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Asian Paint Strategic Management
Asian Paint Strategic Management
ON
ASIAN PAINTS LIMITE
SUBMITTED SUBMITTED
TO BY
SCHOOL OF MANGEMENT
WARANGAL-506004
Audacious in vision.
Good in distribution.
* Sourcing efficiencies
2. Background
ASIAN PAINTS Page 5
Asian Paints Limited was established in 1942 as a partnership firm by four
friends Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and
Arvind R.Vakil to manufacture paints in a garage in Mumbai (Bombay). From
its humble beginnings, the company has moved on to become the largest paints
company in India with a market share of 30 per cent.The company with a
turnover of US$ 535 million on standalone basis and US$ 640 million on
consolidated basis (including turnover of all its subsidiaries) is one of the top
ten decorative paints companies in the world. Its reach and dominance in the
Indian market can be gauged from the fact that it is more than twice the size of
its neares competitor in India and it has been the market leader in paints
industry in India since 1968.The company operates in 22 countries and has 29
paint manufacturing plants in the world which service consumers in over 65
countries.The company operates around the world on its own and also through
its three subsidiaries Berger International Limited,Apco Coatings and SCIB
Chemicals.The company aims to become one of the top five decorative paint
companies in the world and has embarked on an aggressive strategy of
expanding its global operations. The promoters hold the majority stake in the
company (46.8 per cent of the equity stake).The next largest shareholders are
the foreign institutional investors (19.5 per cent stake), followed by Indian
public (16.5 per cent stake). Domestic banks, financial Institutions, mutual
funds and insurance companies hold 13.4 per cent stake. Corporate bodies and
non-resident Indians hold the remaining stake.
“Asian Paints aims to become one of the top five Decorative coatings
companies world-wide by leveraging its expertise in the higher growth
emerging markets. Simultaneously, the company intends to build long term
value in the Industrial coatings business through alliances with established
global partners . “
4. MISSION
To provide paints as per market demand, ensuring desired level and quality of
customer (dealer) service, continued availability of the right product mix of
right quality at the right time.
CORE VALUES
CORE PURPOSE
Year Events
Asian Paints is more than twice the size of its nearest competitor.
strong in inventory control (18 processing centres, 350 raw material and
intermediate goods suppliers, 140 packing material vendors, 6 regional
distribution centres, 72 depots are integrated)
Manufacturing/Operations factors :
Human Resources :
HIGH calibre
Information Technology :
7. Corporate factors :
QUALITY POLICY:
Asian Paints sound marketing has earned it strong brand equity. It has been able
to do it by focusing on product features that are appreciated by customers. And
by ensuring that the products are of high and consistent quality and are widely
available b Enviable track record in breaking away the position of MNCs in the
Indian paint Industry building a strong distribution system.
The paint industry of India is more then 100 years old. Its beginning can be
traced to the setting up of factory by Shalimar Paints in Kolkata in 1902. Till the
advent of World War II. The industry consisted of just a few foreign companies
and some small. Indigenous producers. Foreign companies continued to
dominate the industry.
At the time Asian Paints entered the Indian paint business. Distribution was the
most crucial task for any new entrant. Both physical distribution and channel
management posed formidable challenges. The foreign companies and their
wholesale distributors dominated the business. Also they were shutting the
doors on any new paint company seeking an entry into the business. They
concentrated on big cities where they could make the sales without much
investment in distribution infrastructure and market development.
1. Asian Paints bypassed the bulk buyer segment and went to individual
consumers of paints.
2. Asian Paints went slow on urban areas and concentrated on semi urban
and rural areas.
3. Asian Paints went retail. While its competitors remained content with a
handful of wholesale distributors. AP preferred direct contact with
hundreds of retail dealers.
4. Asian Paints went in for an open door policy. It broke the prevailing
trend in those days. Of limiting the number of dealers to the barest
minimum. And chose to use practically everyone in the trade. Who was
willing to function as its dealer?
As already mentioned. Asian Paints is India's largest paint company and the
market leader in decorative paints. The story of Asian Paints is a story of
marketing excellence. It achieved an enviable leadership position by mastering
the distribution function and gained a distinctive and powerful competitive
advantage.
Strength :
weakness :
opportunity :
Threats :
Growing industry and low capital intensive nature of business will attract
competition.
10.Market segmentation :
Asian Paints segment the market based on the usage :
BRAND POSITIONING
It is how the Asian paints enabled people to form a mental image for their
products in the customer’s mind. The strategies that they followed where as
follows,
Brand Image
The ways in which Asian Paints attempted to meet the customer’s psychological
and social needs.Indian paint industry is a low involvement industry. Till 1990s
people will just tell their budget for painting their house to their contractors.
And few customers will also mention the colour they need. During that period
Asian Paints analyzed the customer market and found that people where not
brand conscious but their concern was only the price of the paint. To meet this
Umbrella Brand
In 2004 the company realized that though they have almost 20 brands only few
products like Apex emulsion, Royale interior emulsion, Apcolite and Touch
wood had high recall among the customers. Therefore they decided to promote
the brand as a whole, to create a corporate image and the various products under
their Umbrella Brand “Asian Paint”, which became their mother brand. This
created a “Brand Awareness” as a whole among the customers.
Brand Portfolio:
Asian Paints has embarked on an umbrella branding policy encompassing all its
products and services. The project includes a new visual identity that establishes
the company name as the dominant reason for purchase. Tractor, Royale, Utsav
and Apcolite names are no longer the focus on the can, rather consumers will be
buying "Asian Paints." Some key brand names are being retained for the time
being--to signal a position in the market rather than a product or surface. For
instance, Tractor will represent the "value for money" brands.
The immediate advantage is obvious. Rather than spread resources thinly across
brands and sub-brands, a company centric portfolio can synergize
communication efforts. To be competitive in a world of fragmentation and rising
costs, traditional mass media, such as television, can be prohibitively costly.
With the umbrella-branding move, Asian Paints can also afford to move forward
from a mere functional platform for each individual product to the high ground
of a mood-based emotional dimension.
An Underlying Theme
11.ANSOFF Matrix
Asian Paint’s value for the customers was build through innovative package
(size),distribution , and communication .In 1970’s they decide to computerize
and network their 30 depots round the country ,to provide proper feedback of
market needs ,resulting in quick response to meet the needs.
They planned a new distribution structure , smaller packages and
computerized communication networks. Asian paints differentiation strategy
starts from market segment, distribution & packaging .
With increasing volumes in chosen segments Asian Paints achieved
economies of scale for cost leadership .With their dominant position they
diversified in product range as also market and geographic segment.
1. They diversified into manufacturing raw materials for paints.
2. product diversification also included industrial paints .Now with a large
market share ,they have strong distribution network even in metros.
Asian paints strategy of quick response translates into supplying 95% of the
order supply in 48 hrs which is a positive competitive advantage .Their R&D
has developed new products to later to industrial & scientific segments . The
paint industry is in growth stage in India as construction activity has a high
priority.
With 27% market share, they enjoyed double the market share than their
nearest competitor .In order to maintain this leadership position they have
drawn up the following strategy.
12.Future Plans :
The company plans to consolidate its dominant position in India by launching
new products in line with the market developments in both decorative paint and
industrial coating segments. The company is focusing on further improving the
operations of all of its subsidiaries in India and abroad and has already launched
E-Strides, an ERP initiative through which all the overseas ventures are being
covered for sharing of global knowledge, best practices and better control on
operations. The company’s objective is to be among the top three players in
each market where it is currently operating or plans to operate in the future
Its observed that Company’s succeed in today's free market economy, only
because their employees perform to their fullest potential. The governing theme
in the organisation is the well being of their employees strategies.
Because of this Economic crisis all over the world,the company profit
percentage gets reducing.
To control this, There should be a meeting with all familiar construction
companies CEO to get their views on financial crisis aspects and financial
management.
But, Reduced financial expenses have resulted in substantial increase in
the return on net worth as well as the capital invested from them.
14.CONCLUSION
LOTS OF AWARDS