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Power
Power
OBJECTIVE
To Provide the business strategy for Asian paints To compare the same with other competitors for India centric business.
India's largest paint company One of the top ten decorative coatings companies in the world. Started by four entrepreneurs, Champaklal Choksey, Chimanlal Choksi, Suryakant Dani and Arvind Vakil Turnover: INR 0.35 million(1945) to 54.3 million(2009)
BUYERS 1. Decorative: Fragmented Market. LOW POWER 2. Industrial: Low switching costs. Corporate have HIGH POWER
Existing Rivals
1. Berger 2. GN 3. ICI 4. JNPL
Suppliers
1.Tio2 Imported, 2.Few suppliers, 3.Availability of Substitutes of RM Low HIGH BARGAINING POWER
Market Share
Company APIL GNPL Berger Paints ICI Jenson & Nicholson Others Industrial Market 14.50% 42.50% 14.20% 7.80% 8.10% 12.90% Decorative Market 37.50% 10% 11.20% 7.80% 5.50% 38%
GNPL
Provide paint shop management services to sell solutions rather than product
BPIL Increase
focus on southern markets in India
ICI Increase
capacities to strengthen presence in fast growing architectural segments
JNIL
Leverage on JV for growth in Industrial segments
SPIL
Consolidate position in architectural paints
SNIL
Consolidate position in Repainting exterior paint market
BASF
GNP
Kansai Paints Nihon Tokushu Herberts Valspar Corp. Teodur Tikkurila Herberts Chugoku Becker Salphi W.R.Grace ICI
Auto & Industrial coating Auto coating Auto coating Heavy duty coating Powder coating Decoratives Auto refinish Marine Coil coating Marine coating Can Coating & metal packaging Auto refinish
DEVELOP
Build new competency to Create the Future
MARKET OPPORTUNITIES
DEFEND EXISTING
Defend existing market by strengthening existing competencies
DEEPEN
Build Complementary/new competency to fortify position in Existing Market
EXISTING
Distinctive Competencies
NEW
DEFEND:
Consists of rural and the urban market in which AP is playing. They are a target to many global companies, which are playing in Indian market via Indian arm of their operations like ICI has Berger, Kansai has JN
DEEPEN:
Industrial segment of Indian paint industry where AP has a weak presence. It has a presence in automotive segment but ranks a poor second. It needs to form alliances with foreign players to enter into this segment. It can also look for tie-ups with the company, which have tie-ups with those companies whose daughter arm is operating in India, to lock the account. Its move of taking over Haucoplast is one step in this direction. Their tie-up with PPG has given them a good presence in automotive segment, capturing clients like Santro, GM, Ford etc
DISCOVER:
this forms the basis of fast growth. AP has identified opportunities abroad in developing countries similar to India. To enter into these countries they adopted the process of acquisition.
DEVELOP:
Paint industry is primarily a product-oriented industry up till now. Huge potential exists in the service side also. Introduction of color-world, providing service in painting and interior decoration etc are steps taken to acquire the whole chain and becoming full service provider. Need to Ensure value-adding services are possible. These can be integrated to provide an umbrella service. .Constant reminders to the customers to repaint, or upgrade.
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Industry is characterized by the presence of intermediaries who have a very high influencing power on the purchase decisions of the consumer, especially in the urban areas. Asian Paints strategy for acquiring higher product demand could be three pronged. Use these intermediaries for initiating demand: The intermediaries (the painters, contractors, designers, decorators etc.) could be used as a marketing arm of the company. Occupy part of the intermediary space and try to sideline other intermediaries: Asian Paints should open a service arm, which would provide the services provided by the existing intermediaries in the market. Being present in different seditions of the value delivery system and having a strong brand equity in the Paints market would give AP the credibility to operate a strong service arm. The service based strategy of AP could have two different approaches The first approach would entail creating a service arm that can cater to a large market The second one would necessitate the creation of a well-qualified service arm which is capable of providing value-added services. AP can follow both these approaches and cater to different market segments. The value-addition services arm would cater to the premium end of the market who have a very high willingness to pay and the other bundling services arm would cater to the demands of the masses. AP could try to reduce the power of the intermediary by increasing the Pull for the product. The role of the influencer could be drastically reduced by increasing the power of the end-consumer. AP can achieve this by establishing a strong brand name for its brands.
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