Analysis of Business Strategy

Asian Paints
Presentation Path
 OBJECTIVE

•To Provide the business strategy

for Asian paints
•To compare the same with other
competitors for India centric
business.
 OVERVIEW: ASIAN PAINTS
BRAND LEADERSHIP
MODEL:ASIAN PAINTS
• India's largest paint company
a) 1942-1967: Evolution Phase
• One of the top ten decorative coatings
b) 1967-1982: Extension and companies in the world.
Consolidation Phase
• Started by four entrepreneurs,
c) 1982-1986:The years of
Champaklal Choksey, Chimanlal
Excellence Choksi, Suryakant Dani and Arvind
Vakil
d) 1987-1997:Moving Closer to
the Consumer
• Turnover: INR 0.35 million(1945) to
54.3 million(2009)
e) 1997-1999: Changing rules of • PM Murthy( MD & CEO)
the game

f) 1999- 2007: The new Asian

Paints
 Industry Analysis: Porters 5 force Model
Substitutes
1.White cement
2.White wash
3. Brick & stone Structure

BUYERS Suppliers
1. Decorative: Fragmented Existing Rivals
1.Tio2 Imported,
Market. LOW POWER 1. Berger
2.Few suppliers,
2. Industrial: Low switching 2. GN
costs. Corporate have 3.Availability of
3. ICI Substitutes of RM Low
HIGH POWER
4. JNPL HIGH BARGAINING
POWER

Threat Of New Entrant

1.Growth rate much higher than global so global
player may be interested
2. Huge potential to increase per capita consumption.
Thus Latent need exists.
3. Companies can erode into APIL’s industrial market
by forming JV’s.
 Market Share
Company Industrial Market Decorative Market

APIL 14.50% 37.50%

GNPL 42.50% 10%

Berger Paints 14.20% 11.20%

ICI 7.80% 7.80%

Jenson & Nicholson 8.10% 5.50%

Others 12.90% 38%

Identification Of Focus Area of Competitor

APIL GNPL BPIL ICI JNIL SPIL SNIL

•Focus on • Provide • Increase • Increase • Leverage on • Consolidate • Consolidate
decorative paint shop focus on capacities to JV for growth position in position in
Paints and management southern strengthen in Industrial architectural Repainting
complete services to markets in presence in segments paints exterior
vacant slots in sell solutions India fast growing paint market
product range rather than architectural
• Gain Market product segments
share in auto
OEM through
JV
 Entry of Global Players in Paint Industry:
Recent JV agreements
Company Collaborator Purpose

Asian Paints  Nippon Paints Pre treatment chemicals, Coil & Powder
 PPG Industries coating
 Sigma Coatings Automotive paints
 BASF High performance coating
Can coating
GNP  Kansai Paints Auto & Industrial coating
 Nihon Tokushu Auto coating
Berger  Herberts Auto coating
 Valspar Corp. Heavy duty coating
 Teodur Powder coating
J&N  Tikkurila Decoratives
 Herberts Auto refinish
 Chugoku Marine
Rajdoot  Becker Coil coating

Shalimar  Salphi Marine coating

 W.R.Grace Can Coating & metal packaging
ICI India  ICI Auto refinish
 Overall Corporate Strategy: Asian Paints

DISCOVER
Exploit new markets by DEVELOP
NEW creating products /services
Build new competency to Create the
by leveraging Future
existing competencies
differently

MARKET
OPPORTUNITIES

DEFEND DEEPEN

EXISTING Build Complementary/new

Defend existing market by
strengthening existing competencies 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.
 Business Strategy: Asian Paints
• AP has acquired short-term competitive advantages by using
its distribution strength and logistical efficiency in order to
raise the Cost of doing business for all its competitors to attain
this advantage.
• The advantage is short-lived and ultimately imitable.
• Moreover, AP has established such an extensive network that
getting incremental advantage would be very difficult.
• Futuristic approach should be gaining competitive advantage
through channel control or occupying mind space.
Business Industry is characterized by the presence of intermediaries who have a

Strategy: 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
Urban Market 1.
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.
2. 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.
3. 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.
Business Strategy:
Rural Market

• Rural segment not mature enough to appreciate

service related offerings
• Strategy should be product related.
• Customer up gradation strategy should be
adopted. It should be Implemented in two parts.
1. The penetration of the rural segment have to be
achieved by offering a basic product well tailored
to match the low willingness to pay of the rural
consumer.
2. After basic penetration levels have been achieved
the rural consumer can be offered a “higher ”
range of products with a view to up grading the
consumers.
Business Strategy:
International
Markets

• For the newly Acquired Global Companise

Utilization of the learning curve effect and the
knowledge base from having functioned in a
developing country would be the most crucial
factor for growth.
• AP can hasten the process of market growth and
maturity in these regions by leveraging on its
experience and launching newer products at a
faster rate.