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ASSIGNMENT OF ESSENTIALS OF

ORGANIZATION BEHAVIOR

NAME: Harsh Bedi

REG NO. 11012129

ROLL NO.: B55

SECTION: T1006

CLASS: BBA

COURSE NO.:MGT104

SEMESTER II

NAME OF THE FACULTY MEMBER:


AMRISH DOGRA

((DEPARTMENT OF MANAGEMENT))
TOPIC: ASIAN PAINTS

INTRODUCTION:

Asian paints is India’s largest paint company and ranks among the top
ten decorative coatings companies in the world today, with a turnover
of Rs.30.2 billion (USD 680 million). It was formed as a partnership
firm by four friends in 1942. The company has an enviable reputation
in the corporate world for professionalism, fast track growth, and
building shareholder equity.

Asian Paints produces a wide range of paints for decorative and


industrial use. It also manufactures products like phthalic Anhydride
and pentaeryithriol. The chemicals business which contributes 5% to
overall sales of the group is managed for value. APIL’s product range
includes Wall paints, Metal paints, Wood Finishes, Primers and others.
Asian Paints produces a wide range of paints for decorative and
industrial use. It also manufactures intermediate products like phthalic
anhydride and pentaerythritol. The chemicals business which
contributes 5% to overall sales of the group is managed for value.
APIL’s product range includes wall paints, metal paints, wood
finishers, Primers and others.
Markets of Asian Paints

The countries that asian paints has presence are follows :

South Asia
Bangladesh, Nepal, India and Sri Lanka.

South East Asia


China, Malaysia, Myanmar, Singapore and Thailand.

Africa
Egypt

Caribbean Islands
Barbados, Jamaica, Trinidad and Tobago.

Middle East
Bahrain, Dubai and Oman.

South Pacific
Australia, Fiji, Solomon islands, Tonga, Samoa islands.
Strengths:

1. Market leaders with 35% market share in the organized sector, the
closest competitor does not have even half of ASIAN PAINTSs share;

2. Comprehensive nationwide coverage of the market ± urban, semi-


urban and rural areas. They have quite a number of brands, covering all
segments and filling all gaps. For example, they have brands in
different price slots like Utsav for rural lower-end markets and
Apcolite for high end-markets;

3. ASIAN PAINTs logo Gattu, an impish boy with the paint tin and
brush, is most popular and easily recognized;

4. Widest product range in terms of products, shades, pack sizes - 40


different decorative, some in 150 shades, 8 different pack sizes;

5. Unlike its competitors who concentrate only in urban areas, AP is


found everywhere. It has a country wide distribution

6. A network of 13,000 dealers spread all over the country. The nearest
competitor has less than 8,000. For this, they have large network of
regional offices and company depots and sales personnel to service the
nationwide dealer network;
7. Strong in inventory control. APs average inventory level is 28 days
sales against 51 days for the industry. AP has 45% edge in inventory
carrying costs;

8. The pricing strategy is oriented to middle/lower end consumers;

9. AP is quite strong in production-marketing coordination. Their


policy of offering tailor-made products to suit customer need has
resulted in an ever growing product range;

10. In-house production, no outsourcing, high reliability in suppliers,


superior in quality assurance;

11. Leader in profit and operating margins, ROI of AP is 40% while


ROI of the rest of the industry is 22%, Net worth of Rs 204 crores
against Rs 58 crores of Good lass Nerolac and Rs 41 crores of Berger.

12. High caliber human resource, employs maximum number of


MBAs, as a proportion to total number of employees;

13. Corporate reputation has been a major strength for AP. The image
is that of a successful and well-managed company. They have won
many accolades and awards.
For example, 1995 Corporate Excellence Award from HBSA and ET,
IDBI study rated ASIAN PAINT as one of India’s most excellent
companies; another study rated ASIAN PAINT among top 5
paint manufacturers in the world. They have an enviable track record
in breaking the position of MNCs in the Indian paint industry.

Weaknesses:

1. In industrial paints, AP has only a 15% market share. It is far behind


the Leader Good lass Nerolac, which has a market share of 43%. Since
this is going to be the major growth segment in the future, a lag in this
segment will end up as a major weakness;

2. Widening product mix puts strain on production distribution,


accounting and administration;

3. Innovation in developing new products is adequate;

4. ASIAN PAINT has a major weakness on the technology front in


industrial paints. Most paint firms have technology tie-ups with
manufacturers abroad. For example, Good lass Nerolac has a tie-up
with Kansai paints, which has provided the company with Cathodic
Electro Deposition (CED) technology. Since Kansai is the supplier to
Suzuki, Japan, Good lass with its Kansai connection finds it easy to tap
Maruti in India. AP has not been able to make any significant advances
either with Maruti or the auto segment in general. Berger has a
technical tie up with Her bets, Germany, for automotive paints, Valspar
Corp, USA for heavy-duty coatings and Theodor NV,Holland for
powder coatings;

5. Ever expanding product mix throws some strain on inventory


management;

6. Seasonal demand and hence in off seasons it can lead to cash flow
problems;

7. No tie up with foreign manufactures. Through it has a unit in several


Countries

Opportunities:

1. Acquiring/ increasing market share in Industrial paint sector.

2. Developing market in automobile industry, which accounts for 50%


of Industrial paint market.

3. AP has always enchased on opportunities that have come its way. It


has maintained a product profile keeping the market trends in picture.
It shifted to a pre dominance in industrial paints than industrial paints
than in decorative paints as was evident from the production figures of
1995-96;

4. The automobile industry accounted for 50% of the industrial paint


market.

Threats:

1. Domination of few foreign companies;

2. Since both Good lass Nerolac (43%) and Berger (14%) have a
higher market share than ASIAN PAINTs (14%), it is possible that in
the future, they may capture the entire industrial paint market;

3. Competitors have gone in for hi-tech with insta color spot mixing.
For Example, J&Ns insta colour offers 626 shades;

4. Automated paint blending in retail points already there. ICIs Touch


Color and Berger’s Color Bank are indicative of this;

5. Competition is catching up fast, hi-tech facilities gives abundant


choices. The study of this SWOT analysis shows that the strengths and
opportunities far outweigh weaknesses and threats. Strengths and
opportunities are fundamental and weaknesses and threats are
transitory. Any investment idea can do well only when you have three
essential ingredients: entrepreneurship (the ability to take risks),
innovative approach (in product lines and marketing) and values (of
quality/ethics). Benjamin Franklin discovered electricity, but it was the
man who invented the meter that really made the money.