roadways
1978-79
283 Mn Tonnes
1986-87
485 Mn Tonnes
2007-08
2,555 Mn
Tonnes
66%drop in market share since 1951
Source KPMG , Adding Wheels,2010
Issue Diagnosis
43
SPJIMR Team 702

1
Supply side trends
Inadequate investment in capacity has
been one of the major causes of loss in
market share to roadways -
CAG, Report 8, 2010-2011
Capacity Constraints have resulted in a potential share loss of over 40%
0%
10%
20%
30%
40%
50%
60%
10th Plan 11th Plan 12th Plan(E)
Planned Investment
Railways Road
%


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65%
35%
0%
10%
20%
30%
40%
50%
60%
70%
Bulk Non-Bulk
0-400
KM,
>700
KM,
400-
700
KM,
81% of Bulk goods
cheaper on Railways
0-400
KM,
>700
KM,
400-
700
KM,
60% of Non- Bulk
goods cheaper on
Railways
74%
30%
Potential Market
Share
Actual Market Share
Indian Freight
Source : McKinsey, Building India; KPMG , Adding Wheels
44
SPJIMR Team 702
1.CapacityCreation : Reactive Development

45
SPJIMR Team 702
2
Supply side trends
6.3
7.6
10.6
34.75
16.2
12.44
NTKM*/Wagon/Day(Billions) NTKM/Route Length(Millions)
Asset Efficiency
India China USA
*NTKM : Net Ton KM, a measure of freight turnover
112%
101%
102%
Asset Utilization
2005-06 2010-11 2010-112(P)
Inefficient assets have led to a delusion around capacity utilization
Indian railways needs to make sure it
invests in high quality assets while
increasing capacity -
Prof. BVL Narayana, Senior Professor
Transport Management, Railway
Staff College
Source : MoR, White Paper on IR; Crisil Research
46
SPJIMR Team 702
2..Asset Efficiency: Lack of up gradation

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SPJIMR Team 702
I am even ready to pay extra and use road
transport to avoid the hassle of dealing with
Railways .
- Mr. WaseemAhamad, Supply Chain &
Logistics (Head), Pidilite ( Industrial &
Consumer Adhesives)
Customer Confidence
Low-
Medium-
High -

Supply side trends
3
Indian Railways, as an organization needs to
learn a lot when it to comes to customer and
Partner Interfacing
- Prof G Raghuram, Indian Railways Chair
professor, Consultant to IR
Partner Confidence
Low-
Medium-
High -
Railways policies towards private container
train operators invoke mistrust
- Ashutosh Mishra, Manager Operations,
Innovative B2B Logistics Solutions, a private
CTO.
Customer and Business Interfacing reflects a major lacuna in IRs skills
48
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3.Customer and Business Interfacing:
Huge Lacuna

49
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Capacity
Creation
Reactive Development
Customer and
Business
Interfacing
Asset
Efficiency
Lack of Upgradation
Huge Lacuna
Current Scenario
Projected Market
Share in 2020
1%
25%
69%
5%
Air Rail Road Water
A further 5% drop in market share on the current trajectory

Source Crisil Research
50
SPJIMR Team 702

22%
37%
61%
47%
48%
30%
30%
14%
4%
1% 1%
5%
Rail
Roads
Water
Others
China US India
CO
2
per ton-km
15
28
64
10
2
3
1
12
11
3
3
45
`
High
Mode
Costs
Low
Speed
Mode
Mix
Handling
Distance Theft
Inv. Facilities Total
~$45 Billion losses due
to inefficiencies
Obvious Cost Hidden Cost
Indian logistics sector pays $13 billion more because of wrong mode
choice, apart from adding to the carbon footprint`
Demand side trends
1
Source McKinsey, Building India
51
Mode mix for freight and
carbon footprint
SPJIMR Team 702

836
1759
659
1881
1495 3640
Bulk
Non-
Bulk
2009 2020(P)
Total
CAGR
10%
8.4%
Demand side trends
2
7%
Billion Ton KM
395
185
100
Freight Rate/Tonne KM
Freight Rates - Comparison
India China US
Indian Freight Rates are among the
highest in the world
Non-bulk freight segment will grow
faster than the overall freight growth
Source McKinsey Research; MoR, White paper on IR;Crisil
Research
52
IRs Price Realization potential for
Non Bulk goods is higher
-MoR, White paper; MoR Vision 2020
Examples of Bulk goods : Iron, coal, fertilizers
Examples of non-bulk goods : Autos, FMCG, FMCD
SPJIMR Team 702
53
Demand side trends
3
Bulk
Projects
Containerized
Non-Bulk
H
a
n
d
l
i
n
g

S
e
n
s
i
t
i
v
i
t
y
V
e
r
y

L
o
w
V
e
r
y

H
i
g
h
Very Low Price Sensitivity
T
i
m
e

S
e
n
s
i
t
i
v
i
t
y
Least Suitable
Moderately Suitable
Highly Suitable for Rail
Very High
Parcels
Documents
Too sensitive for IR to handle
IR has high market share here.
Segment hrinking as part of
total pie
Ideal segment to grow market
share. Higher value than bulk
and higher segment growth
rate. Requires Value added
services
Consignment Size
Based on Prof BVL Narayanas working paper on innovation for IR
SPJIMR Team 702
54
Demand side trends
3
Bulk
Projects
Containerized
Non-Bulk
H
a
n
d
l
i
n
g

S
e
n
s
i
t
i
v
i
t
y
V
e
r
y

L
o
w
V
e
r
y

H
i
g
h
Very Low Price Sensitivity
T
i
m
e

S
e
n
s
i
t
i
v
i
t
y
Least Suitable
Moderately Suitable
Highly Suitable for Rail
Very High
Parcels
Documents
Too sensitive for IR to handle
IR has high market share here.
Segment hrinking as part of
total pie
Ideal segment to grow market
share. Higher value than bulk
and higher segment growth
rate. Requires Value added
services
Non-Bulk is the most suitable high
growth and high value segment
for railways to grow. It requires
value added services and
aggregation though
Consignment Size
SPJIMR Team 702

Indian Railways freight rates are among the highest in the
world. IR cant increase revenue by increasing rates
Railways has potentially higher advantage when compared
to other modes on cost and carbon footprint
Bulk goods the mainstay of Railways freight will grow at a
slower pace than non-bulk goods
IR needs to gain market share in high value segments
IR needs to gain market share in non-bulk
segment to double its revenue
Synthesis of Demand Trends
*Primary Research outcome
** McKinsey Projections
3
Demand Trends
55
SPJIMR Team 702

What does IR need to do compete with Roads in Non-Bulk segment
Time Bound and
reliable transport
End to End Logistics
services
Service record to design
and handle multi-modal
complex supply chains
Faster turnaround and
better speeds
Storage, Cross docking
and Value added services
Supply chain expertise
and service oriented
customer focus
Dedicated freight
corridors ,upgraded
wagons and axle
capacity
Multi-modal logistics
parks with storage and
value added services
Organization
restructuring for
customer focus and
service orientation
Build Capacity
Build Capability
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-Proactive Development
- Focus on key elements
Action Plan
Strategic approach
1
*current plan of DFCCIL
-Reactive Development
- Widespread investment
57
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58

2
What are the capacity creation choices
Create Dedicated
freight corridors
Choice
Segment
Impact
Partnership
attractiveness
Create Multi-modal
logistics Parks*
High Speed & Bullet
train corridors
Gauge Conversion**
Axle load and
Wagon up gradation
Bulk and Non-bulk freight
segment, Passenger
Last mile
connectivity
Freight Non Bulk segment
Passenger Segment
Freight : Bulk Segment
Freight : Bulk Segment
Freight : Bulk Segment
Good
Satisfactory
Poor
Excellent
Poor
Satisfactory
*A Multi-modal logistics park provides connectivity to various modes , besides warehousing and other value added services
** Conversion from Meter gauge to Broad gauge
SPJIMR Team 702
59

2
What are the capacity creation choices
Create Dedicated
freight corridors
Choice
Segment
Impact
Partnership
attractiveness
Create Multi-modal
logistics Parks*
High Speed & Bullet
train corridors
Gauge Conversion**
Axle load and
Wagon up gradation
Bulk and Non-bulk freight
segment, Passenger
Last mile
connectivity
Freight Non Bulk segment
Passenger Segment
Freight : Bulk Segment
Freight : Bulk Segment
Freight : Bulk Segment
Good
Satisfactory
Poor
Excellent
Poor
Satisfactory
High Impact, High attractiveness
SPJIMR Team 702
60

2
What are the capacity creation choices
Create Dedicated
freight corridors
Choice
Segment
Impact
Partnership
attractiveness
Create Multi-modal
logistics Parks*
High Speed & Bullet
train corridors
Gauge Conversion**
Axle load and
Wagon up gradation
Bulk and Non-bulk freight
segment, Passenger
Last mile
connectivity
Freight Non Bulk segment
Passenger Segment
Freight : Bulk Segment
Freight : Bulk Segment
Freight : Bulk Segment
Good
Satisfactory
Poor
Excellent
Poor
Satisfactory
Low Impact, Low attractiveness
SPJIMR Team 702
1. Build 5 Dedicated Freight Corridors
instead of just 2*
Add Mumbai- Kolkata, Delhi-Chennai, Goa-
Chennai
2. Build 10 Multi-Modal Logistics parks
around the DFCs
Synthesis
*Primary Research outcome
** McKinsey Projections
3
61

SPJIMR Team 702
4
Delhi
Mumbai
Kolkata
Chennai
1
5
3
2
4
Goa
Potential Location for
a MMLP
Dedicated Freight
Corridor

62
Delhi-Chennai, Delhi
Mumbai , Delhi Kolkata
Mumbai Kolkata have the
maximum sections with over
120% capacity utilization
Which routes for DFC
Goa-Chennai corridor will
help in gaining market share
in autos and consumer
durables
Building 5 corridors would
help building capacity
proactively
SPJIMR Team 702
5

Dedicated Freight Corridor Key Bottlenecks
Finance
Agile Project
management
Problem Severity
Low-
Medium-
High -
Problem Severity
Low-
Medium-
High -
Tackled through creation of
SPV - DFFCIL
Railways cash surplus
reduced to ~75 lakh INR
Fall in revenues and
increase in expenses has
taken IRs operating ratio to
95%
Above assessment is based on our in depth interview with
1. Senior Official from Railway Board
2. Prof. BVL Narayana, Senior Professor from Railway Staff College
3. Prof. Raghuram, Consultant to Railways, Railways Chair
Professor
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6

Tackling Finance
Delhi- Mumbai
DFC
Corridor
Estimated
Earnings in 2020
Estimated
Project Costs
Source of
funding
21,721 Crores 40,795 Crores Government of Japan*
Delhi- Kolkata
Mumbai-Kolkata
Delhi- Chennai
Chennai-Goa
18,759 Crores
17,771 Crores
15,797 Crores
7,405 Crores
40,665 Crores
48,049 Crores
52,238 Crores
19,483 Crores
World Bank, PPP*
Not established
Not established
Not established
Project cost estimates based DFCCIL project estimates
Potential Earnings on Crisil and McKinsey estimates on Freight Traffic at current NTKM rate of IR
*DFCCIL Annual Report
64
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7

Tackling Finance- Options
65
Internal Accruals
Loans from International
Institutions/
Governments
Gross Budgetary Support
Private Partnership
Feasibility
Probability of
Swift Financing
Qualitative Comment
Low
Very High
High
Medium
Low
Low
Low
High
Recent rise in operating ratio
has dried internal reserves
Difficulty to swiftly arrange
capital through this route
IRs recent demands for
increase in GBS have not
been fruitful. Not a reliable
source
Most swift and feasible
method if effectively used
SPJIMR Team 702
8

Tackling Finance- Options
66
Internal Accruals
Loans from International
Institutions/
Governments
Gross Budgetary Support
Private Partnership
Feasibility
Probability of
Swift Financing
Qualitative Comment
Low
Very High
High
Medium
Low
Low
Low
High
Recent rise in operating ratio
has dried internal reserves
Difficulty to swiftly arrange
capital through this route
IRs recent demands for
increase in GBS have not
been fruitful. Not a reliable
source
Most swift and feasible
method if effectively used
Most feasible choice
SPJIMR Team 702

Bid out Chennai-Goa DFC on
a Build-Finance-Operate-
Transfer basis for a period
of 15 years
Our Proposal
67
SPJIMR Team 702

Gives highest return and freedom to the
private player of all partnership models
Railways doesnt need to worry on
financing of the project
Railways earns from maintenance and
haulage thus retaining core competence
Why Build-Finance-Operate-Transfer model
68
SPJIMR Team 702

Least loss of earnings when giving operations
to a private player and still attractive
Bidding this route has a potential to generate
enough capital to finance Mumbai-Kolkata
and Delhi Chennai
Highest return and lowest capital cost of the
three* routes
Why Goa-Chennai
69
*Mumbai-Kolkata, Delhi Chennai, Goa-Chennai
SPJIMR Team 702

Bid activity will generate a cash of INR 1,16,393 Crore
Our Analysis yields
INR 7405 Crore
Annual Revenue Potential @ 98.73 paise per NTKM
INR 5330 Crore
Annual Fees to Railways for using its haulage, Platform & Signaling
@71 paise per NTKM
Minimum Rate of return possible for Private Players 10% p.a
1. Use the cash to start and fast-track process of building Mumbai-Kolkata and
Delhi-Chennai corridors
2. Use the surplus from generated from leasing out Rajdhanis as contingency
resource/ railway equity in the project
Prospective buyers consortium of big private players like Mahindra
Logistics, Reliance logistics , Adani Logistics.
Cross industry Example Indus Towers ( Telecom) 70
SPJIMR Team 702

Fastrack to complete Delhi-Mumbai and Delhi Kolkata DFCs
Use revenue surpluses to support cost escalations in other 3
DFCs and build multi-modal parks
Complete all five DFCs with land acquisition and supervising
support to Chennai Goa DFC
Build Capacity
Our Analysis yields
In 2020, Indian Freight movement is projected be 3450 BTKM*
An estimate of 46% market share a result balance modal mix between roads and rails
Revenue addition of INR 94,196 Crore
* Crisil Research, McKinsey Research
71
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72

What is a multi-modal logistics park
A logistics facility that provides connects to
various modes of transport rail, air, and
sea
Provides a range of services from
warehousing , cold storage, packaging etc.
Has other commercial establishments like
banks , office space
SPJIMR Team 702
5

Multi-modal Logistics Parks Key Bottlenecks
Lack of Private Interest in Railways partnership policy on
MMLP introduce in 2009
Problem Severity
Low-
Medium-
High -
Scheme introduced in
2009, yet to take off
Scheme marred by land
acquisition problems
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Tackling lack of interest in MMLP scheme
Raising the Economic interest in
the partnership proposition
Addressing economic
concerns due project
delays because of land
acquisitions
Top 2 CSFs
Shift from
infrastructure
only
partnership to
Infrastructure
+
Service
partnership
Prospective Partners
TCI, ConCor
Infrastructure + Service PPP
Risk sharing on Business
development and Project
delay

1
Build Capacity
Build Capability
74
Make the policy document
more transparent and
increase trust by
increasing railway equity
Make this a training ground
from IR employees to take
over business development
and supply chain skills
IR should help the project in
land acquisition and other
admin delays.
Use Cash to
plan 2 other
DFCs
2012
2016
Expected Time
of completion
of 2 DFCs
Revenue of INR
1,56,685 Crore
from Freight
segment
IR must complete 4
DFCs on self and one
should be built by
private player

BID
Out
2020
Use revenue
surpluses to
support other
DFCs
Buy back
the DFC
from Private
players
Add Multimodal
Logistics Parks
in phased
manner
SPJIMR Team 702
76

Peripheral and Value added
services
Primary Services
Warehousing & Distribution
THIRD PARTY LOGISTICS SEGMENTS
C
o
m
p
l
e
x
i
t
y

a
n
d

R
e
t
u
r
n
s
Basic cargo Operations Generic Cargo Handling
High
Low
Management
Services SCM
Design, Analytics
IR is currently here
Through DFCs and logistics
parks
Through multi-modal
logistics parks
Through service partnership with
private players in logistics
SPJIMR Team 702
Sundry Section
77
SPJIMR Team 702
Assets available for
commercial publicity
-7965 stations
-2210 trains
-331.26 crore tickets, charts, forms used per
annum
-27288 other media spots
0 100 200 300 400 500
Commercial Publicity Revenues
Revenue
Potential
Revenue FY11
Big revenue opportunity for IR
-Railway as advertising platform is still
in innovation phase and its ROI is unclear
-These assets are less popular among
brand managers compared to
airlines/airports
-Brand advertising strategy and choice of
media is strongly influenced by media
agency involved
Source Primary Research
Brand Manager Speak
-Railway assets inventory has low
visibility on availability and rates
-Fragmented ownership of assets leads to
delays
-Recommends to clients other
alternatives advertising vehicles such as
airports/roads which are easier to
collaborate and operate
Advertising Agency Speak

Managers have low visibility of railways assets & their ROI potential and thus, choice
of railways as advertising media is easily downplayed by advertising agencies
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SPJIMR Team 702
1. Publish the assets inventory online to increase visibility
among brand managers and marketing agencies. Setup a centralized
portal listing all assets available for commercial publicity
Availability status of assets with approximate rates
Resources on ROI and other metrics to gauge impact
Case studies on past campaigns
2. Invest in making these assets popular among brand
managers and marketing agencies
Search Engine Marketing and Optimization
Participate in outdoor advertising seminars and conferences
Evangelize through blogs, forums and public groups for marketing and
advertisement
As per calculations, revenue from commercial publicity in 2020 will be INR 922 cr

SPJIMR Team 702
Commercial Publicity | Recommendations
Setup
centralized
portal listing
all assets
available for
commercial
publicity
Generate demand from brand
managers
Invest in
SEO and
SCM for the
portal
1. Will reduce power of
marketing agencies in the
network
2. Will boost the bidding
prices to rent the assets
Marketing Agencies Indian Railways
TDI
Peacock
India
Dove
Sunsilk
Airtel
Commercial
Publicity
Assets
Brand Managers
Outdoor advertising market is a network involving brand managers (customers) and asset owner on two ends and
marketing agencies in middle functioning as an intermediary cum advisor
80
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+
43,000 hectares of vacant land which is five-
times more than the combined land bank of
three top land-owning private companies
in IndiaSahara Group, Unitech and DLF
The revenue generated so far is very
insignificant as compared to
the administrative costs and efforts
undertaken by the authority
-
Mandate is lease out for 35 40
years, only for Commercial
purposes
Simplify the bid process and complicated documentation
Develop the capacities of creating assets in concurrence with private partner rather than taking
the money and calling the shots over the private partners
Multi Functional Complexes which include shopping, food stalls/ restaurants, Coffee Shops, Book
stalls, PCO Booths, ATMs, Medicines and Variety stores, Budget Hotels, parking spaces will be in line
with our strategy to focus on Premium Customers
Land is primarily located at prime
locations typically center of the cities
Way Forward
1
Relax the mandate to
involve residential
buildings
2
Short term leases with
the time horizon of 10
to 15 years is the way
forward
3
Create assets in
concurrence with the
private player
81
SPJIMR Team 702

Industry is seeing
continuous fall in
revenue
-
Its core network is laid
along the railway track and
has limited last mile access
Focus on Government department requirements
Remote Healthcare and Distance Education sectors
Way Forward
1
Increase Volumes to
absorb high fixed costs
2
Develop Value added
services to protect
margins
3
Adopt innovative
pricing schemes
Failure to provide
End to End solutions
which are in demand
Failure to match the
service agility of
private competition
Our Recommendation
Focus on BULK BandWidth Leasing
Target Government Projects as they give you high volumes
Develop complete network solutions for Healthcare and e-learning applications
82
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Brand Image
Correction
83
SPJIMR Team 702
31%
22%
18%
Dirty Late Crowded
37%
21%
15%
Sarkaari Bureaucratic Political
Say 1 word which
you would
associate with
the Indian
Railway?
Challenges
Huge negative word of mouth
marring the brand image
+ few service delivery failures
overshadow the majority
successful deliveries of
promised service
Size and organization
structure act as resistance to
change
Customers do not appreciate
the complexity of service and
its underlying operational
challenges
There are rats even in 2A coaches. I dont want to travel in
IR as it is unhygienic and dirty - Vice
President, MNC, Mumbai
Typical sarkaari organization hai, I wish I dont have
to deal with them. There are no processes -
Manager, Logistics company
Passenger Freight/ Logistics Customers
Say 1 word which
you would
associate with
the Indian
Railway?

84
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Brands Studied
Services Marketing Triangle
Railways (Management)
Customers
Employees
delivering the promise
Three stakeholders
Management, Employees &
Customers and Involvement of each
is crucial for service brand
enhancement; Interactive
marketing is most effective strategy
What should be Indian Railways Promise?
Genuine Customer
Orientation
Collect feedback and act on it
Proactive initiatives to solve
customer issues
Quality Service
Consistent at every touch point
Meet or beat Customer
expectations
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Freight/ Logistics
Customers
Transparency
Technology
Trust
Passenger
Hygiene
On-Time
Security
Staff behavior
In-train
Service
Tech Savvy
Platform
amenities
Staff -
Behavior
Security
Hygiene
On-Time
Transparency

What does high Service Quality translate to each of the segments?
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Evaluation
Criteria
Significance of
evaluation
criteria
TV
campaign
Print
Media
campaign
Social
Media
Campaign
Radio
campaign
On
ground
experient
ial
campaign
Budget required
Strict budget constraint
of INR 60 cr
5 2 1 3 2
Execution
challenges
How challenging the
implementation of
campaign is?
3 3 2 3 1
Involvement of
target
stakeholders*
Active involvement of
customers and
employees
0 0 3 0 4
Tracking the
progress
Tracking campaign
impact through tangible
metrics is crucial
1 1 3 1 3
Actionable
feedback
Can we capture
feedback from the
stakeholders to improve
future delivery?
0 0 3 1 3
4 Very High 3 High 2 Moderate 1 Low 0 Very Low
87
Enhance IR brand image through on ground activation and
social media campaign Parivartan under
the direction supervision of Indian Railway Minister
Low budget requirements
Active involvement of both customers
and employees
Easy to track and measure success
SPJIMR Team 702
Parivartan team visits the station
to initiate the campaign
Conducts 3 days intense HR and
process training for all employees
from sanitation staff to coolies to
Station Master
At the end of 3 day training, station becomes part of
Parivartan and to track customer satisfaction a PNR number
based feedback machine and display meter is installed
Track weekly scores of each station and
apprise Railway minister. Felicitate
stations which showed improvement in
customer satisfaction scores over time
Share ratings on social media. Share
practices followed by high rated
stations. Incentivize other stations to
follow and improve
Campaign
Parivartan
Estimation number of feedback from passengers 94.9 Million
Money spent on this campaign INR 9.21 crore per year
Number of stations included in campaign 104 per year
Key Numbers
1. Initiation
2. Employee Training
3. Customer Empowerment & Awareness
4. Track Progress & Rate
5. Share & Improve

88
SPJIMR Team 702
Indian Railway Parivartan Customer Satisfaction Score
Two Passenger Satisfaction Feedback machines will be
installed per station near major entrance/exit
PNR based feedback to prevent redundancy & misuse of service
Score will increment real time with every feedback
Scores will be displayed in two prime locations of
station to capture maximum customer eye balls
0
50
100
150
Week 21 Week 22 Week 23 Week 24
New Delhi Station - Unhappy
Customers ('000s)
Monthly report of stations will be shared with
senior management and railway minister
Station performance metric sharing on
Facebook and with Minister will incentivize
Station Staff to do better job. There will be no
monetary rewards but Psychic Rewards
89

SPJIMR Team 702
Parivartan
campaign
section and
publish station
ratings, progress
charts and
videos
Create Indian Railways page on
Railway Diaries
Daily updates
about railway to
create positive
word of mouth and
spread awareness
about successful
service deliveries
Testimonial
section for
users to upload
their railway
experience
Contests
section to
attract traffic
and trigger
conversations
and collect
feedback
Nation Pride
section for users
to share their
good memories
with railways

Expected Results
Number of facebook fans
By the end of year 1 4.75 Million
Awareness about Nation Pride
Complex yet successful operations
Successful services which misses user
attention
New initiatives undertaken
Expectations from citizens
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Create Transparency and
Trust through Technology
Railways (Management)
Industrial
Customers and
Investors
Employees
Technology
Collaborative policy making
Create processes and automate:
1. Distribution of rail capacity
2. Tender and auction activities
3. Allocation of rakes, good sheds
and other resources
1. Invite industry players for
regular meetings and input
sessions
2. Involve different stakeholders
before major amendments in
policies
Indian railways commitment towards transparency and equitable policies is
crucial. All steps in this direction will boost industry confidence in the IR and
enhance its brand image as transparent and trusted business partner

91
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Organizational
Restructuring
92
SPJIMR Team 702

IR should focus on the complementing need of entrepreneurial and managerial energies that
private parties can bring in
The private partners cannot be viewed as agents but as dynamic organizations who would
like to grow
The current internal structure and orientation (strong cadre culture, hierarchy orientation
and top management structure) of the IR, makes it very daunting for private players to
develop PPPs with the MoR
Apart from the specter of dealing with a large machinery like IR, the popular perception is
that there are issues of
I. one sided contracts
II. interpretations of unclear implications going in favor of the railways
III. conflict of interest due to IR playing the role of Licensor, Operator and Regulator
There has been reinforcement at the political level on the issue of PPPs
Drivers for Successful PPP
Problems with current structure
Positives
Creating an organization that listens to, learns from and is responsive to a variety of
stakeholders including customers, other affected and involved entities, and partners in PPPs
Target Structure
93
SPJIMR Team 702

We recommend Two Step Change in Medium to Long Term
To increase transparency
and Private players
credibility
To make the
organization agile
Separate IRs roles
of
Licensor
Operator
Regulator
Move from current cadre
based functional focus to
Market Segment focus
Passenger
Freight
Auxiliary
Revenue
Restructure
Railway Board
Operator Role is further
broken along business
Markets
1
2
3
Step 1 Step 2
Eg. DGCA in
Airlines
industry
94
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FINANCIALS IN
2020
95
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96

2012
(Budget Estimates
All figures in INR Crores 2012 2020
(Budget Estimate) (Our Strategy Estimates)
Passenger Earnings 30,456 83,183
Freight Earnings 68,620 1,56,685
Other Coaching Earnings 2,903 6,293
Sundry Earnings 4,060 11,625
Suspense 200 -
Gross Traffic Receipts 1,06,239 2,57,785
Ordinary Working Expense 73,650 1,78,709.17
Depreciation Reserve Fund 7,000 16,985.26
Pension Fund 15,800 38,338.15
Total Working Expenses 96,450 2,34,033
Net Earnings 9,789 23,753
2020
(Our Estimate)
SPJIMR Team 702
TEAM 702
(Utham.K.S | Anubhav Agarwal | Tarun Gupta)
Indian Railways
Lessons in Marketing Excellence Season 3
Grand Finale
SPJIMR
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SPJIMR Team 702
98

Indian Railways should become a major THIRD
PARTY LOGISTICS SERVICE PROVIDER with end to
end logistics services
Indian Railways should be a WORLD CLASS
PREMIUM PASSENGER LOGISTICS SOLUTION
provider which includes transportation and
hospitality products
SPJIMR Team 702
IR should focus on Premium Customers
How can IR generate required money & build a
premium service delivery capability?
Passengers
Freight
IR should focus on capturing Non Bulk Goods market
What are the current issues and what should be the way
forward ?
Sundry Earnings
Focus on Commercial Publicity, Land & Fiber Optics
How to accelerate DFC What sections to be prioritized
How to host Service PPP?
Freight
Key
Recommendations
Key Questions Answered
in Presentation
R
e
v
e
n
u
e

Campaign Parivartan for

Passengers
IT Strategy for Freight
Customers
B
r
a
n
d
O
r
g
a
n
i
z
a
t
i
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n
a
l

R
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t
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SPJIMR Team 702

How is the presentation organized?

Section 1 Revenue Opportunities
Passengers Sundry Earnings
Freight
1. Analysis
2. Insights
3. Recommendations
4. Implementation
5. Impact
1. Analysis
2. Insights
3. Recommendations
4. Implementation
5. Impact
1. Analysis
2. Evaluation of options
3. Recommendations
4. Impact
1.a
1.b
1.c
Section 2 Supporting Changes
Brand Image
1. Insights
2. Campaign for each
Segment
3. Impact
Organizational Restructuring
1. Problem Analysis
2. Need for Change
3. Recommendations
Section 3 Financials
2.a
2.b
100
SPJIMR Team 702
Independent
View
Independent
View

Ms. Suma Kamath
DurgambaLuxury
Buses, Mangalore
Mr. Rame Gowda
Airavat division, KSRTC
Competitors
Mr. David Gomes
Customer Services, Indigo
Mr. Nitish Salian
VP, BIT Car rentals
IRCTC Customer
care center
Mr. C. Sharma,
Rail Coach
Factory
Mr. Subramanya
Naidu,
Station, Mysore
Online
booking
Food
Mr. Mangesh
Naik
Ticket booking
Agent
4 FGDs
38 Personal Interviews
130 Online Surveys
Premium Customers
Discount
Customers
Middle Class
Customers
Customers from
all segments
Supply side
Prof. Raghuram
Consultant to
Railways, Railways
Chair at IIMA
Dr.B.V.L
Narayana
Senior professor
Railway Staff
College
Spoke to all stakeholders in the ecosystem
101
SPJIMR Team 702

Prof. Raghuram
Consultant to
Railways, Railways
Chair at IIMA
Spoke to all stakeholders in the ecosystem
Mr.XXX
#
,
Member ,
Railway Board
Dr.B.V.L Narayana
Senior professor in Transportation
Management
Railway Staff College
V.K Tripathi,
Additional Divisional
Railway
Manager, Mumbai
Indian
Railway
Independent
View
Ashutosh Mishra,
Manager Operations
Innovative B2B
Logistics Solutions Ltd
Mr. YYYY
#
Senior Manager,
Mahindra Logistics
VikramPrasad,
Practice Leader ( Supply
Chain Services)
ITW India Ltd
Logistics
Service
Providers
Supply
Chain
Experts
Prof. Ajit Prasad
Strategy & Operations
Board member, Power
Finance Corporation
Prof. Renuka Kamath
Distribution & Sales
SPJIMR
Abhishek Roy
Senior Consultant,
Meibach Supply chain
Consultants
End
Customers
Rajesh Tungala,
Outbound Logistics
Chandan Aggarwal
Sr. CMI Manager
Unilever
VasimAhamad,
Head, Domestic
Logistics,
Sunil Bhradwaj,
Head, Divisional
Planning,
Jayadev Behera,
Procurement division,
Sayan Majumdar,
Sourcing division,
Mr. K.N.
singh, Divisional
Operations Manager-
Western Railways
17experts
across the value
chain
# Anonymous under request 102
SPJIMR Team 702
Passenger Section
103
SPJIMR Team 702

68%
32%
0%
1951
Railways Roadways Airlines
12%
87%
1%
2011
Railways Roadways Airlines
STEEP FALL
Problem is severe in case of
passenger transportation market
compared to Freight
Source Indian Railway Yearbook
Issue Diagnosis
104
SPJIMR Team 702

Supply side trends
Premiumisation
Urbanization
Synthesis of Supply side trends
105
Non Sub-Urban AC Tier 3 s share of revenue in Railways total is the
Highest Growing YoY
Competition says - We will continue to convert Rail Users to use our
services more frequently
SPJIMR Team 702

Indian Railways is the only player in transportation
business with the assets & capability to provide
complete passenger transportation solution
Owns Land at the center of cities
Capability to provide facilities across value chain from Food to stay
facilities
Ability to aggregate services
*We will deal with the negatives at
the later stage
Competitive benchmarking
3
106
SPJIMR Team 702
Urban (30% of India) Rural (70% of India)

4
Demand side Segmentation
5.1%
6.5%
22.3%
42.3%
25.5%
25.9%
28.9%
21.7%
21.4%
4.7%
Upper
Upper Middle
Middle
Lower
Middle
Lower
Upper
Upper Middle
Middle
Lower
Middle
Lower
India 1
India 2
India 3
Maximum Benefit Seekers
Maximum Brand owners
Maximum Convenience Seekers
Cash constrained benefit seekers
Have Cycle + Radio + Fan
Hand to Mouth Existence
Income
distribution
PREMIUM
POPULAR
DISCOUNT
Source NCAER
Source NCAER
107
SPJIMR Team 702

India 1 is where the money is
We are the least preferred choice of transport service for
India 1*
If we are successful in increasing the railways spending
share of India 1 to the level of India 2 and India 3 It is an
incremental market opportunity of INR 28000 Crore
by 2020
#
Synthesis of Demand segmentation
*Primary Research outcome
** McKinsey Projections
#
India 1 currently spends 10.5% of it travel expenditure on railways
India 2/India 3 spends 15% of their travel expenditure on railways
India 1s travel expenditure is going to grow from INR 5332 in 2011 to INR 16800 at the rate of 7% CAGR**
So India 1 which will be of a size of 350 million population by 2020 ** could be spending anywhere around INR 1400 on
railways at 15%
350 million x INR (1400 600) = INR 28000 Crore
4
Demand side Segmentation
108
SPJIMR Team 702

5
Demand side Needs
What does India 1 want?
Our Approach to Understand the needs
Studied successful SERVICE brands targeting India 1 across industries
Step 1
Hotel Saravana
Bhavan
Focus Group discussion + Online Survey
Step 2
SNCF French
National Railways
Promptness in
Service delivery
Genuine Customer
Orientation
Top 2
Requirements
1 2
Ability of the organization to consistently over-deliver on its expectations
109
SPJIMR Team 702

5
Demand side Needs
110
Increase IRs Wallet share of premium India by adding premium facilities
on Railway premises
When Premium India travels from point A to point B, travel fare is just a
fraction of its total spend food, entertainment and stay forms significant
portion of his complete travel expenditure
- Synthesis from personal interviews of India 1
Insight
Opportunities of Up-selling auxiliary services
Food
Entertai
nment
Stay
Train fare
Core offering
SPJIMR Team 702
LD
INTER
CITY

PLD
OVER NIGHT
SUBURBAN
NON
URBAN -
GENERAL
R
e
q
u
i
r
e
m
e
n
t
s

O
f

C
o
m
f
o
r
t
R
e
q
u
i
r
e
m
e
n
t
s

O
f

A
d
d

o
n

f
a
c
i
l
i
t
i
e
s
V
e
r
y

L
o
w
V
e
r
y

H
i
g
h
Very Low
Very High
Price Sensitivity
Time Sensitivity
Legend
PLD Premium Long distance
LD Long Distance
Least Attractive
Moderately Attractive
Highly Attractive
Premium Long distance and Overnight travel Our Segments of Choice
Sub Segmentation of India 1 customers based on their Travel Pattern
111
Adopted from Mr. BVL Narayanas work on Passenger Logistics
SPJIMR Team 702

AC Tier 3
AC 1st Class
Sleeper Class
Second Class
Luxury Buses
Low Cost
Airlines
14 Paise / KM
26 Paise / KM
111 Paise / KM
231 Paise / KM
200 Paise / KM
240 Paise / KM
Given that, It costs IR 40 paise per KM
Second Class and Sleeper Class are
operationally not profitable
AC 1
st
Class does not have enough
reasons to justify its pricing
comparable to Low Cost Airlines
AC Tier 3 is the best option in
terms of
Profitability
Competitive Advantage
AC Tier 3 is Our Choice for the Seat Class + Discontinue AC Class 1
Team 702 Analysis, Based on Primary research
112
SPJIMR Team 702

Segment the passenger market into Mass and Premium
Premiumsegment should subsidize Mass segment
Run Exclusive AC Tier 3 coaches on Long distance and
Overnight routes targeting premium class
Opportunity to increase the wallet share of premium
customers by adding high quality services in
Food, entertainment and stay in Railway premises
Mid Way synthesis of recommendations
113
SPJIMR Team 702

How can IR compete effectively with Airlines for India 1 Customers?
Make Journey Time
Comparable
Give them true premium
class service
Top 2 drivers
Run Passenger trains at 180-
200kms speed
Busy routes like Mum Del, Blore
Del should be overnight
Shift from Multi segment
service trains to Specialized
trains
Full trains must be AC Tier 3/ Tier 2
Upgrade in-train facilities
Bath facilities and up gradation to
improve passengers sleep quality
Change Organizational
Structure to make it responsive
to customer needs
Align the structure along the
customer segments
Above assessment is based on our in depth interview with
1. Senior Official from Railway Board
2. Senior Professor from Railway Staff College
3. Prof. Raghuram, Consultant to Railways, IIMA
Practicality of
Solution
Low -
Medium -
High -
114
SPJIMR Team 702

Evaluating Strategies Leasing out is our choice
Build Service
Capability with in
the Organization
Buy out an Hospitality
Company with Premium
service offering capability
Cost
Effectiveness
Private
Participation
Lease out
Premium
Service trains
Time to
implement
Control over
revenue
Good
Good
Good
Good
Satisfactory
Satisfactory
Poor
Poor
Poor
Excellent
Poor
Poor
Assessment based on interaction with various stakeholders
Our Choice
115
SPJIMR Team 702

Selecting the train services to Lease out
116
Strong
National
Brand
Weak
National
Brand
Low
Profitability
High
Profitability
Rajdhani
Duronto
Shatabdi
Jan
Shatabdi
Garib Rath
Superfast /Mail
Express
Passenger/Fast
Passenger
Rajya Rani
Express
SPJIMR Team 702

Lease out the services of Rajdhani, Shatabdi
and Duronto trains to private players for 10
years
Upgrade platform facilities in four Metros
Premium food courts, entertainment options
like gaming parlors and Semi Luxury
Hotels (MFC)
Our Proposal
117
SPJIMR Team 702

Rajdhani Duronto
Shatabdi
22
24
16
Premium Long
distance trains that
could be leased
Our Analysis yields
Minimum Bid amount to lease for 10 years per train service INR 426 Crore
Annual Revenue Potential per Train @ 130 paise per PKM
INR 68 Crore
Annual Fees to Railways for using its Network, Platform & Signaling
@50 paise per PKM INR 26 Crore
Lease Activity will generate a cash of INR 27000 Crore
Minimum Rate of return possible for Private Players
10% p.a
118
SPJIMR Team 702

Invest INR 27000 Crore in accelerating DFC implementation
Crash the journey times to Under 12 hours on all important
routes
Start New Rajdhani + Duronto + Shatabdi services
Service quality should match up to the one by Private players
Build Capacity
Our Analysis yields
There will be a Market opportunity to run 304 more Premium Long Distance and Overnight
Intercity trains by 2020
This translates to an addition of 133 million originating passengers fromIndia 1 segment
This is about 1.6% of current Passenger base of Indian Railways
Revenue addition of INR 25000 Crore
119
Add Capacity
Accelerate DFC
2012
New Premium Class
trains run by IR
2016
Expected Time
of completion
of 2 DFCs
2018
2017
Revenue of INR
55436 Crore
from Passenger
segment
IR must be running
300 premium
service trains -
Private managing
the rest 60

Lease
Out
2020
Start Adding
New Trains in
Premium
Class
Add 50 New
Premium
service trains
Buy back
the Lease
from Private
players
3/29/2012 120
Up gradation in Platform services Premium
food, entertainment options & Stay
2013
SPJIMR Team 702
Closure,
By 2020,
IR will possess a strong fleet of 360 Mass-Luxury
trains
Upgraded premium hospitality services
Customer centric employee population
Expansion of these competencies to the mass
segment will bring IR closer to our Vision 2030 of
it being World class Passenger logistics solution
provider
121
SPJIMR Team 702
Freight Section
122
SPJIMR Team 702

1950-51
82 Mn Tonnes
11%
89%
Railways
Roadways 34%
65%
1%
Railways
Roadways Coastal Shipping
46%
53%
1%
Railways
61%
30%
2%
2% 5%
Coastal Shipping
Roadways
Railways
Coastal Shipping
Inland Water Transport
Pipelines
Roadways
1978-79
283 Mn Tonnes
1986-87
485 Mn Tonnes
2007-08
2,555 Mn
Tonnes
66%drop in market share since 1951
Source KPMG , Adding Wheels,2010
Issue Diagnosis
123
SPJIMR Team 702
I am even ready to pay extra and use road
transport to avoid the hassle of dealing with
Railways .
- Mr. WaseemAhamad, Supply Chain &
Logistics (Head), Pidilite ( Industrial &
Consumer Adhesives)
Customer Confidence
Low-
Medium-
High -

Supply side trends
3
Indian Railways, as an organization needs to
learn a lot when it to comes to customer and
Partner Interfacing
- Prof G Raghuram, Indian Railways Chair
professor, Consultant to IR
Partner Confidence
Low-
Medium-
High -
Railways policies towards private container
train operators invoke mistrust
- Ashutosh Mishra, Manager Operations,
Innovative B2B Logistics Solutions, a private
CTO.
Customer and Business Interfacing reflects a major lacuna in IRs skills
124
SPJIMR Team 702
Capacity
Creation
Reactive Development
Customer and
Business
Interfacing
Asset
Efficiency
Lack of Upgradation
Huge Lacuna
Current Scenario
Projected Market
Share in 2020
1%
25%
69%
5%
Air Rail Road Water
A further 5% drop in market share on the current trajectory

Source Crisil Research
125
SPJIMR Team 702

836
1759
659
1881
1495 3640
Bulk
Non-
Bulk
2009 2020(P)
Total
CAGR
10%
8.4%
Demand side trends
2
7%
Billion Ton KM
395
185
100
Freight Rate/Tonne KM
Freight Rates - Comparison
India China US
Indian Freight Rates are among the
highest in the world
Non-bulk freight segment will grow
faster than the overall freight growth
Source McKinsey Research; MoR, White paper on IR;Crisil
Research
126
IRs Price Realization potential for
Non Bulk goods is higher
-MoR, White paper; MoR Vision 2020
Examples of Bulk goods : Iron, coal, fertilizers
Examples of non-bulk goods : Autos, FMCG, FMCD
SPJIMR Team 702
127
Demand side trends
3
Bulk
Projects
Containerized
Non-Bulk
H
a
n
d
l
i
n
g

S
e
n
s
i
t
i
v
i
t
y
V
e
r
y

L
o
w
V
e
r
y

H
i
g
h
Very Low Price Sensitivity
T
i
m
e

S
e
n
s
i
t
i
v
i
t
y
Least Suitable
Moderately Suitable
Highly Suitable for Rail
Very High
Parcels
Documents
Too sensitive for IR to handle
IR has high market share here.
Segment hrinking as part of
total pie
Ideal segment to grow market
share. Higher value than bulk
and higher segment growth
rate. Requires Value added
services
Consignment Size
Based on Prof BVL Narayanas working paper on innovation for IR
SPJIMR Team 702

Railways has potentially higher advantage when compared
to other modes on cost and carbon footprint
Bulk goods the mainstay of Railways freight will grow at a
slower pace than non-bulk goods
IR needs to gain market share in high value segments
IR needs to gain market share in non-bulk
segment to double its revenue
Synthesis of Demand Trends
*Primary Research outcome
** McKinsey Projections
3
Demand Trends
128
SPJIMR Team 702

What does IR need to do compete with Roads in Non-Bulk segment
Time Bound and
reliable transport
End to End Logistics
services
Service record to design
and handle multi-modal
complex supply chains
Faster turnaround and
better speeds
Storage, Cross docking
and Value added services
Supply chain expertise
and service oriented
customer focus
Dedicated freight
corridors ,upgraded
wagons and axle
capacity
Multi-modal logistics
parks with storage and
value added services
Organization
restructuring for
customer focus and
service orientation
Build Capacity
Build Capability
129
SPJIMR Team 702
130
2
What are the capacity creation choices
Create Dedicated
freight corridors
Choice
Segment
Impact
Partnership
attractiveness
Create Multi-modal
logistics Parks*
High Speed & Bullet
train corridors
Gauge Conversion**
Axle load and
Wagon up gradation
Bulk and Non-bulk freight
segment, Passenger
Last mile
connectivity
Freight Non Bulk segment
Passenger Segment
Freight : Bulk Segment
Freight : Bulk Segment
Freight : Bulk Segment
Good
Satisfactory
Poor
Excellent
Poor
Satisfactory
*A Multi-modal logistics park provides connectivity to various modes , besides warehousing and other value added services
** Conversion from Meter gauge to Broad gauge

SPJIMR Team 702
1. Build 5 Dedicated Freight Corridors
instead of just 2*
Add Mumbai- Kolkata, Delhi-Chennai, Goa-
Chennai
2. Build 10 Multi-Modal Logistics parks
around the DFCs
Synthesis
*Primary Research outcome
** McKinsey Projections
3
131

SPJIMR Team 702
1
Delhi
Mumbai
Kolkata
Chennai
1
5
3
2
4
Goa
Potential Location for
a MMLP
Dedicated Freight
Corridor

132
Delhi-Chennai, Delhi Mumbai
, Delhi Kolkata Mumbai Kolkata
have the maximum sections with
over 120% capacity utilization
Which routes for DFC
Goa-Chennai corridor will help in
gaining market share in autos and
consumer durables
Building 5 corridors would help
building capacity proactively
Build 10 MMLPs at favorable
locations in an around and the
DFC corridors
SPJIMR Team 702
7
Tackling Finance- Options
133
Internal Accruals
Loans from International
Institutions/
Governments
Gross Budgetary Support
Private Partnership
Feasibility
Probability of
Swift Financing
Qualitative Comment
Low
Very High
High
Medium
Low
Low
Low
High
Recent rise in operating ratio
has dried internal reserves
Difficulty to swiftly arrange
capital through this route
IRs recent demands for
increase in GBS have not
been fruitful. Not a reliable
source
Most swift and feasible
method if effectively used

SPJIMR Team 702

Bid out Chennai-Goa DFC on
a Build-Finance-Operate-
Transfer basis for a period
of 15 years
Our Proposal
134
SPJIMR Team 702

Gives highest return and freedom to the
private player of all partnership models
Railways doesnt need to worry on
financing of the project
Railways earns from maintenance and
haulage thus retaining core competence
Why Build-Finance-Operate-Transfer model
135
SPJIMR Team 702

Least loss of earnings when giving operations
to a private player and still attractive
Bidding this route has a potential to generate
enough capital to finance Mumbai-Kolkata
and Delhi Chennai
Highest return and lowest capital cost of the
three* routes
Why Goa-Chennai
136
*Mumbai-Kolkata, Delhi Chennai, Goa-Chennai
SPJIMR Team 702

Bid activity will generate a cash of INR 1,16,393 Crore
Our Analysis yields
INR 7405 Crore
Annual Revenue Potential @ 98.73 paise per NTKM
INR 5330 Crore
Annual Fees to Railways for using its haulage, Platform & Signaling
@71 paise per NTKM
Minimum Rate of return possible for Private Players 10% p.a
1. Use the cash to start and fast-track process of building Mumbai-Kolkata and
Delhi-Chennai corridors
2. Use the surplus from generated from leasing out Rajdhanis as contingency
resource/ railway equity in the project
Prospective buyers consortium of big private players like Mahindra
Logistics, Reliance logistics , Adani Logistics.
Cross industry Example Indus Towers ( Telecom) 137
SPJIMR Team 702

Fastrack to complete Delhi-Mumbai and Delhi Kolkata DFCs
Use revenue surpluses to support cost escalations in other 3
DFCs and build multi-modal parks
Complete all five DFCs with land acquisition and supervising
support to Chennai Goa DFC
Build Capacity
Our Analysis yields
In 2020, Indian Freight movement is projected be 3450 BTKM*
An estimate of 46% market share a result balance modal mix between roads and rails
Revenue addition of INR 94,196 Crore
* Crisil Research, McKinsey Research
138
SPJIMR Team 702
Tackling lack of interest in MMLP scheme
Raising the Economic interest in
the partnership proposition
Addressing economic
concerns due project
delays because of land
acquisitions
Top 2 CSFs
Shift from
infrastructure
only
partnership to
Infrastructure
+
Service
partnership
Prospective Partners
TCI, ConCor
Infrastructure + Service PPP
Risk sharing on Business
development and Project
delay
1
Build Capacity
Build Capability
139
Make the policy document
more transparent and
increase trust by
increasing railway equity
Make this a training ground
from IR employees to take
over business development
and supply chain skills
IR should help the project in
land acquisition and other
admin delays.

Use Cash to
plan 2 other
DFCs
2012
2016
Expected Time
of completion
of 2 DFCs
Revenue of INR
1,56,685 Crore
from Freight
segment
IR must complete 4
DFCs on self and one
should be built by
private player

BID
Out
2020
Use revenue
surpluses to
support other
DFCs
Buy back
the DFC
from Private
players
Add Multimodal
Logistics Parks
in phased
manner
SPJIMR Team 702
141

Peripheral and Value added
services
Primary Services
Warehousing & Distribution
THIRD PARTY LOGISTICS SEGMENTS
C
o
m
p
l
e
x
i
t
y

a
n
d

R
e
t
u
r
n
s
Basic cargo Operations Generic Cargo Handling
High
Low
Management
Services SCM
Design, Analytics
IR is currently here
Through DFCs and logistics
parks
Through multi-modal
logistics parks
Through service partnership with
private players in logistics
SPJIMR Team 702
Sundry Section
142
SPJIMR Team 702
1. Publish the assets inventory online to increase visibility
among brand managers and marketing agencies. Setup a centralized
portal listing all assets available for commercial publicity
Availability status of assets with approximate rates
Resources on ROI and other metrics to gauge impact
Case studies on past campaigns
2. Invest in making these assets popular among brand
managers and marketing agencies
Search Engine Marketing and Optimization
Participate in outdoor advertising seminars and conferences
Evangelize through blogs, forums and public groups for marketing and
advertisement
As per calculations, revenue from commercial publicity in 2020 will be INR 922 cr

SPJIMR Team 702

Simplify the bid process and complicated documentation
Develop the capacities of creating assets in concurrence with private
partner rather than taking the money and calling the shots over the private
partners
Multi Functional Complexes which include shopping, food stalls/
restaurants, Coffee Shops, Book stalls, PCO Booths, ATMs, Medicines and
Variety stores, Budget Hotels, parking spaces will be in line with our
strategy to focus on Premium Customers
Way Forward
1
Relax the mandate to
involve residential
buildings
2
Short term leases with
the time horizon of 10
to 15 years is the way
forward
3
Create assets in
concurrence with the
private player
144
SPJIMR Team 702

Industry is seeing
continuous fall in
revenue -
Its core network is laid
along the railway track and
has limited last mile access
Way Forward
1
Increase Volumes to
absorb high fixed costs
2
Develop Value added
services to protect
margins
3
Adopt innovative
pricing schemes
Failure to provide
End to End solutions
which are in demand
Failure to match the
service agility of
private competition
Our Recommendation
145
Focus on BULK BandWidth Leasing
Target Government Projects as they give you high volumes
Develop complete network solutions for Healthcare and e-learning applications
SPJIMR Team 702
Brand Image
Correction
146
SPJIMR Team 702
31%
22%
18%
Dirty Late Crowded
37%
21%
15%
Sarkaari Bureaucratic Political
Say 1 word which
you would
associate with
the Indian
Railway?
Challenges
Huge negative word of mouth
marring the brand image
+ few service delivery failures
overshadow the majority
successful deliveries of
promised service
Size and organization
structure act as resistance to
change
Customers do not appreciate
the complexity of service and
its underlying operational
challenges
There are rats even in 2A coaches. I dont want to travel in
IR as it is unhygienic and dirty - Vice
President, MNC, Mumbai
Typical sarkaari organization hai, I wish I dont have
to deal with them. There are no processes -
Manager, Logistics company
Passenger Freight/ Logistics Customers
Say 1 word which
you would
associate with
the Indian
Railway?

147
SPJIMR Team 702

Brands Studied
Services Marketing Triangle
Railways (Management)
Customers
Employees
delivering the promise
Three stakeholders
Management, Employees &
Customers and Involvement of each
is crucial for service brand
enhancement; Interactive
marketing is most effective strategy
What should be Indian Railways Promise?
Genuine Customer
Orientation
Collect feedback and act on it
Proactive initiatives to solve
customer issues
Quality Service
Consistent at every touch point
Meet or beat Customer
expectations
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Evaluation
Criteria
Significance of
evaluation criteria
TV
campaign
Print
Media
campaign
Social
Media
Campaign
Radio
campaign
On
ground
experienti
al
campaign
Budget required
Strict budget constraint
of INR 60 cr
5 2 1 3 2
Execution
challenges
How challenging the
implementation of
campaign is?
3 3 2 3 1
Involvement of
target stakeholders*
Active involvement of
customers and employees
0 0 3 0 4
Tracking the
progress
Trackingcampaign
impact through tangible
metrics is crucial
1 1 3 1 3
Actionable feedback
Can we capture feedback
from the stakeholders to
improve future delivery?
0 0 3 1 3
4 Very High 3 High 2 Moderate 1 Low 0 Very Low
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Enhance IR brand image through on ground activation and
social media campaign Parivartan under
the direction supervision of Indian Railway Minister
Low budget requirements
Active involvement of both customers
and employees
Easy to track and measure success
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Indian Railway Parivartan Customer Satisfaction Score
Two Passenger Satisfaction Feedback machines will be
installed per station near major entrance/exit
PNR based feedback to prevent redundancy & misuse of service
Score will increment real time with every feedback
Scores will be displayed in two prime locations of
station to capture maximum customer eye balls
0
50
100
150
Week 21 Week 22 Week 23 Week 24
New Delhi Station - Unhappy
Customers ('000s)
Monthly report of stations will be shared with
senior management and railway minister
Station performance metric sharing on
Facebook and with Minister will incentivize
Station Staff to do better job. There will be no
monetary rewards but Psychic Rewards
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Create Transparency and
Trust through Technology
Railways (Management)
Industrial
Customers and
Investors
Employees
Technology
Collaborative policy making
Create processes and automate:
1. Distribution of rail capacity
2. Tender and auction activities
3. Allocation of rakes, good sheds
and other resources
1. Invite industry players for
regular meetings and input
sessions
2. Involve different stakeholders
before major amendments in
policies
Indian railways commitment towards transparency and equitable policies is
crucial. All steps in this direction will boost industry confidence in the IR and
enhance its brand image as transparent and trusted business partner

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Organizational
Restructuring
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We recommend Two Step Change in Medium to Long Term
To increase transparency
and Private players
credibility
To make the
organization agile
Separate IRs roles
of
Licensor
Operator
Regulator
Move from current cadre
based functional focus to
Market Segment focus
Passenger
Freight
Auxiliary
Revenue
Restructure
Railway Board
Operator Role is further
broken along business
Markets
1
2
3
Step 1 Step 2
Eg. DGCA in
Airlines
industry
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FINANCIALS IN
2020
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155

2012
(Budget Estimates
All figures in INR Crores 2012 2020
(Budget Estimate) (Our Strategy Estimates)
Passenger Earnings 30,456 83,183
Freight Earnings 68,620 1,56,685
Other Coaching Earnings 2,903 6,293
Sundry Earnings 4,060 11,625
Suspense 200 -
Gross Traffic Receipts 1,06,239 2,57,785
Ordinary Working Expense 73,650 1,78,709.17
Depreciation Reserve Fund 7,000 16,985.26
Pension Fund 15,800 38,338.15
Total Working Expenses 96,450 2,34,033
Net Earnings 9,789 23,753
2020
(Our Estimate)