Table of Contents

Introduction .......................................................................................................................... 6
About the company ............................................................................................................... 7
Mission ............................................................................................................................... 10
Vision ................................................................................................................................. 10
Why have we chosen this company ..................................................................................... 10
Which Industry it Belongs to ............................................................................................... 11
Industry Analysis ................................................................................................................ 12
Stages in industry life cycle ............................................................................................. 12
Industry Structure ............................................................................................................ 16
Controlling force for the profitability and industry profitability ....................................... 17
PESTLE .......................................................................................................................... 18
Political Analysis: ........................................................................................................... 18
Economic Analysis:......................................................................................................... 18
Social Analysis:............................................................................................................... 19
Technological Analysis: .................................................................................................. 19
Legal Analysis: ............................................................................................................... 20
Environmental Analysis: ................................................................................................. 20
Summary......................................................................................................................... 21
Porters 5 Forces .................................................................................................................. 22
Threat of New Entrants- High (Unfavorable) ................................................................... 22
Bargaining Power of Buyers- Moderate (Favorable) ........................................................ 23
Competitive Rivalry within the Industry- Very High (Unfavorable)................................. 23
Threat of Substitute Services- Low (Favorable) ............................................................... 24
Bargaining Power of Suppliers- Low (Favorable) ............................................................ 24
How macro environment is affecting the PORTERS five? ................................................. 25

Political and legal forces: ................................................................................................ 26

Demographic forces: ....................................................................................................... 26
Technological forces: ...................................................................................................... 26
Global forces: .................................................................................................................. 27
Social forces: ................................................................................................................... 27
3 I analysis: ......................................................................................................................... 27
Immediate competitors: ................................................................................................... 27
Impending competitors: ................................................................................................... 28
Invisible competitors: ...................................................................................................... 28
SWOT Analysis. ................................................................................................................. 29
Strengths ......................................................................................................................... 32
Weakness ........................................................................................................................ 32
Opportunities .................................................................................................................. 32
Threats ............................................................................................................................ 32
Key Partners: ...................................................................................................................... 34
Key Activities: .................................................................................................................... 35
Key Resources: ................................................................................................................... 35
Value Proposition:............................................................................................................... 35
Customer relationships: ....................................................................................................... 36
Channels: ............................................................................................................................ 36
Customer segments: ............................................................................................................ 37
Cost Structure: .................................................................................................................... 38
Revenue Stream: ................................................................................................................. 38
Core Competencies of Berger .............................................................................................. 39
Corporate level strategy....................................................................................................... 41
Mission ........................................................................................................................... 41
Ultimate objective ........................................................................................................... 41

Vertical Integration ......................................................................................................... 41

Backward Integration ...................................................................................................... 41
Forward Integration ......................................................................................................... 41
Different Tools is using for forward integration strategy .................................................. 42
Diversification- Related Diversification Strategy................................................................. 42
Related operation level strategy ....................................................................................... 42
Related management level strategy .................................................................................. 43
Strategic Alliances .............................................................................................................. 43
Strategic Outsourcing .......................................................................................................... 43
Corporate level strategies of Berger paint Bangladesh LTD and its mission- The relationship
........................................................................................................................................... 44
Business Level Strategy ...................................................................................................... 45
Who will be served? ........................................................................................................ 45
What needs to be satisfied?.............................................................................................. 45
How those needs to be satisfied? ..................................................................................... 45
The Value Creation Frontier ................................................................................................ 47
ANSOFF Matrix................................................................................................................ 49
BCG Matrix....................................................................................................................... 50
Functional Level Strategy ................................................................................................. 51
4 building blocks of Berger Bangladesh .............................................................................. 52

Superior Efficiency................................................................................................... 52

Superior Quality ....................................................................................................... 52

Innovation ................................................................................................................ 52

Superior Customer Responsiveness .......................................................................... 52

Linking the resources, core competency, capabilities with functional level strategy for value
creation ............................................................................................................................... 53
Division and departments of Berger .................................................................................... 54

Marketing Strategy: ............................................................................................................. 55

Marketing Mix .................................................................................................................... 56
Product:........................................................................................................................... 56
Price: ............................................................................................................................... 57
Promotion: ...................................................................................................................... 57
Places/ Distribution ......................................................................................................... 58
People ............................................................................................................................. 59
Process ............................................................................................................................ 60
Finance Division ................................................................................................................. 61
Human resource management.............................................................................................. 62
Things Berger does to attract Top Quality Management .............................................. 62
Company Structure and Control System .............................................................................. 66
Division & Departments: ................................................................................................. 66
a. Marketing department ........................................................................................... 66
b.

Sales department ............................................................................................... 67

c. Finance Department .............................................................................................. 67

d.

Planning and Materials Department ................................................................... 68

e. R&D department: .................................................................................................. 68

f.

Production Department ......................................................................................... 68

g.

FG Planning Department (Distribution): ............................................................ 69

Top Management ............................................................................................................ 69

Finance ........................................................................................................................ 70
Supply chain................................................................................................................ 71
GM Manufacturing & Projects .................................................................................... 71
Human Resource & Administration ............................................................................. 72
Research and Development ......................................................................................... 72
Marketing .................................................................................................................... 73

Corporate Governance......................................................................................................... 74
Board of Directors ........................................................................................................... 74
Shareholders: .................................................................................................................. 75
Internal and External auditor: .......................................................................................... 75
Control Structure and Control System ................................................................................. 76
Control System ................................................................................................................... 77
Personal control............................................................................................................... 77
Output control ................................................................................................................. 77
Behavior Control ............................................................................................................. 77
Value chain analysis ............................................................................................................ 78
Strategic Analysis (4P) ........................................................................................................ 81
Position ........................................................................................................................... 81
Priorities.......................................................................................................................... 81
Payments ......................................................................................................................... 81
Performance .................................................................................................................... 82
SWOT Analysis .................................................................................................................. 83
Strength:.......................................................................................................................... 83
Weakness: ....................................................................................................................... 83
Opportunities: ................................................................................................................. 83
Threats: ........................................................................................................................... 84
Recommendation ................................................................................................................ 86
Conclusion .......................................................................................................................... 87
References .......................................................................................................................... 88

Introduction
The paint industry of Bangladesh is a growing industry. The inception of this started years
before the liberation. However, since then gradually several companies have grown locally
and several foreign companies have started their operations in this sector. Though the market
comprises of several companies, only a few players Berger, Asian, Roxy, Pailac, Aqua and
Elite etc. are operating in the market with over 90 percent market share.
A study ranging back from 2010 shows that Berger alone holds 48 percent market share,
followed by Asian Paints 12 percent, Elite 10 percent, Pailac and Aqua each 7 percent and
Elite Paints 5 percent. Ujala and Navana paints are also in the market. (2014 annual report
from the Berger Paint Bangladesh Ltd. Retrieved from
http://www.Bergerbd.com/images/corporate_info/Quarterly3_14.pdf)
The growth proximities of the industry was very high. Berger being the market leader grew
by 25 percent in 2008 where as Asian Paints within entering the industry had a growth of
almost 50 percent. This possibility of growth and business has given hope to companies to
start their operations in Bangladesh, due to which several other foreign companies are
viewing Bangladesh for their next venture. (2013 annual report from the Berger Paint
Bangladesh Ltd. Retrieved from
http://www.Bergerbd.com/images/corporate_info/Quarterly3_14.pdf)

The local housing industry is the base for the paint industry. However, after 2010 this
industry has fallen and had widely affected the paint industry as well. However, despite the
political instability and economic problems Berger grew 15.58 percent last year, may do well
this year, despite internal and external obstacles. (2014 annual report from the Berger Paint
Bangladesh Ltd. Retrieved from
http://www.Bergerbd.com/images/corporate_info/Quarterly3_14.pdf)
The paint industry now a day is expanding beyond the border of the housing industry.
Shipbuilding and automobile industries also consumed a good amount of paints and there is
still hope for various expansions.

The key products that hold the major market shares in this industry are: plastic emulsion,
distemper, outer coat (weather proof), synthetic enamel etc.Plastic emulsion and distemper
are close substitute of each other. Emulsion is basically used in high-end residence all over
the country and distempers are economy class products having a demand in semi-urban and
rural markets. Weather coat is growing very fast and presently hold 20 percent market share.

About the company

Louis Berger, a German national, founded dye and pigment making business in England in
1760. Louis Berger & Sons Limited grew rapidly with a strong reputation for innovation and
entrepreneurship, culminating in perfecting the process of making Prussian Blue, a deep blue
dye a color widely used for the uniforms of many European armies. Production of dyes and
pigments evolved into production of paints and coatings, which till today, remains the core
business of Berger. The company grew rapidly by establishing branches all over the world
and through mergers and acquisitions with other leading paint and coating manufacturing
companies.(Retrieved from http://www.Bergerbd.com/)
Berger has been involved in the paint business in this part of the world since 1950, when
paints were first imported from Berger UK and subsequently, from Berger Pakistan. In 1970,
Berger Paints Bangladesh Limited (BPBL), erstwhile Jenson & Nicholson, had set up its
paint factory in Chittagong. The shareholders were Jenson & Nicholson (J & N), Duncan
Macneil& Co. Limited and Dada Group. Duncan Macneil subsequently sold their shares to
the majority shareholder J & N Group. The Dada Groups share was ultimately vested with
the Government of the Peoples Republic of Bangladesh after the independence of the
country in 1971. The name of the company was changed from J & N (Bangladesh) Limited to
Berger Paints Bangladesh Limited on January 1, 1980. In August 2000, J & N Investment
(Asia) Limited purchased the Government shareholding. In December 2005, the company
issued 5% shares to the public and listed with Dhaka Stock Exchange (DSE) and Chittagong
Stock Exchange (CSE). (2014 annual report from the Berger Paint Bangladesh Ltd. Retrieved
from http://www.Bergerbd.com/images/corporate_info/Quarterly3_14.pdf)

With the entry of Berger Paints into the Bangladesh market, the country has been able to
benefit from more than 250 years of global paint industry experience. Over the decades,

Berger has evolved to become the leading paint solutions provider in this country and has
diversified into every sphere of the industry from Decorative Paints to Industrial, Marine
and Powder Coatings. Berger has invested more in technology and Research & Development
(R&D) than any other manufacturer in this market. It sources raw materials from some of the
best known names in the world: MITSUI, MOBIL, DUPONT and BASF, to name a few. The
superior quality of Bergers products has been possible because of its advanced plants and
strict quality controls equal to the best international standards. Investment in technology and
plant capacity is even more evident from the establishment of Powder Coating and Emulsion
plants at the Dhaka factory. The state-of-the-art Dhaka factory is an addition to Bergers
capacity, making it the paint giant in Bangladesh. (Current research in Berger Bangladesh
Ltd, 6, 124-133 retrieved from http://www.assignmentpoint.com/business/internship-reporton-marketing-strategies-of-Berger-paints-bangladesh-limited.html)
With its strong distribution network, Berger has reached almost every corner of Bangladesh.
The nationwide dealer network, supported by nine sales depots strategically located at Dhaka,
Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Comilla, Mymensingh and Barisal has enabled
them

to

strategically

cater

to

all

parts

of

the

country.

(Retrieved

from

http://www.Bergerbd.com/)
The product range includes specialized outdoor paints to protect against adverse weather
conditions, Color Bank, Superior Marine Paints, Textured Coatings, Heat Resistant Paints,
Roofing Compounds, Epoxies and Powder Coatings. In each of these product categories,
Berger has been the pioneer. Berger also provides customer support; connecting consumers to
technology through specialized Home Decor service; giving free technical advice on surface
preparation, color consultancy, special color schemes etc. To bolster customer satisfaction,
Berger launched Breathe Easy- the first odorless paint solution in Bangladesh. The company
also maintained Innova Wood Coating, Power Bond adhesive and TexBond textile chemicals
to cater to the needs of the customers.
As part of the companys endeavor for excellence and better service, Berger has expanded its
operations to manufacture coil coatings through its joint venture with Becker Industrial
Coatings Holding AB, Sweden named- Berger Becker Bangladesh Limited.
Apart from business, being a responsible corporate citizen, Berger Paints Bangladesh Limited
has been promoting the young and creative talents of the country through Berger Young
Painters Art Competition (BYPAC), Berger Award for Excellence in Architecture (BAEA),

Berger Awards Programme for Students,

Berger Awards Programme for Students of

Architecture of BUET (BASAB), Khulna University Architecture Department-Berger

(KUAD-BERGER) Award etc. Berger Paints has added another dimension to its social
responsibilities by contributing to the wellbeing of autistic children in Bangladesh since
2009.

(Current

research

in

Berger

Bangladesh

Ltd.

Retrieved

from

http://www.assignmentpoint.com/business/marketing-business/customers-satisfaction-ofBerger-paints-bangladesh-ltd.html)

Mission
By their years of R&D, various products and large customer base the mission of Berger
standsWe shall increase our turnover by 100 percent in every five years. We shall remain socially
committed ethical company. (Retrieved from http://www.Bergerbd.com/)

Vision
The ultimate target of Berger is To be the most preferred brand in the industry ensuring
consumer delight.(Retrieved from http://www.Bergerbd.com/)

Why have we chosen this company

Berger is one of the leading companies worldwide and is the market leader of paint industry
in Bangladesh. With various ranges of products and services Berger has captured the market
in various phases and has strategically managed those for years, which helped them in their
endeavors despite the challenge from emerging competitors.
Berger serves a massive segment of the market with various products like plastic emulsion,
distemper, outer coat (weather proof), synthetic enamel etc. They have effectively set their
strategies due to which they are able to perform their operations smoothly both in urban and
rural areas of Bangladesh.
We have chosen this company because we wanted to study how Berger managed its core
competencies for being the leading paint manufacturer in Bangladesh as well as its
contribution in shaping the industry. Moreover, we also wanted to find out what strategies
Berger used to sustain in the challenging business environment as well as the competitive
industry.

Which Industry it Belongs to

Berger belongs in the paint industry. It is part of the countries infrastructural system and aims
to provide various types of painting solutions to different categories of customers. With
effective and efficient research and development Berger has created innovative products and
has leaded the market for a long time. They have set perfect strategies for their operations in
order to thrive in success.
The yet growing paint industry in Bangladesh is highly influenced by the construction
industry thus; the current downfall in the construction sector is slowing down the growth of
the paint industry. However, despite the crisis the major companies like Berger and Asian
Paints have experienced positive growth. This factor makes the industry a lucrative one for
future investors.
The use of paint or to say more clearly the horizon of the paint industry in Bangladesh is
expanding very fast. The demand of paint has already increased widely for general uses in
both urban and rural areas. However, industrial uses of paint have also widened the prospect
for the companies in the industry.
Despite dozens of companies operating in the industry, 90 percent of the market is controlled
byBerger, Asian Paints, Roxy, Pailac, Aqua and Elite. The industry poses huge potential for
growth as well as fierce competition for the companies.

Industry Analysis
Stages in industry life cycle
In order to perform industry life cycle analysis first the current nature of the industry needs to
be assessed with a predetermined benchmark or model. One of the most frequently used
models of a life cycle of an industry or a product was presented in 1980 by Michael Porter.
The appropriate use of specific business strategies highly depends on the phase of the life
cycle of the industry in which the firm and/or its parts operate.
According to Andrija Sabol, the type, intensity and direction of development of the
relationship of internal and external environment define how the firm achieves goals set forth
by the chosen strategy of the firm. Therefore, it is of great importance to understand the
concept of life cycle, which connects business (especially strategic) decision making with the
development of the outer complexity of the firm.
Industry research has always played a vital role for any company inside the relevant industry
since its (industry) properties and power determine or explain the competitive struggle and
rivalry among the components. Moreover, the structure of an industry affects the rules and
nature of the competition and thus helps to figure out the necessary strategy for survival and
development.
The significant phases of a cycle are: Introduction, Growth, Shakeout, Maturity and Decline.
These phases distinguish each other on strategic and operational traits such as technology,
products, manufacturing and distribution, competition, demand, key success factors etc.
The paint and coating industry clearly does not fall under introduction phase. Structural
elements that characterize this phase are: 1) technological and strategic uncertainty; 2) high
initial (entry) costs; 3) newly established firms entering the industry; 4) customers who are
buying for the first time (early adopters); 5) short duration of the phase; 6) subsidies to
businesses.

Apart from number two and three which are related to high initial cost and emerging business
entity; other elements do not support the current standing of Bangladesh Paint and Coating
industry. To illustrate, the products offered by the companies are in most cases already used
by the consumers; hence they are not early adopters. No such rapid product innovation or

specialized distribution channel are present in the current industry trend. Below is given a
chart on traits of two major phases of industry life cycle, Growth and Maturity:
Growth stage

Maturity Stage

Paint and Coating Industry

The size of the market is still
increasing and no way it can be

Demand

categorized

as

saturated

market. In addition to that

Market penetration strategy can
be seen among the companies
which strongly indicate the
Rapidly increasing market

Mass

market, industry

penetration

replacement/repeat

buying.

within

the

growth

phase.

Customers knowledgeable and

price sensitive

On the other hand, the industry

has not yet been significantly a
price sensitive one. Neither the
industry has experienced the
transition from period of high
growth to a more modest growth
level.

With the evolution of new

technologies the cost of the

Technology

product is reduced and quality is

Standardization

around Well-diffused

dominant technology, rapid knowhow:

process innovation

technical improving,
quest

technological improvements

for

demand

is

increasing, and the

Industry is growing with their
entry which is a sign of Growth
phase.

Quest

for

technological

improvement is there but its not

occurring on a higher degree.

The room for improving the

design and quality is still there.

Products
Design

and

quality Trend

improve,

emergence

to

commoditization.

of Attempts to differentiate by However, not too much effort

dominant design

branding, quality, bundling

has been put so far in order to

differentiate the existing brands
in the industry.

The current industry is already

Manufacturing

Mass

production, Emergence of overcapacity,

and

competition for distribution

experiencing

transition

deskilling of production, long towards mass production on the

production runs, distributors available products. Competition

distribution

carry fewer lines

inside the distribution channel is

applicable among the dealers
assigned in specific regions.

Market Leader strategy

Cost

leadership

Focus Strategy

Strategy

Strategy,

Companies like Berger Paints

Bangladesh

Ltd.

inside

the

industry clearly approaching the

Formulation

market
rather

leadership
than

cost

strategy
leadership

strategy.
Entry, mergers and exits
Competition

Shakeout, price competition Scope for Entry, mergers for the

increase

emergent companies exists.

Whereas the price competition

is not yet extremely sensitive.

Table: The evolution of industry structure and competition over the life cycle.

Based on the above discussion regarding the traits that differentiate growth and mature phase;
it can be concluded that the industry is currently in the Growth phase of its lifecycle inside
the country. For example, Berger Paints Bangladesh Ltd. is still approaching the market
leadership strategy instead of focusing on cost leadership or pricing strategy. Firm that chose
the cost leadership strategy aims to lower its production costs by implementing cost reduction
through experience, constant cost control, cost reduction in the areas of research and
development, advertising, promotion, etc. Here in this example, this firm (Berger Paints) has
the largest market share, which allows it to press and/or instigate other firms to change their
prices, introduce new products or intensify promotion. Position of a market leader represents
a kind of orientation point or benchmark for competitors, one which they should challenge,
imitate or perhaps avoid. These are traits fall under the growth phase of an industry.
Apart from the strategy formulation, the demand traits also show that the industry is
experiencing a Growth pattern. Particularly since there is no sign of market saturation among
the competitors it will not be wise to classify under mature phase.

Industry Structure

Perfect
Competetion

Monopolistic
Competetion

Oligopoly

Monopoly

Figure: Industry Structure

Perfect Competition: The current paint and coating industry structure falls under perfect
competition traits. There are many buyers and quite a good number of sellers, and since the
products are very similar in nature, there is little competition as the buyers needs could be
satisfied by the products sold by any seller in the market place. There exist many seller with
homogenise product(Berger Paints, Elite Paint, Asian Paints, RAK paint, Roxy Paint
etc.).The independent act by both buyers and sellers is a significant nature of Bangladesh
Paint and Coating Industry. Although there are many buyers in the market they cannot
control the prices because of the availability of several number of paint companies.
Consumers are price takers. The prices are set through the price mechanism. Most of the
companies have similar product with a competitive price. There are currently no strong
barriers to entry and or to exit from the industry. On the other hand, in an oligopolistic
market, the product sold is more complex and requires large capital, technology, legal and
equipment which make it difficult for new players to penetrate. But here in this Painting and
Coating Industry firms are free to enter or exit the market at their discretion (RAK entered in

the industry 2 years back and Deluxe is running their business as a new company and Akzo
Nobel is planning to enter into the industry). There is no preference given to any firm by
government or anybody. All firms have been equally treated till now.

Controlling force for the profitability and industry profitability

Controlling forces for profitability for the painting and coating industry in Bangladesh are:

Growth of construction industry

Customer satisfaction

Production efficiency

Cost Efficiency

Government rules and regulation

Innovative products and service

Moreover the profitability of the industry also includes major factors like,

Growth of the country as well as market

Customer demand

Role of suppliers

Technological Advancement

PESTLE
Political Analysis:
Political factor has a Moderate effect on the industry.

The political sector of Bangladesh since liberation has been going from various ups and
downs. With new governments the country went through several molds but, could not
become stable yet. For the past two tenures the Bangladesh has been going through massive
political pressure. Like all other business sectors the business operations of the paint industry
have been a bit complicated due to the blockades and hartals.
Another important factor of the paint industry that is influenced by the political sector is the
procurement of the raw materials. This has some important impacts on the industries
performance, prominently on costs, profitability; product quality; productivity and overall
performance come out from the outsourcing activities. Outsourcing of raw materials it
reduces the cost of production and save the time for distinctly producing those raw materials
itself. These analysis shows us that if the there is any kind of political turmoil than obviously
it affects the productivity of the whole distribution network and as a result.
Despite of having so many problems regarding the political issues, at the end of the day the
paint industry is being successful to manage a positive growth. Effective distribution system
of the companies came into aid in maintaining this growth and overcoming the instability.

Economic Analysis:
Economical factor has a positive impact on the industry.

As we live in a country where majority of the people live under poverty and with a low GDP
per capita, therefore the growth of trade and commerce is slowly developing. However, the
paint industry has been showing a different picture than all other industries. In the last few
years the paint industry has been experiencing a double-digit annual growth until 2010. The
growth has dropped due to the stock debacle and the financial instability. On a brighter side
the paint demand is nearly 77000 MT/year, per capita paint consumption in Bangladesh is
roughly 250gms/capita, indicating tremendous scope for sector expansion in the coming
years.

Another major view from this context is that a few years ago there was a study done by Prime
Bank limited which showed that market size based on demand is estimated at Tk 1,000 crore
and domestic production capacity Tk 920 crore. The demand-supply gap, according to the
study, is Tk 80 crore. So from this view we can easily conclude that how the industry can
create a huge impact on the economy as more foreign paint industry is coming into our local
market.
Now, in spite of having political instability which limited GDP growth to 6% against the
governments target of 7.2%, the paint industry was successful enough to achieve a 15.58 %
growth rate.

Exchange rate is another major factor for the paint industry. This is so as the major
components of paint manufacturing comes through import. So if the exchange rate fluctuates
then it poses major risk for losses by either of the parties.

Social Analysis:
Social factor has a moderate effect on the industry

Socially the paint industry is not adversely affected this due to the nature of the product and
service. However, various industries and distribution network result into more jobs. Thus its
helping to alleviate the unemployment rate from the society.
However, the factor of society does not imply any direct force on the paint industry. Rather
the paint industry is supported throughout all cultures and societies.

Technological Analysis:
Technological factor has a positive effect on the industry.

Technological factors are relevant to innovations in technology that may affect the
operations, processes and strategies of all businesses in all industries. In this current age
technology is an essential component for growth and profitability. Technology brings scope
for automation and better resource management thus helping in increasing production while
reducing wastages and cost. The companies operating in the paint industry of Bangladesh
have moderate to high class technology in their production units. This development basically
came with the innovations brought by foreign companies like Berger, Asian Paints etc. The
current technology of the pain industry compared to the rest of the world is at a good state.

Legal Analysis:
Legal factor has a positive effect on the industry.

The legal system of Bangladesh has never been that strong. Rule and regulations are changed
very frequently which is a major problem for any type of business entity. The paint industry
is basically not affected by the legal terms other than the changes in legal policies of the
industry. Since, this industry is in a growing stage interventions are yet to be found.
However, changes in income tax and VAT laws, upward revision in tax rate and sudden
unpredictable changes in other business related laws may adversely impact results of
operations and cash flows.

Environmental Analysis:
Environmental effect has a moderate effect on the industry.

Environment is a major concern for all individuals and businesses. Currently we live in a very
volatile word. The course of human actions is leading the environment to a very vulnerable
state, due to this, now the world is getting more and more cautious about the environment. In
every business sector there are new laws that promotes environment friendly products and
production processes. Similarly the paint industry is also under the scrutiny of the
environmentalists. The uses of lead in paint have long been a major issue. However, yet in
Bangladesh a full ban on paint with lead is not amended.
However, recently the NGOs with the aid of the government are turning their heads towards
different environmental concerns, which in the paint industry have triggered a wind of change
to greener products

Summary
Political

Moderate

Economic

Positive

Social

Moderate

Technology

Positive

Legal

Positive

Environmental

Moderate

Table: PESTLE summary

Through PESTLE analysis we found out that the paint industry is very attractive in context of
Bangladesh, however, none of the attributes of the external factor is dominantly hampering
the industry directly.

Porters 5 Forces

Threat of
New
Entrants
(High)

Bargaining
Power of
Suppliers
(Moderate)

Competitive
Rivalry within
the Industry
(Very High)

Bargaining
Power of
Buyers
(High)

Threat of
Substitute
Services
(High)

Threat of New Entrants- High (Unfavorable)

Threat of new entrants in the paint industry is actually very high as there is less entry barriers
yet and there is huge growth prospect as the demand is increasing rapidly. Bellow some
reasons for this is mentioned
o Entry barriers are relatively low or moderate. Since there are no legal barriers
imposed in this sector, new companies are easily entering the market.
o The already existing paint manufacturing companies are constantly innovating
new products and with advanced technology, they successfully reduced their
costs.
o Since the customers are less loyal to a particular product, there is a high
possibility of takeover through superior quality at lower cost.
o Although it takes a lot of capital for establishing a high tech firm, a small scale
production unit can be established at lower cost with reasonable quality.
o It is easy to graba large share of market in this industry as we have seen Asian
Paints are doing the same within four years of their operations.

Bargaining Power of Buyers- Moderate (Favorable)

The bargaining power of the buyers are moderate and in some categories low
o The bargaining power of buyers are moderate in the paint industry as there are
several good brands of paint being sold in a more close range in terms of price
as well as quality.
o Though there are several categories in paint like premium, deluxe, regular, it is
seen that still there are chances of buyers to bargain among the choices
available.
o There are buyers from all income levels and each has a demand of their own.
Moreover, all companies do not produce all types of paint, due to which
customers have the bargaining right to shift among brands in a similar
category.

Competitive Rivalry within the Industry- Very High (Unfavorable)

The competition in the paint industry is fierce. The new companies are gaining market share
easily with lower price and good quality. The reason for this are discussed below.
o Currently, the paint industry is being driven by technological innovation and
economies of scale. New companies are coming with new technologies which
are creating competition for both foreign and local manufacturers.
o Though the paint market of Bangladesh is vast and still has chances of
expansion, there is lots of competition among the companies to get a share of
this market. It is easy to gain market as the market is expanding rapidly and
new horizons are opening for paint industry in industrial uses.
o Foreign companies are pulling more pressure as they are more financially
powerful as well as have the upper hand of doing better advertisement at
reduced cost. As most foreign producers are from India it is easy for them as
TV ads are running in various Indian channels viewed in Bangladesh
regularly.
o Local companies are producing with local resources which are reducing their
cost. These products are demanded in rural and less developed areas as they
are cheap. This also increases the competition.

Threat of Substitute Services- Low (Favorable)

There are fewer alternatives of paints available to choose from. Although there are many
companies in thepaint, there is only one or two products are there that can be used as an
alternativeof paints. As an alternative product of paint customers can use tiles, glasses and
bricks but they are too much costly and they are not user friendly like paints, because if
anyone is using paints he/she can change their paints any time they want, but those who are
using the alternatives they would face great difficulty in changing them. However with latest
technological advancement, scientists are trying to innovate newer products as an alternative
of paints, but they are not successful yet.

Bargaining Power of Suppliers- Low (Favorable)

o The bargaining power of suppliers is low. In the paint industry various

companies procure their material from various locations. Foreign companies
import their materials where as local companies work with the one locally
available. Thus no supplier yet has dominance over the manufacturer.
o Most companies have their own distribution system thus they have little threat
from the retailers and wholesalers. Moreover, the dealers are also not very
powerful over the manufacturers.
o Since each company reserves their supplier to them, the lot size of the demand
for each supplier remains limited. Thus, they have less control.

Market Forces

Degree of Threats

Condition

Threat of New Entrants

High

Unfavorable

Bargaining Power of Buyers

Moderate

Favorable

Competitive Rivalry Within High

Unfavorable

the Industry
Threat of Substitute Services- Low

Favorable

Bargaining

Favorable

Suppliers

Power

of Low

How macro environment is affecting the PORTERS five?

The components of Macro Environments are

1) Political and legal forces
2) Demographic forces
3) Technological forces
4) Global forces
5) Social forces
These forces have impact on every industry. Depending on these forces,an industry takes
their decisions. How these forces affect painting business in Bangladesh will be described
below.

Political and legal forces:

Political environment in Bangladesh is always unstable. Frequent changes of government and
policymakers reluctance or incapability to implement or design progress oriented policies is
a major drawback for the paint industry, an industry that is constantly changing in terms of
technology. Again strikes, blockades these also hamper the industrial works badly. Clash
between two major political parties is a common scenario in Bangladesh and it badly hampers
the total economy. Though after 5th January of 2014, political situation is stable enough but
due to our frequent political instability and security problem, new local companies dont enter
into the market till today. But the risk of new entrants in this industry is not very low. In near
future, Japanese paint manufacturer company Nippon, Jotun company from Norway and
Akzo Nobel company from Netherland will start their business in Bangladesh.
On the other hand, in budget 2014-15, tax rate imposed on paint manufacturing company is
higher enough to make profit for the local manufacturing companies. As a result, their
production rate goes up and they fail to increase their price according to the cost. But the
foreign companies are making profit by reducing their management cost. So, the local
companies fail to develop.

Demographic forces:
It indicates the characteristic of a population expressed statistically, such as age, sex,
education level, occupation or income level. Demographic forces affect the paint industry.
People with low or medium range income, will look for local company, rather than the
foreign paint company whose price is higher than the local companies. As, a result there is a
threat

of

substitutes.

Technological forces:
Because of technological forces rivalry amongst existing firms is getting higher. Keeping
aside the local small companies, leading companies are getting more technologically advance
to satisfy the customers. They are adopting the technological changes to grab more
customers. And also due to these forces both bargaining power of buyers and threat of
substitute are getting high since they are getting aware of the technological advance product
of the companies.

Global forces:
These are the forces which are affecting more or less to all the Porters five forces of paint
manufacturing companies in Bangladesh. Rivalry amongst existing firms force is getting
higher because more and more firms are operating simultaneously. These forces influence
bargaining power of suppliers. As, 51 paint manufacturer companies currently operating their
business in Bangladesh, but the number of supplier is not that high according to the number
of companies. These forces are also affecting to the bargaining power of buyers and
substitute products, due to these forces buyers have more options to choose and they can shift
to another companys products. Lastly threat of new entrants is getting affected but not that
much because it requires huge capital to invest to start a mobile financial service but still
there is a threat of entering new companies into the market.

Social forces:
Social forces influence individuals personality, lifestyle and attitudes. People now-a-days,
are more concern about the beautification of their homes, offices. Paint is no longer
considered as only paint. Its more than that. As-a-result, competition among the paint
manufacturing companies is high.

3 I analysis:
Competitor analysis helps a firm to assess the strength and weakness of current and potential
competitors. This analysis provides both an offensive and defensive strategic context to
identify opportunity and threats. So, competitor analysis is an important component.
There are 51 paint manufacturing companies in Bangladesh. Among them all are not doing
well in the market. Only few of them are doing business successfully like Berger paints,
Asian paints, Roxy paints and Elite paints. But, Berger is the market leader among all and
possesses almost 58% of total market share.

Immediate competitors:
Currently Asian Paints Bangladesh Ltd is the immediate competitor of Berger. Their core
competencies are mass customization and integrated distribution system.Though still now
Berger holds almost half of the market share (58%) but Asian paint is growing fast. They
holds almost 17% of the total market. If, in any case Berger does any mistake or Berger face

any problem which will hamper their whole business, Asian Paints will take the chance. So,
Asian Paint is breathing just behind the neck of Berger.

Impending competitors:
Other competitors who are low with market share but with the capability of gaining more
market share are impending competitors. Though now these competitors hold a small amount
of total market share, but they have the ability to hold a large number of market share. For
Berger, impending competitors are Elite paint (8%), Roxy paint (4%) or Pailac paint. Though
still these companies hold small amount of market share but by merging with each other or
with another multinational companies, they can gain more market share.

Invisible competitors:
Invisible competitors are the companies who are not currently operating their business in the
market but in future will be in the market. Maybe in near future, a new paint manufacturing
company may come into the market or a company from outside may establish their business
in Bangladesh. Invisible competitors of Berger are Nippon, Jotun or Akzo Nobel.

SWOT Analysis.
In order to get the actual picture of the SWOT of Berger firstly we will have to understand
the profitability factors of the paint industry in Bangladesh. Then basing on the core
competency of Berger and other paint companies the strengths and weaknesses will be
identified along with the opportunities and threats.
The paint industry profitability factors in Bangladesh are.

Market share

Modern technology

Brand recognition

Product variety

Product pricing

Research and Development

Core competency of Berger are

Product uniqueness

Product quality

Core competency of Asian Paints

Low pricing

Integration with distribution

Targeting large scale

Core competency of Elite paints

Targeting general mass

Competitive pricing

Below using the IFE and EFE matrix the strengths, weaknesses, opportunities and threats of
Berger are identified.

Key Factors

Weight

Berger

WS

Asian

WS

Elite

WS

STRENGTH
1. Market Share

.15

.75

.45

.30

2. Technology (Production, R&D)

.15

.60

.45

.45

3. Global Recognition

.10

.50

.30

.10

4. Product line or categories

.10

.40

.20

.30

5. R&D

.15

.75

.45

.30

6. Direct Services (Dcor, showroom etc.)

.05

.20

.01

.01

WEAKNESS
1. Pricing strategy

.10

.30

.40

.30

2. Competitor market capture

.10

.30

.30

.30

3. Market focus (Sub-urban & Rural)

.10

.20

.30

.40

2.86

2.36

Weight

Berger

WS

Asian

WS

Elite

WS

Total

Key Factors

OPPORTUNITIES
1. Scope of growth (market share)

.18

.90

.72

.54

2. Technological development

.17

.68

.51

.51

3. Environment Friendly Product

.10

.50

.10

.10

4. New sectors (auto-mobile, floor etc.)

.10

.30

.20

.30

5. Low price segment

.05

.01

.15

.20

.30

.45

.60

THREATS
1. New local competitor

.15

2. Threat of MNCs (Dulux etc.)

.15

.60

.60

.45

3. Competitors technological advancement

.10

.30

.30

.40

3.59

3.03

3.1

Total

Basing on the matrixes the strength, weakness, opportunity and threat were identified by
comparing the industry profitability factors with the core competencies of the major
companies in the Bangladesh paint industry. Below the summary of the SWOT analysis is
given.

Strengths
1. Largest market share in Bangladesh.
2. High tech production facility.
3. Global recognition.
4. Multiple product categories to serve more customers.
5. Massive R&D investment.
6. Only provider of direct decor services. i.e. home decor.

Weakness
1. Premium pricing strategy. (Based on the income range of BD)
2. Competitors building market share with low pricing.
3. Not focused in markets the sub-urban and rural areas.

Opportunities
1. Scope of growth in paint sector.
2. Bringing newer technology.
3. Bringing environmental friendly products.
4. Serve new markets like automobile paint, floor paint etc.
5. Bringing low priced products to serve the untouched market.

Threats
1. New competitors in local market. (Pailac, Roxy, Barger etc.)
2. MNC's coming by next year. (Dulux)
3. Price wars in the regular category products.
4. Competitors gaining to access to similar technology

Key Partners

Subsidiary
Company:
Jenson &
Nicholson
(Bangladesh)
Limited.
Joint Venture of
Becker
Industrial
Coating Holding
AB, Sweden
and Berger
Paints
Bangladesh
Limited.
Financial
Partners :
Standard
Chartered Bank,
The Hong Kong
Shanghai
Banking
Corporation
Limited,
Citibank N.A.
and Commercial
Bank of Ceylon.
Supply of raw
materials from
some of the best
known names in
the world:
MITSUI,
MOBIL,
DUPONT and
BASF.

Key Activities

Various types of
paints at
competitive
prices.
Creating job
opportunities by
expanding
business.
Marketing and
branding.
Maintaining
customer
relationships.
Sponsoring sports
events and
Continuous
innovation and
development of
products.

Key Resources

Brand value and

recognition.
Innovative and
customer friendly
products.
Large number of
dealers.
Wide range of
services.
Financial
resources and
capable HR.

Value

Customer

Propositions

Relationships

Balanced
portfolio of
products.
Wider range of
products for all
type of
customers
consisting of
different
income levels.
Closeness to
customers
through
numerous
dealers all over
the country.
Sharing
transportation
cost with
customers.
Providing
discount and
warranty.
Higher brand
value.

Free technical
advice on
surface
preparation.
Color
consultancy and
special color
schemes.
Launching
Breathe Easythe first odorless
paint solution in
Bangladesh.
Launching
Home Decor
Service.
Launching
Berger call
center

Channels

2 main factory
in Dhaka and
Chittagong.
10 sales offices
and 1500
dealers all over
the country.
8 strategic
depots manage
sales activities
all over the
country.
Several
distributors in
64 districts.

Customer Segments

Demographic
Segment(Offering
products based on
age, gender and
income level).
Decorative segment.
Automotive,
Marine, Residential,
Commercial and
industrial segment.
Psychographic
segment( offering
products that
matches customers
lifestyle and
personality)
Behavioral segment.
Users- Regular,
First time, Potential.
Loyalty- medium,
strong.

Cost Structure

Commission given to both suppliers and dealers.

Fixed cost, inventory cost, transportation cost,
government tax.
Investment on product innovation and others.
Marketing and Advertising.

Revenue Streams

Selling various types of paints and paint related

product.
Revenue from transporting product.
Receiving money from dealers.

Key Partners:
Berger Paints Bangladesh Ltd has a subsidiary company called Jenson & Nicholson
(Bangladesh) Limited which is specified in sub section 1 of section 186 of The Companies
Act 1994 is attached to the Annual Report and Financial Statements of the Company. Berger
Paints Bangladesh Limited also owns 49% shares of Berger Becker Bangladesh Limited
BBBL. BBBL was incorporated in Bangladesh on 20 December 2011 as a Joint Venture of
Becker Industrial Coating Holding AB, Sweden and Berger Paints Bangladesh Limited. The
principal activities of the company are manufacturing and marketing of coil coatings. They
get their supply from some of the best known names in the world: MITSUI, MOBIL,
DUPONT and BASF. As per the agreement between J & N Investment (Asia) Limited and
Berger Paints Bangladesh Limited, an amount is required to pay as Royalty @ 1.25% on net
sales of the products under the technical categories Robbialac, Colorizer, Apexior 1 & 3 and
Protecton. The agreement is valid for five years from 01 January 2012 to 31 December 2016.

Key Activities:
The primary activity of Berger Paints Bangladesh Ltd is to sell various types of paints at
competitive prices. Since there are different needs for people, Berger came up with the most
variety of product for their customers. They created many job opportunities by expanding
their business. In each year they spend a huge amount of money on advertising. Since the
competition in the paint industry is increasing rapidly, Berger paint has implemented newer
marketing strategies to beat their competitors and at the same time increase their sales. They
also spend a lot of money for Sponsoring sports events and Continuous innovation and
development of products.

Key Resources:
Berger Paints Bangladesh Ltd is one of the oldest names in the paint industry in Bangladesh
and the countrys major specialty paints business with products and ingredients dating back
more than 60 years. Its brand value is more than any other paint companies in this country.
Berger has a very strong reputation in the market. Their customer loyalty is their strongest
resource. Berger always believes in innovation. They are technologically very much
advanced. They have a very strong R&D which innovate products continuously. The product
range of Berger includes specialized outdoor paints to protect against adverse weather
conditions, Color Bank, Superior Marine Paints, Textured Coatings, Heat Resistant Paints,
Roofing Compounds, Epoxies and Powder Coatings. In each of these product categories,
Berger has been the pioneer. Berger has invested more on technology and Research &
Development (R & D) than any other manufacturer in this market. It selects the raw materials
from some of the best known names in the world: MITSUI, MOBIL, DUPONT, HOECHST
and BASF are a few to name. The superior quality of Berger's products has been possible
because of support from its advanced plants and an international-standard of strict quality.

Value Proposition:
Berger markets both water based and solvent based paints in our country. Beside this Berger
also market Cement paint which can be used for exterior wall coating. In addition to that
Berger also markets small quantity of powder coating paint. They have a very balanced
portfolio of products including decorative, industrial, marine and automotive products. They

have numerous numbers of dealers around the country. In every city they have at least one
dealer. They have put their dealers in those cities in a way that the local people can easily buy
from them. In that case their marketing policy was very helpful. They are very good at
maintaining relationships with their valuable customers, thats why they even share the
transportation cost if the customers purchase a very good amount of paints from them. If their
clients purchase paints worth of 5 lac or more, Berger provides a minimum of 10% discount.
In some cases Berger even provide up to 15% of discount. They obviously provide warranty
but their warranty is far more customer friendly than their competitors. If there were any
problems in their product or if because of their product the customers faces any problems,
they will not only change the product but also give demurrage for that.

Customer relationships:
Berger Paints Bangladesh Ltd provides customer support; connecting consumers to
technology through specialized Home Decor service; giving free technical advice on surface
preparation, color consultancy, special color schemes etc. To bolster customer satisfaction,
Berger launched Breathe Easy- the first odourless paint solution in Bangladesh. The company
also maintained Innova Wood Coating, PowerBond adhesive and TexBond textile chemicals
to cater to the needs of the customers.

Channels:
Berger has two main factories in Dhaka and Chittagong, which helps them to maintain their
supply of product all over the country. They have 10 sales offices and 1500 dealers all over
the country. Other than the dealers, Berger has many channel partners like confectionary
shops or even some cement retail stores who sell their products to the future customers.
Berger has many indirect dealers as well like aluminum shops, Tiles shops, photo gallery etc
who helps Berger to sell their products and in return they get some commission. They have 8
strategic depots manage sales activities all over the country. They are- Dhaka, Chittagong,
Sylhet, Bogra, Rajshahi, Khulna, Comilla and Mymnsingh. Activities of all eight strategic
depots are monitored and controlled by the Sales (D) Office situated in Corporate Office.
Time to time sales review meeting with the representatives of all sales depots is conducted to
evaluate the current sales position of the Co., discuss the reasons for current success or
failure, determine the next action plans to strengthen current position of the Co., kinds of
incentives offered to boost up sales and etc.

Customer segments:
Berger Paints (BD) Ltd. offers a complete paint solution through hundreds of products for
their customers. Berger has different product line for different customers. They have products
for different age, gender and income level. Berger paint Bangladesh limited mainly segments
their product mainly on three categories. They are decorative, marine and Industrial products.
Since there are customers with different income levels, they manufacture products based on
their needs. There are some customers who are heavy users and there are some who are
moderate users. By analyzing their needs and usage behavior Berger had launched ecustomer service using which they monitor their customers usage and based on that they only
produce those colors of paints, that their customers want. Obviously there some customers
who are potential and some are ex. To attract these customers Berger comes up with
attractive offers. Social class and VALS (Values and Lifestyles) are the psychographic
segmentation for the company. High, middle and low social class people and people with
different attitudes and lifestyles who are looking for value against their payments for
particular products and services are the customers of Berger Paint Bangladesh Ltd.

Cost Structure:
Every year Berger Paint Bangladesh Ltd gives good amount of fees to its dealers for selling
their products. All dealers give a great amount of value by selling paints and giving
technological support to Berger in exchange of some handsome amount of fees. Even while
getting their supply of raw materials, Berger spend a good amount of money on their
suppliers so that they can get their supply in time and in good condition. Berger spends a lot
of money on Fixed cost, inventory cost, transportation cost and government tax. Each year
the cost raw materials and other fixed costs like electricity bill, gas bill, machinery costs are
increasing, thats why Berger spend a lot of money on this. Other than home country
government taxes, Berger have to spend many more tariff costs. Each year the competition is
rising, thats why Berger is also increasing their advertisement on TV, radio, newspapers and
internet and for that they are spending a lot.

Revenue Stream:
Berger Paint Bangladesh Ltd has multiple revenue streams. They offer services which add to
their revenue streams. They are also working very hard in these streams to survive in the
paint industry in Bangladesh. Their first revenue stream is selling paints and paint related
products like brush. Another way of revenue is transporting their products to the customers.
They also have a team of interior designers, who add a lot of revenue as well.

Core Competencies of Berger

The core competencies of Berger that leads them to efficient and successful business are:

Product Uniqueness
Product Quality
Product Innovation

Corporate level strategy

Corporate level strategy is concerned with the strategic decisions a business makes that affect
the entire organization which drive a companys business model over time and determine
which types of business and functional level strategies managers will choose to maximize
long run profitability. Corporate level strategies make the headline decision for the company
and give a direction to the company.

Mission
Berger is one of the most technologically advanced companies in the country. It Mission is constantly
striving for innovating superior quality products and services in every sector of paint industry. It is
aim to capture biggest pie of paint industry with customer service and green innovation of product.
Berger's one of the prime objectives is to provide best customer support-connecting consumers to
technology through specialized services like free technical advice on surface preparation, color
consultancy, special color schemes.

Ultimate objective
The ultimate objective of Berger BD is to be giant company with superior quality and new
innovation in paint industry and satisfying every level of paint customer in Bangladesh.

Vertical Integration
Berger BD is following vertical integration strategy. it is trying to control full supply chain
and become closer to customer. It is using forward integration and backward integration as a
corporate strategy.

Backward Integration
Before 1995 Berger paints BD was depending on other company for importing Raw
materials. Berger Paints Bangladesh Limited owns 100 percent shares of Jenson &
Nicholson (Bangladesh) Limited in 1995 which was involved in trading and indenting of
different raw materials of paint. It has started production and marketing of tin containers from
1995 and printing of tin sheets from 1997. JNBL also cater 3rd party fulfilling the
requirement of its parents company Berger. That backward integration helped to control
supply chain.

Forward Integration
Berger Paint BD is trying for ahead to customers by using forward integration strategy. For
successfully implementing forward strategy it was introduce different tolls and made strong

distribution channel .With its strong distribution network, Berger has reached almost every
corner of Bangladesh. Nationwide Dealer Network, supported by 8 Sales Depots strategically
located at Dhaka, Chittagong, Rajshahi, Khulna, Bogra, Sylhet ,Comilla and Mymensingh
has an unmatched capability to answer to paint needs at almost anywhere in
Bangladesh. Berger is providing best customer support-connecting consumers to technology
through specialized services like free technical advice on surface preparation, color
consultancy, special color schemes etc. To bolster customer satisfaction, Berger offers Home
Decor Service from where one can get an array of services pertaining to painting.

Different Tools is using for forward integration strategy

3c (customer care service)

Experts help

Color bank

Color Guide

Online support

Problem solver

Painting tip

Home dcor services

Membership opportunity

Diversification- Related Diversification Strategy

Berger pain Bangladesh is following Related linked diversification. It is following both
related management and related operation level diversification.

Related operation level strategy

Berger Paint was diversified its product within paint industry. New products are specialized
outdoor paints to protect against adverse weather conditions, ColorBank, Superior Marine
Paints, Textured Coatings, Heat Resistant Paints, Roofing Compounds, Epoxies and Powder
Coatings. its introduce Marine, industrial paint which is related to other paint it use to
produce. Brush & Roller

Pre-Treatment Chemicals mr. Expert Construction Chemical are also related to comical
industry and Berger paint BD can use their production core competency to produce related
those new product. Berger Paint BD is following related Diversification strategy.

Related management level strategy

As Berger Paint BD is following Releted diversification strategy it is shareing its
management core competency for its diversifying product .Berger is diversifying in same
industry which is helping its management to establish a new product in consisting market.

Strategic Alliances
Berger Paints has brought world class products through strategic alliances with international
market leaders: Italtinto, Italy for tinting operations- ColorBank, Becker Acroma, Italy for
Innova- Complete Wood Coating Solutions, CRIL, India for Pretreatment Chemicals, PPG
for Vehicle RefinishBerger paint Bangladesh is making strategic alliance with world reputed
organizations in different areas, investment in infrastructure development, wide distribution
network to reach every nook & corner of the country and commitment to the stakeholders.
As a part of diversification plan, Berger has signed an agreement with PPG Industries,
USA for exclusive distributorship of PPG products ( auto refinish) in Bangladesh.

Strategic Outsourcing
Berger collects its Row materials by outsourcing. Collection of row materials is one of the
value creating activities for any organization for that Berger is following out sourcing
strategy. Berger is outsourcing its row materials from some of the best known companies of
the world such as-Mitsui, Mobil, Dupont, Hoechst and BASF are a few to name. Berger Paint
Bangladesh Limited also involved with outsourcing of its research and development
activities. It conducts the research and development activity by the outsider research and
development agencies. Research and development activities are the most important activities
for the development of any company. Skilled agencies can properly find out the marketing
and other problems and provide the suggestion for the solution. For example-when the Berger
wanted to create a new brand color named jihilik then the Research and development
agency conducted a marketing research for, what kind of people prefer this brand. The
researcher discovered that most of the rural people prefer this brand. This research of the

skilled outsider agency helped Berger to be known about the market demand for its new
product

Corporate level strategies of Berger paint Bangladesh LTD and its

mission- The relationship
So the corporate level strategies of Berger paint Bangladesh are basically vertical integration
and related Diversification- Related linked Strategy, Strategic Alliances and Strategic
Outsourcing. And the mission is- constantly striving for innovating superior quality
products and services in every sector of paint industry. It is aim to capture biggest pie of
paint industry with customer service and green innovation of product.
Through vertical integration BPBL is providing best customer services and maintaining a
very good supply chain. By strategic alliance Berger Paint BD is providing world best
product in Bangladesh market which helps accomplished mission of providing superior
Quality product in every sector of paint industry.
Strategic Outsourcing helps BPBL to get world class raw materials from different corner of
Globe and outsourcing find out the marketing and other problems and provide the suggestion
for the solution by skilled agencies. In the sector of innovation strategic outsourcing also
helps Berger paint Bangladesh.

Business Level Strategy

Definition:
Each successful firm strives for gaining competitive advantage by exploring core
competencies in specific product market. When a firm pursues strategy by implementing
integrated and coordinated set of actions and commitments to create sources of sustainable
competitive advantage, this particular strategy is referred to business level strategy.
Business Level Strategy primarily raises three specified questions from producers
perspective. These ares-

Who will be served?

Deciding who the target customer is that the firm intends to serve with its business level
strategy is an important decision. Customers can be segmented into sections based on the
differences in customers need. Berger Bangladesh has segmented their customer base into
three categories such as Professional users, Home users and Industrial users of color paint
and coating.

What needs to be satisfied?

After deciding who the company will satisfy the next phase includes identifying the targeted
customer groups needs that its goods or services can satisfy. To stay at the forefront of
developing technology in a relatively stable industry, Berger has taken on the challenge to
satisfy the customer segment that includes different industries (textile, marine, GI and
automotive coatings) and professions (professional service, projects, office interior). Berger
emphasizes on satisfying their consumers who are concerned on creative, green (eco friendly)
and updated requirement by identifying and providing color, painting and coating solutions.

How those needs to be satisfied?

Berger has invested more on technology and Research &Development (R & D) than any
other manufacturer in this market. It selects the raw materials from some of the best known
names in the world: Mitsui, Mobil, Dupont, Hoechst and Basf are a few to name. The
superior quality of Berger's products has been possible because of support from its advanced
plants and an international-standard of strict quality. Investment in technology and plant

capacity is even more evident from the new factory of Berger Paints Bangladesh Limited at
Savar.

Five Generic Business Level Strategies

Although according to Porter- cost leadership has an inverse relationship with differentiation;
modern business model suggests that both cost leadership strategy and product differentiation
can be run from the same page. Here in case of Berger Paints Bangladesh Limited, out of the
five generic business level strategies Berger pursues Integrated Cost/Differentiation business
strategy since they are bringing to life a new way to solve the customers need through
engaging value chain activities and functions that allow the firm to simultaneously sell
differentiated products at a reasonable price compare to that of immediate competitors.
Integrated strategy, by definition, is an integrated set of actions taken to produce goods or
services at an acceptable price with wide variations possessing distinctive features. Berger

Paint Bangladesh is clearly the market leader in the industry which provides both innovative
and brilliantly qualified products for exclusivity and general standardized products for regular
use as well.

The Value Creation Frontier

In the value creation frontier Berger falls in between responsiveness to customer and quality
as excellence region. Although they are increasing their product line that ensures the
continuation of innovation, but since it pursues neither premium pricing strategy nor it has
the tendency to put distinctive features for all their new products- their positioning in value
creation frontier line should not fall above quality as excellence region.

Figure: Value Creation Frontier Line

Product Life Cycle

The paint industry in Bangladesh is currently at the growth stage as it still is experiencing
high amount of growth every year. Berger has continuously been the market leader with the
advantage created by being the pioneer in the paint industry. In the product life cycle we
observe that Berger itself is also in the growth stage. The growth proximities of the industry
resulted into25% growth at the end of 2008 and a growth of 15.58% on the last year. With
services growing rapidly Berger is destined to grow further in the future. Currently Berger is
operating in all the seven divisions of Bangladesh, however, they are yet to reach to many
customers in the sub-urban and rural areas of Bangladesh.

ANSOFF Matrix

Berger is the pioneer in the paint industry of Bangladesh. They have been serving different
products to the customers of Bangladesh with great success. Initially, Berger followed the
Market Penetration strategy with the same products in the market. However, with the scope
of growth beyond the major cities Berger Bangladesh started to use the Market
Development strategy, where it served newer markets with their existing brand of products
and services.
Recently, Berger has started to provide new services like Berger Home Dcor, Berger Marine
and Smell Free Paint. All these are new products for newer markets as well as for existing
markets. In order to serve these products Berger is using both the Product Development
strategy as well as the Diversification strategy.
Berger has been using all the strategies of the ANSOFF model effectively from time to time.
With the necessity of the market they have mechanized their plans accordingly with the right
strategies.

BCG Matrix

The BCG matrix shows the position of the products of the company. There are several
products and services of Berger and each fall differently in the BCG Matrix. The product
categories of Berger areDecorative: The decorative category of Berger falls in the Star category of the BCG Matrix.
This is because there is high chance of market growth as well as high chance in increase of
market share as no other companies offer this type of services.
Industrial: The industrial paint category falls under the cash cow as the market growth is
lower but the market share of Berger is high in this category due to superior quality of the
products.
Marine: The marine category of Berger is also an important segment. The marine category is
facing comparatively high growth but the market share is yet lower. Thus, the marine
category can be considered to be a question mark.
Powder Coating: Powder coating falls under the Star category. The product is having high
market share as no other company in serve these products. Moreover, the growth of the
market is also very high thus it justifies the position in the BCG Matrix.
Adhesive: The adhesive category includes the products which are widely used for different
purposes. The growth of the product is relatively low but the market share of Berger in this
category is high, thus, it can be put in the category of Cash Cow.
Textile: With international standard and competitive price this category of Berger is currently
at the Star category. As the market share is high along with the growth prospect of the
market.

Brush & Roller: Brush & Roller is the most commonly used product, used in home, offices
and other places. The market share in this category is high and so is the growth prospect.
Thus, this can also be termed as a Star.
Wood coating: Wood coating can be put as a cash cow as Berger has a relatively strong
market share. The growth of the market has also turned out to be low.
Breathe Easy: Breathe easy is another category of product that is relatively new. This
product has little similarities with question mark as the market share is currently low but
there is a high growth prospect.

Functional Level Strategy

Berger is the market leader of the paint industry in Bangladesh. With various products and
wide distribution network Berger serves the people of Bangladesh with superior quality
products at a competitive price. Strategically serving the customer with the efficiency, quality
and innovation has been the key to Bergers success.

Berger has a strong network with distributors and agents working in all parts of Bangladesh.
With a central production plant they have achieved efficiency by their strong and effective
network. This efficiency is linking all the resources of Berger with the best services to the
customers.

The product quality of Berger is unquestionably the best in the paint industry is Bangladesh.
With proper research and development Berger develops its products and services regularly.
This gives them the opportunity to serve the customers with the best quality products.

Continuous innovation of Berger has been one of its success factors for a long time. With a
robust research and development Berger is continuously working on innovating newer
products and services. This innovation has resulted into a growth of 25% in 2008 and
similarly it has been reflected last year by a growth of nearly 16%.

Berger serves its customers effectively with focused services from Berger 3C, Home Dcor
outlets and other agents. Customers can buy and easily quarry about the products and services
of Berger. They can also take suggestions for all their paint related work.

4 building blocks of Berger Bangladesh

Superior Efficiency: Berger has superior efficiency in terms of producing paint

and determining pricing strategy for their operations in Bangladesh. As Berger is
collecting the best raw materials from international market, it is ensuring best quality
with a competitive price. Berger is following integrated differentiation which ensures
them the best product quality at an acceptable price to the consumers and minimizes
cost by making long team commitment raw materials suppliers from the international
market. Berger makes its supply chain efficient by maintaining third party contract.

Superior Quality: Berger maintain superior quality by doing strategic alliance

with worldwide market leader company like Italiano, CRIL, PPG (vehicle paint) for
quality products. Using backwards integration strategy Berger Bangladesh made a
relation with world best raw material suppliers like MISUI, Mobil, Dupoint and
BASF which helps Berger to maintain a superior quality product. By making third
party relation Berger Bangladesh is getting raw material smoothly and maintaining
quality supply chain.

Innovation: As Berger is following forward integration strategy, they are

approaching towards customer by that understanding and creating values for
consumers. In Bangladesh Berger has invested the highest amount of money in R&D
sector compare to that of its competitors. In addition to that, Berger keeps adding new
products in their product line to ensure sustainability in the industry as a market
leader.

Superior Customer Responsiveness: Berger is trying to get closer with its

stakeholders and customer with a motive to solve customer problems and to provide
solutions. Berger has around 1500 dealers around the country 8 strategic point to
serve the customer and satisfying their needs. The strategic points are located in major
cities like Dhaka, Chittagong, Rajshahi, Barishal, Khulna, Sylhet, Comilla and
Mymensingh. Berger initiated 3C center, online support system, problem solver team,
architect

team, expert team, membership facilities etc by following forward

integration strategy to satisfying customers need in different segments.

Linking the resources, core competency, capabilities with functional

level strategy for value creation

The strategy of functional level is to bring in innovation within the company which gives
Berger Bangladesh the core competency of product uniqueness, quality and new product
innovation. Berger uses foreign raw materials and most of its human resource is sourced from
Bangladesh.
With effective management of resources and putting them in the right place in the right time
Berger is achieving efficiency in it production. These resources built the capabilities of the
company resulting into better predicting the future needs and demands and continuously
bringing innovation to the customers.
Finally, all the resources, core competency and capabilities of Berger are linked to create the
perfect strategy Innovation. This is what helps in creating value for both the customers as
well as the company.

Division and departments of Berger

Managing director is one of the members of Board of Directors. Beside General

Manager Operation and General Manager- Finance are also the members of this
board
The directors are elected by the provision of the Articles of Association of the
Company and retiring by rotation under The Article (121 and 122) of this company.
Managing Director. He/ She is directly supported by Two general managers (General
manager- Operation and General Manager- Finance) and two Managers (ManagerHR a Liaison Manager)
Two major functional departments are Operation and Finance and both of these
important departments are headed by respective General manger

 Manager Finance and Manager Account work under GM Finance.

Some responsibilities of GM functions includes: Planning, Raw materials ,
Production, Marketing, Sales, Supply Chain Management, R & D, Distribution.
Responsibilities of GM Finance includes: Finance, Accounting , Credit, Costing

Marketing Strategy:
Marketing strategies of Berger is built on STP Segmentation, Targeting and Positioning.
Berger discovers different needs and groups in the market place, target those needs and
groups that it can satisfy in the superior way and then position its offerings, so that the target
market recognize the companies distinctive offerings and image.
Their strategy includes:

Image differentiation- It has strong slogan and symbols to identify image powerfully.

Media & sponsorship Media is playing a strong role for Berger to be top a top
brand. It is also sponsoring cultural events.

CSR- The way they are engaging in CSR activity is helping them to maintain a good
image in the stakeholders mind.

Environment strategies of Berger for marketing Berger is promoting harmonious

manner to manufacture their product in eco friendly way.

Marketing Mix
8ps of marketing mix of Berger

Product:
One of the interesting facts about Berger is that it is the only company that contributes all
types of paint in our country. Most of their factory production is based on the location of in
Dhaka and Chittagong. In the lower end of the segmented market, so far they did not try to
bring variety. But in the upper end they introduced some specialized brand with added
attributes. Berger divides their product segmentation in the following ways:

Berger decorative

Berger industrial

Berger marine

The renowned brands of Berger are given below with the distinct category:

Based on formulation products can be categorized into two different forms. They are:

Water based

Solvent based

Another important brand name is Berger color bank. This can help consumers take their
preference priority at first by giving the opportunity to choose their own choices color.

Price:
To be the top at customers mind they follow the statement of Provide high quality product at
highly affordable price. In some cases they had to put a higher price rather than their
competitors price because of some governments restriction of quality and financial law. In
addition, they also have a commission and discount system for their dealers and retailers
depending on their purchasing amount from the company. They also offer some special
commission and discount rate for their premium Dealers, who can cross the benchmark, set
by Berger. Basing on these Berger has three Pricing strategy, they are:

Factory Price

Dealer Price

Maximum Retail Price

Sales strategy

They have different sales strategy for its three different product lines and every after certain
period they make some adjustment to keep it time worthy. Present sales strategies are the
followings:

Decorative paints are basically sold through Companys registered Dealers.

Industry and Marine paints are basically sold through personal selling.

Promotion:
Advertising- electronics media:

The main form of their promotion system is through

electronic media mainly by BTV and cable channels. They also use radio to promote their
brand.
Print media: To reach the maximum number of people Berger paints also uses print media.
Like newspaper, magazine , and other publications.
Billboards: Berger also uses billboard to get a potential grasp of attention throughout their
customers. In most cases they use it industrial areas.
Sales promotion: To grab a consistent form of relation with customers Berger uses various
forms of trade promotion system:

Gift items to boost up sales

5 % discount on the decorative business category of paints

Dealers of all over the country except Dhaka & Chittagong are entitled to enjoy
30days credit facility. Dealers must be registered to get these facility. The duration of
the facility is for 37 days.

To make a good relationship with the dealers they create a good arrangement system
for the dealers to meet with the Co.

For selling more Berger products a turnover incentive is offered to them.

The more amount a dealer buys , the more incentives he gets of certain percentage on
total monetary value of invoice.

Each registered dealers of Berger has to achieve a yearly sales target set by Berger to
enjoy TOC (Turnover Commission), a percentage on total yearly sales.

Publicity:

Young Painters Art competition

Young Architects Award

Sponsoring Delta Break Housing Fair

Public Relations:

Sales personnels visit to dealer

Communicate with the initiators of different projects.

Prolink division of Marketing Department communicates with various groups

(engineers, architect and etc.) related with paint business. Generating consumer pools
for sales.

Places/ Distribution
With its strong distribution network, Berger has reached almost every corner of Bangladesh.
Their nationwide dealer network, supported by seven sales depots strategically located in
Dhaka, Chittagong, Rajshahi, khulna, Bogra, Sylhet and Comilla has an unmatched capability
of cater to the needs of the consumers of paints products, almost everywhere in Bangladesh .
Distribution network is given in the following chart:

People
Berger paints Bangladesh have a motto of their own Our People are Our Strength.
The efficiency level their people have had helped them to become this countries one of the
most dynamic leading paint industry. Also, they have a culture of hiring the best people they
can get throughout their selection process.
They give high priority to develop their human resources. Importance is given on relevant onthe-job, in-house and external training programs, so that their people are well equipped with
necessary skills.
Berger Bangladeshs culture encourages professionalism, stimulates teamwork and promotes
innovation reinforced with highest ethical standard.

Physical evidence:
Berger has some physical evidence to show themselves a productive service provider towards
the customers. This is very important for an organization to promote them self.
Physical evidence for Berger consists:

Berger online paint shop

Dealer locator

Print media

Bill board

CSR activity

Dealers in all divisions

Process
With a strong distribution network, Berger has a good way to distribute their service properly.
Even their website is developed in a way that consumers can get easy access to their desired
products of choices. For example, if an industrialist wants to see how much amount of paint
he needs in proportionate to his budgeted price then they have an automated calculated
system where consumers can estimate their costing. Also, the helping tendency of the dealers
to deliver properly, make the distribution more smoothly than ever.
Productivity and quality:
Burgers main objective is to achieve business excellences through quality by understanding,
accepting, meeting and exceeding customer expectations. They follow international standard
on quality management system to ensure consistent quality of product and services to achieve
customer satisfaction. The brand image that Berger holds is the base for its product quality
that it has been maintaining for a long period of time. With the trend of upward success in
their business which ultimately leading them to a more opportunity to further expand their
distribution system and more functionalize their networking with the business group of
people, helping them to be more efficient in the paint industry.
.

Finance Division
The finance division is comprised of 4 units. They are

Accounts

Credit

Costing

Finance

Central accounts:
This unit deals with the budget and fixed assets. This unit prepares the annual budget of
different divisions and it also keeps the record of account payables, account receivables and
reporting.
Costing and factoring
The task of this unit is to forecast the costing of different departments and resorts them
regarding the expected expenditure of any alternation.
Revenue assurance
The finance division is comprised of 4 units.
Central account
Central account is an important unit of the finance division dealing with the budget and fixed
assets. The annual budget of various departments is prepared under the close observation of
this unit. They are responsible for keeping the record of accounts payable and receivables and
reporting.
Costing and factoring
This unit forecasts the costing of different departments and resorts them regarding the
expected expenditure of any alternation.
Revenue assurance
Revenue assurance units works consist of a series of different activities that are applied to
ensure that the business process, the organizational structure, controls and the information

systems related to revenue cycle work together to protect revenues and to maximize the
profit.
Taxation
The focus of this unit is to look after the tax, VAT and tariffs of that particular organization

Human resource management

Human resource management or HRM Department of Bergers task is to provide overall
policy direction on Human resources management issues and administrative functions related
to management of the employees. This unit of Berger looks after the recruitment process.
Compensation & benefits of the employees, learning and development and overall Human
Capital Management. The company values the human over the technology and they believe
that the human is more precious than any kind of technology. Thats why this unit focuses on
hiring, engaging and retaining the talented employees. The company encourages maintaining
a positive working relationship with all the employees working in. It also encourages and
ensures to follow the code of conduct and it maintains motivating the employees so that they
can perform well.
Things Berger does to attract Top Quality Management
At present, Berger is the leading paint manufacturer company in Bangladesh and it focuses
on hiring the hardworking and talented employees and allows them to accelerate their carrier
progression. Berger successfully hired a lot of intellect in their organization and also retained
these intellect in the long run. The organization successfully pursues hiring the best fit
according to their need and values through proper human resource planning, using effective
assessment, methodology, ensuring efficient process and establishing and maintaining strong
employer brand.

Employment opportunities and facilities of Berger

Opportunities and facilities that are provided to the employee in Berger are,
Cost effectiveness
Berger tries to minimize its cost behind the employees. But it doesnt mean that the employee
will not get the good amount of salary. Employees get a good amount of salary but at the
same time its also cost effective for the organization.
Skill based compensation
As skillful people are important assets for any kind of organization and Berger compensates
its skillful employees according to their skill. Here the skills of the employees are
emphasized rather than others. These kind of employees are paid in higher range compared to
the other positions of the organization. Basically top managers, production officers, technical
persons are basically considered as skillful employees
Pay for performance
If any employee shows the best level of performances, the organization increases his/her
facilities accordingly, so that the employee tries to deliver better work in future.
Bonuses and incentives
Salary:
Berger pays its employees a smart amount of salary which is better than any other paint
manufacturer companies at present.
Discount:
As an employee of Berger, he/she enjoys discount in some particular products.
Berger Paint Bangladesh Ltds share
Berger allows the employee to buy the share of Berger at a low price. The best part of this
facility is, Berger will bear the loss if there are any disaster but for profit, there is no binding.
Employees can enjoy the full percentage of benefit.
Foreign training

Employees need training for their betterment and thats why Berger provides training for the
employees and the company bears the cost.
Allowances:
Some allowances are

Home rent allowance

Transport allowance

Leave allowance

Medical allowance

Late shift allowance

Daily allowance

Leave fair assistance

If any employee takes a leave from the organization for one month then the employee will get
the full months salary.
Sick leave
In case of sickness, employees need to provide a medical certificate from a registered doctor
and also have to inform the head of the department or the human resource department
regarding the sickness. If any employee remain absent for an extended period due to sickness
and hospitalized, that particular employee required to inform human resource department
with details, so that they can claim for the insurance.
Maternity leave
Female employees get the maternity leave up to 90 days or 3 months during their pregnancy.
Employees can take the leave before or after the completion of six weeks from the day of the
delivery.

Bonus and other facilities:

Profit bonus

Target bonus

Festival bonus

Provident fund

Gratuity fund

Promotion

Company Structure and Control System

Division & Departments:
Berger is operating through well organized management structure headed by the Managing
Director. Under the Managing Director there are various Departmental heads, senior and midlevel Managers, Officers and staffs. Managing Director and the policy makers meet with
regular interval to review various business, operational and administrative issues
Berger has more than 300 employees of whom about 160 are general workers and the rest are
White Collar employees. These employees are presently working in different factories and
depots of the company.
The positional hierarchy of the company is as follows:
Managing Director
Director
General Manager
Executive
Senior Manager
Manager 1
Manager 2
Assistant Manager / Manager Trainee
Officer
Major functions, responsibilities & other necessary aspects of the major departments/
divisions of the company are described below

a. Marketing department: Berger has been growing very rapidly in terms of market
share and sales growth. In 1994, just after the year of launching marketing
department, sales growth was 34%. Berger now has a 48% share of the total paint
market. So we can say that there marketing department is doing very well in terms of
retaining the stable market growth. The major activities of marketing department is
given as following
Estimation of sales growth
Preparing marketing mix

 Promotion/ Communication mix

b. Sales department:

This department is divided into two parts: Decorative and

Industrial & Marine. The decorative sales department is headed by Director

Operations who is assisted by GSM. 7 strategic depots manage sales activities all over
the country. Activities of all seven strategic depots are monitored and controlled by
the Sales (Decorative) Office situated in Corporate Office. The marine department is
headed by Director Operations who is assisted by the Manager Industrial & Marine
for all the activities & performances of the department. These business groups
contribute 15% of the total turnover of the BPPL.

c. Finance Department: Finance department consists of director of finance who is

assisted by Financial Controller (FC), Accounts Manager and Cost Accountant
Manager, heads finance department. Three sections finance, personal accounts and
costing, perform all activities of the department. Finance department functions
includes in the following:
Bill Payment System: There are usually two types of billing system. Internal
and external. Internal billing system is paid as early as possible and external
twice a month.
Private Accounts Section: Accounts Manager dealing with Salary Payment,
Group Insurance, Foreign Affairs and issues related with corporate heads this
section.
Costing Section: This section finds out Gross Profit of a specific category of
paints and shows more than one price points by considering different GM
percentage on total production cost of that paint.
Audit: Internal auditor audits sales depots twice in a year, generally in June &
November. And yearly audit of total organization takes place once in a year.
VAT : This part of the section estimates the VAT amount that has to be
deposited to Govt. and exchequer on the bill payable to the external parties

d. Planning and Materials Department: The major responsibility of this department

is to collect raw materials at right time from right vendors at right price and at right
quantity. It also purchases required machinery and other stationery necessary for the
organization. Some of the functions include of P&M:
Finding out sources of material and machinery sources
Communicating with the sources
Buying raw materials, machinery & other necessary items from internal and
external sources
Developing new vendors
Reducing cost of raw materials
Finding out of substituting raw materials
Assuring the quality of the raw materials
Buying shad cards of Marketing department from India and Singapore
To collect color bank materials from Italy
Buying raw materials for Jenson & Nicholson.
e. R&D department: The function of the R&D department includes:
New product development
Improvement of existing product
Cost reduction exercise
Substituting raw materials with new source and new grade
Complain handling from site visit or sample testing
Providing customer service
Training the personnel of the company
f. Production Department: The production process includes the following
Raw Materials Department: Raw materials are gathered both from local and
international sources.
Water-based plant : The major water based plant products are SPD, PSD,
APE, LSE, Weather Coat, Tartaruga, Water Sealer and Roofing Compound.
There are 5 types of machine here TSD1, TSD2, Master Mixture, HSD4 and
HSD7
Solvent-based Plant: All the solvent-based paints are produced here. The
major products are RSE, PSE, Wood Keeper, Hammer Finish, Epoxy paints,

Plastron Sealer, Stoving Paint, Various Primers and all other solvent-based
paints.
Durocem Plant: As Durocem is basically cement paint, the main raw material
used for producing Durocem is White Cement. The machines that are used for
the production process are basically Ball Mills.
Resin Plant: Resin works as the binder for the solvent-based paints. Resins
are of various types and different types of resins are required for different type
of paints.
Distribution: Berger uses distribution as the way of dispatching the produced
items as per the requirement of different depots. First, the distribution
department hands over the container wise requirements of various products to
the plants. Then the distribution department plans the truck loading for
different depots.

A there lies a huge amount of business, Dhaka depot is

given the most priority.

g. FG Planning Department (Distribution): This departments function includes
Monitoring current stock position in the depots
Placing indent to the factory
Keeping information of the sales / being up to date
Placing additional / Minus indent if necessary
Informing the expected delivery date of paints from factory.

Top Management

Finance

Supply chain

GM Manufacturing & Projects

Human Resource & Administration

Research and Development

Marketing

Corporate Governance
Board of Directors

Shareholders:
Berger, last year 220 % dividend was given to the shareholder. They always maximize in
shareholders wealth. The Company has invested a substantial amount for expansion of
production capacity as well as diversification of products and businesses. Also, the gains
from holding its stock, by linking the pay of those managers to the performance of the stock
price.
Internal and External auditor:
An internal auditor performs audit-related activities in Berger. The person who is responsible
for auditing, reports to Director- Finance directly.
External auditors are usually employed for time-to-time basis. Internal auditor audits sales
depots twice in a year. The time frame for this is basically in June and November. And yearly
audit of total organization takes place once in a year

Control Structure and Control System

Efficiency: Berger has superior
Organizational structure

efficiency in terms of producing paint

consists of 7 departments

and determining pricing strategy for

headed by a Managing Director.

their operations in Bangladesh. As

The departments are headed by

Berger is collecting the best raw

either director or general

materials from international market, it

Control System
manager.

is ensuring best quality with a

Personal Control- The

competitive price.

employees are selected and

nurtured carefully in Berger by
OR

the managers.

GA

Quality: Berger maintain superior

quality by doing strategic alliance
with worldwide market leader

NIZ

Output Control- The output is

company like Italiano, CRIL ,PPG

ATI

consecutively evaluated and

(vehicle paint) for quality products.

ON

basing on the pre-determined

AL

standard.

DES

Behavior Control- Berger

approaching towards customer by that

IGN

internally trains develops and

understanding and creating values for

motivates its employees. The

consumers. In Bangladesh Berger has

managers properly

invested the highest amount of money

communicate with their

in R&D.

subordinates which eventually

results in enhanced
productivity.

Innovation: As Berger is following

forward integration strategy, they are

Customer Responsiveness: Berger is

trying to get closer with its
stakeholders and customer with a

Organizational Culture

motive to solve customer problems

Berger follows a centralized

and to provide solutions. Berger has

structure.

around 1500 dealers around the

country 8 strategic point

However, the decisions are

made by the top management as
well as the strategic points.

Control System
Berger implements a controlling system for its employee. Controlling is basically important
in order to get the best performance from the managers and their subordinates. It also makes
the employee and overall the company more efficient and effective and ensures the best
quality and continuous innovation. There are basically three types of controlling that Berger
does.

Personal control

Output control

Behavior control

Personal control
Berger manages its employees effectively under the seven divisions. The directors and
general managers assign the sub-ordinate employees with their respective tasks. The
employees are selected and nurtured carefully in Berger by the managers. Regular feedbacks
are taken in order to perceive the actual mind set of the employees.

Output control
Output control is a system where managers estimates or forecasts appropriate performance
goals for each division and employees and then measures actual performance on these goals.
Output control in Berger is linked with the appraisal system and is controlled directly by the
manager and the director.

Behavior Control
Berger internally trains develops and motivates its employees. The managers properly
communicate with their subordinates which eventually results in enhanced productivity. In
Berger the employees are satisfied as they can freely communicate their performance and
benchmark those with the required target or goal.

A proper utilization of a firm core competencies can creates value for the customers. This is
basically measured by a products performance characteristics and by the attributes for which
the customers are willing to pay. It has two parts. Oene is primary activities, whoch includes
collection of raw materials, operation, distribution, marketing & sales and finally the service.
To support these primary activities, there are supporting activities like human resource
management, research and management and technological development.
Primary activities

Research and development

Human resource and administration
Technological development

Raw material collection

First of all Berger collect the best quality of raw materials. Basically they import all of their
raw materials mainly from Pakistan and India. To deliver the customer the best quality of
product, Berger imports best quality of raw materials.
Operation
After collection of raw materials, it comes opeation. All the raw materials are being collected
from selected suppliers. So, the suppliers know the requirements of Berger. Then the
collected raw materials are taken to the factory and then production process starts. By
following each and every steps of production process, the final products are being made.
Distribution
Berger uses their own distribution channel. They have their own transportation system to
deliver the products to the dealer. They deliver the final products to the dealer according to
the demand of any particular product in any particular area. Sometimes Berger directly
deliver the product to the retailer or sometimes even directly to the customers.
Sales and marketing
Bergers sales and marketing department communicate the message of their high standard
products to the customers. For communicating the messages Bergers marketing team
formulates such strategies that competitors often describe as fierce. They consider their
marketing team as their brain and their sales team as their muscle.

Service
Berger is very much responsive to their customers. They try to satisfy their customers and
they provide their service accordingly. They takes care about the customer demand and try to
deliver it to them. Even customer can make their own color by themselves through the color
bank.
Research and development

Berger spends a lot of money in research and development sector. They continuously
research and tries to give the customers their desired product. For this reason they spend huge
amount of money here.The research and Development wing at Berger paints boast of housing
the best chemists in the country. The R&D team work relentlessly wiht the objective of the
improving product quality, minimizing wastages and complying wiht the envirionmental regulations.

Human resource and administration

Berger has the best quality employees working for them. The Human Resource and
Administration Department of Berger acts as the center of excellence to provide overall
policy direction on Human Resource and Administration issues and administrative functions
related to management of the employees. They believe that their employees are behind the
creation of the business and behind their success, not the technology. Berger ensure s the safety
for

each

and

every

of

its

employees.

Technological development
Berger is basically an IT based company and thats why they employed a group of highly
technically skilled employees. They developed innovative info tech, which not only help
them to attain their business goals but also provide the customer better service. Nationwide
they have very strong infrastructure for communication and data transfer. They also use
world renowned ERP system (SAP) to process the information with a single click.

Strategic Analysis (4P)

Strategic analysis is used to understand a companys strategy based on their Position,
Priorities, Payments and performance. We tried to analyze the strategies of Berger Paint
Bangladesh Ltd. through the 4P framework.
By completing the framework, we can analyze the companys current, future, or
recommended priorities as well as set forth a path in order to achieve goals and measure
accomplishments.
Position
Position part is comprised of mission, vision and values of any company. The mission of
Berger Bangladesh is to increase their turnover by 100 percent in every five year and to
remain socially commited ethical company.
Their vision is to be the most preferred brand in the industry ensuring consumer delight. They
desire to achieve their vision by being an innovative and technology driven company
consistently delivering world class products ensuring best consumer satisfaction through
continuos value added services provided by highly professional and comitted team.

Priorities
The main priority of Berger is to provide best quality service to their target customers. They
also focus on innovation for improved efficiency. Their another priority is to enjoy the
market leader position in the market.

Payments
The payments part describes the companys way of investment or other costs that may be
incurred by the company. Berger has invested more in Research and Development (R&D)
than any other manufacturers in the market. It collects raw materials from some of the best
known names in the world, like Mitsui, Dupnot, BASF etc. To ensure the best quality

of product to the customers, Berger also invests in establishing advanced plants and in
maintaining strict quality controls.
Performance
The performance showed how successfully the company is doing the business. At present
Bangladesh paint industry has few companies who have significant market share. But among
them Berger Paint Bangladesh Ltd. have almost 58% of total market share and the company
is the market leader of that particular industry. That means, Berger is currently doing well

SWOT Analysis
Strength:
Since they are already occupying largest market share in the Painting Industry of Bangladesh
they can use their financial stability to acquire more percentage of shares in the market by
making the efficient use of their assets. As the business is making more and more profit, the
liabilities and debts can be reduced by ensuring sufficient cash inflow from business operations.
Global recognition can be an advantage in order to build brand loyalty (which is still not
significant) through effective promotion and advertisement.

Weakness:
One of the biggest weaknesses of Berger Paints Bangladesh is that it has not been able to grab
the majority of shares in marine and automobile industry in terms of painting. One of their
immediate competitors Asian Paints has more control over that particular sector. Other
companies (e.g; Pailac, Roxy, Elite Paints etc) in this industry have quite a different ranges of
pricing strategy which is absent in case of Berger. Hence, the company can introduce wide range
of pricing category for people from income levels. Therefore they would be able to penetrate
more into the markets of sub urban and rural areas.

Opportunities:
There are certain undiscovered areas in which neither competitors nor Berger could establish
their business appropriately such as introducing production of painting for automobile industry.
Although recently Berger has been able to focus more on marine color painting industry,
automobile industry has still been somewhat untouched. Customer always demands newer
products; hence increasing product line with more innovative and ecofriendly products is always
a general opportunity for every company in the Painting industry.

Threats:
Berger should be more concerned about the price war going on in the industry. The business
level strategy of Berger is integrated differentiation which aims to produce better quality
products and minimize the cost. In order to sustain in the price war competition this strategy has
to be implemented perfectly in both the short and long run.

Recommendation
Recommendation on the newly developed business model:
Jhilik, which was introduced to capture the low income level customer group, needs to be
expanded more by using current distribution channel. By executing economies of scale in
production and emphasizing more on integrated differentiation strategy they can penetrate more
into the lower income level customer group by offering quality products simultaneously. Hence
according to our recommendation their current business level strategy is doing absolutely fine
and should maintain a status quo position. The environment friendly products that have been
added to their product line could not yet manage to get much exposure to the consumer level.
Thus, through effective branding and marketing strategy they should come up with creative
advertisement to gain more exposure. To enhance market share and to hold the leadership
position it would be wise to go for strategic alliance with ship builders, commercial builders and
automobile manufacturers.

Conclusion
Finally, we can see that Berger Bangladesh being the market leader in the paint industry has still
a great prospect of attaining more market share. We have seen that Berger has been well
dedicated in their goals and objectives which give them the competitive advantage in the market.
With the latest technology and the best research and development Berger has high potential to
hold the market as well as expand it further. The current model of Berger suggests several places
where a few adjustments will make it more effective and efficient. Though Berger is the market
leader they still possess great challenges ahead. With the recommendations provided Berger will
be able to conquer those challenges and retain its position as the leader in the paint industry of
Bangladesh.

References
1. http://www.bergerbd.com/news_blog/newsdetails/91
2. http://www.scribd.com/doc/81857363/Berger-Paint-Project#force_seo
3. http://www.studymode.com/subjects/project-report-of-berger-paints-page1.html
4. http://www.bergerpaints.com/investors/annual-reports.html
5. http://www.studymode.com/subjects/hr-report-on-berger-paints-bangladesh-page1.html
6. http://www.scribd.com/doc/78542427/Berger-Report#force_seo
7. http://www.crmz.com/Report/ReportPreview.asp?BusinessId=18378033