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Mohammad Nazri Bin Sazali (G9) Date: 8 March 2012

Asian Paints Internationalization Strategy Asian Paints is a company that undertakes its operations in more than seven countries in the world, and in all these countries, Asian Paints is the biggest paint company. In light of increased competition and the need to remain top in its operations, Asian Paints developed an internationalization strategy, which is its business strategy. It has done very well in India and this made them target other countries and they ended up raking large amounts of income from their activities in these countries. Their internationalization strategy involved acquisition. This involved the inclusion of other color-world related activities such as interior design and provision of other services such as painting in their package. This helped them in taking over the entire chain from production of paint products to the delivery services. This is how they the company gained popularity in most of these countries. The strategy also involved extensive advertising of their products and many product related campaigns such as reminding their customers to always repaint their houses and giving them the advantages of constantly repainting their houses and other structure. 1 The strategy, also involved mitigating logistical efficiencies that made carrying out of their business less costly to them and more costly to their competitors. Through its many branches, the company is able to achieve a huge distribution power due to the economies of scale involved in production of commodities in large quantities. Given the companys presence in many countries the company does not target expansion geographically, but will work towards of improving the efficiency of the existing holdings and evaluating them such that the ones that produces poor results over the years can be improved or closed up all the same if it cannot produces better results. Over the years it has been discovered that there is always a presence of intermediaries who control most of the operations of the market and have a great influence on the actions of customers. This prompts the company to either develop a close relationship with these

Carnegie, D. 1936, How to Win Friends and Influence People, Simon & Schuster, New York Fernandez, Z., & Nieto, M. J. (2005). Internationalization Strategy of Small and Medium Sized Family Businesses: Some Influential Factors. Family Business Review, 18(1), 77-89.

intermediaries or acquire a part of the intermediary and try to outsmart the other intermediaries to obtain a cutting edge in the market. Recommendations There has been a certain trend in economic and financial affairs whereby persistent swings are the new order of the day. This is what is termed as the new normal. Hence new normal economy comprise of slower economic growth, lower returns, higher unemployment and persistent inflation.2 In light of this phenomenon, for the company to sustain this strategy, Asian Paints will need to utilize the learning curve effect to maximize productivity. The company should also learn about the knowledge base in these countries. This will be enhanced by their experience from carrying out their operations in many countries especially in the developing countries. The company can also improve on the process of market growth. This will help them in establishing strong grounds for business.3 This can be done by leveraging on the companys experience and thereby produce better products. Additionally, by adopting transnational strategy, they will combine the benefits of global-scale efficiencies with the benefits of local responsiveness. These products should also be produced at a faster rate so that they are always available to the customers. The company should also work on upgrading the customers by giving them upgraded products. This way the customer will not have an option but to purchase the available products. These products should also be well tailored to just satisfy the customers basic needs and at the same time cater for the customers willingness to acquire the product especially those customers in remote areas that are not able to access the urban areas to buy the companys products. This should be a short term solution before the company finally achieves substantial penetration. This is the time that they can now offer the rural customer a higher range of their products so as to achieve upgrading of the customers.

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Prof Charles Chow (2012). Strategy MGMT102. Lesson 1 Slide 23

Melin, L. (1992). Internationalization as a Strategy Process. Strategic Management Journal 13(2), 99-118. John Wiley & Sons.