ASIAN PAINTS

BUSINESS STRATEGY ANALYSIS

CLEAR GOALS FOR A

CLEAR FUTURE

Founder of Asian Paints

Champaklal H. Choksey
Chimanlal N. Choksi

GENESIS OF PAINT INDUSTRY

First paint Industry Shalimar Paints, Colour & Varnish
Company,
The paints was generally imported from the Britain
Due the 2nd world war many company entered in India
like Goodlass Wall(1918), Elephant Oil Mills (1917)
Asian Paints & Kansai Nerolac came into picture after
the post independence
Paints were considered as a luxury item
Low used in Industrial segments
There was a negative growth in industry and price was
elastic
Introduction of liberalization policy

 Demand for auto paints shot up suddenly

Rapid industrialization aided by Governments
liberal policies resulted the growth of the
paint industry

NATURE OF INDUSTRY

Indian Paint industry, estimated to be

a Rs.21,000 Cr. industry, growing at a
rate of above 15% for the past few
years.

 Factors responsible for the

growth
Increasing level of income and
education
Increasing Urbanization
Increasing share of organized sector
Development of the Realty, Automobile
and Infrastructure sector
Increasing Penetration in the Rural
Markets

Indian Paint Industry

Decorative
Paints(7O%)

Premium Range
(High end
Acrylic
Emulsions)

Metros
&
Large Cites

Industrial
Paints(30%)

Medium Range
(Enamel Paints

Distemper
Range( Low end
Paints)

Small Cities

Sub - urban
&
Rural Areas

Domestic market
Decorative 70% industrial 30%.
Globally market
Decorative 50% industrial 50%.

Automobile
Sector (about
rd share)
2/3rd

Consumer
Durables
Marines Paints
Other OEM's

GENESIS OF ASIAN PAINTS

1990- Present

1967-1985
1942-1965
Company
stated its
business
the
mischievous
kid was born
Name was

India's
leading paint
company
Converted
into a public
limited
company
Entered into
a

Spreads it
boundary
Completed 70
years
5th largest
decorative
paint company
in the world
Admired
companies in
India
Market leader
of paint

PESTEL ANALYSIS
POLITICAL FACTORS
India, the largest democracy in the world

The government is federal republic

The political situation is more or less stable in nature
Export oriented Economy

ECONOMIC FACTORS

Market based economy

Second fastest growing economy in the world
India is the third largest in term of purchasing power
Inflation rate is 6.62 as on January 2013
Introduction of FDI in few sectors

SOCIAL FACTORS
India is the second largest populated economy in
the world
Rise in price of raw material
Import of raw material

TECHNOLOGICAL FACTORS
Emerging of IT sector
Modernization of paint like (waterproof paints,
Teflon coating, creating colours shops etc.)
Lead free paints

ENVIRONMENTAL FACTORS
Impact of volatile organic compounds (VOCs)
Lead free paints
Season and climate changes

LEGAL FACTORS

Pollution Control Law

Consumer Law
Health and Safety Law
Environmental Law

PORTERS 5 FORCES ANALYSIS

BARGAINING POWER OF BUYERS

Household users The contractors : Higher bargaining power &
more price sensitive
The end customer : Number of options are
available Decisions are made based many
factors

Industrial users A low margin high revenue business

The buyers knowledgeable
Price comparison is done effectively by the
consumers

BARGAINING POWER OF SUPPLIERS

Raw material intensive industry
More than 300 products required to
manufacture of the final products
Many Categories

Pigments additives
Solvents
Binder etc.

Pigments constitute about 1/3rd of the total raw

material costs. Titanium dioxide is one key
pigments which is facing a global shortage
supply.

COMPETITIVE RIVALRY
About 80% of the organized market is
catered by the top four players of the
industry.
The current market growth rate provide
ample room for all the players of the
industry to flourish.
Competition may increase as the
market gets saturated.
The presence of the unorganized
market
does
provide
room
for
competition

AVAILABILITY OF SUBSTITUTES
Lime wash is conventionally used substitute
for paints.
In decorative paints segments an alternative
option is wallpapers.

THREAT OF NEW ENTRANTS

The paint industry in India is dominated by
few players making difficult for anyone new
entering the industry
Establish foreign players may pose a threat
by virtue of the knowledge and expertise

PRODUCT PORTFOLIO

Ancillari
es

Decorati
ve
paints

Industria
l Paints

Automobi
le

BCG MATRIX
STARS
Metal/industrial
Paints
Wood finishes
(varnish, polish)
CASH COW
Wall Paints(INTERIOR
& EXTERIOR PAINTS)
DECORATIVE PAINTS

QUESTION MARKS
Distemper
Range( Low end
Paints)

DOGS
Marine paints,
Automobile paints &
others(back board
paints)

SITUATION AUDIT
India's largest paint company and
Asia's third largest paint company
Operates in 17 countries and has 24
paint manufacturing facilities in the
world servicing consumers in over 65
countries.
Operates around the world through its
subsidiaries Berger International
Limited, Apco Coatings, SCIB Paints
and Taubmans

COMPETITIVE ANALYSIS

MARKET SHARE

10%

7% 0% 0%

Asian Paints
Berger Paints

11%
71%

Kansai Nerolac
Akzo Nobel
Shalimar Paints
Jenson Nicolso

 Industrial
business
performing
below par
Hiccups in
internationa
l business
Internationa
l presence
restricted to
small
pockets

Fast growing
Indian
economy
Shorter
repainting
cycles
Growth in th
tier II and III
towns
Steady
growth in
industry
volumes
Decrease in
the use of

Opportunities

Market leader
Capacity
expansion
plans
Pricing power
Wide
distribution
network

Weaknesses

Strengths

SWOT ANALYSIS

CURRENT ISSUES

Market leader at present.

Overall condition of the company is quite stable.
Requires a lot of raw materials for its production ,
European crisis resulting the prices of the raw
materials have increased considerably.

Solution:
Company can try to utilize the domestically
available materials to cut down on the extra
manufacturing cost.

CONCLUSION
Asian Paints, Indias largest paint company and Asias
third largest paint company, with a turnover of Rs 96.32
billion.
Have an enviable reputation in the corporate world for
professionalism, fast track growth, and building
shareholder equity.
Over the course of 25 years Asian Paints became a
corporate force and India's leading paints company. Driven
by its strong consumer-focus and innovative spirit, the
company has been the market leader in paints since 1968 .