ASIAN PAINTS BUSINESS STRATEGY ANALYSIS

CLEAR GOALS FOR A CLEAR FUTURE

Founder of Asian Paints

Champaklal H. Choksey Chimanlal N. Choksi

GENESIS OF PAINT INDUSTRY

First paint Industry Shalimar Paints, Colour Varnish Company, !he paints "as #enerally imported $rom the %ritain Due the &nd "orld "ar many 'ompany entered in India like (oodlass )all*+,+-., /lephant 0il 1ills *+,+2. Asian Paints 3ansai Nerola' 'ame into pi'ture a$ter the post independen'e Paints "ere 'onsidered as a lu4ury item 5o" used in Industrial se#ments !here "as a ne#ative #ro"th in industry and pri'e "as elasti' Introdu'tion o$ li6erali7ation poli'y

 Demand $or auto paints shot up suddenly Rapid industriali7ation aided 6y (overnment8s li6eral poli'ies resulted the #ro"th o$ the paint industry

NATURE OF INDUSTRY

Indian Paint industry, estimated to 6e a Rs.&+,999 Cr. industry, #ro"in# at a rate o$ a6ove +:; $or the past $e" years.

 Factors responsible for the growth

In'reasin# level o$ in'ome and edu'ation In'reasin# <r6ani7ation In'reasin# share o$ or#ani7ed se'tor Development o$ the Realty, Automo6ile and In$rastru'ture se'tor In'reasin# Penetration in the Rural 1arkets

Indian Paint Industry

De'orative Paints*20;.

Industrial Paints*>9;.

Premium Ran#e *Hi#h end A'ryli' /mulsions.

1edium Ran#e */namel Paints

Distemper Ran#e* 5o" end Paints.

Automo6ile Se'tor *a6out &?>rd share.

Consumer Dura6les 1arines Paints 0ther 0/1@s

1etros Small Cities 5ar#e Cites

Su6 = ur6an Rural Areas

Domestic market De'orative 29; industrial >9;. Globally market De'orative :9; industrial :9;.

GENESIS OF ASIAN PAINTS

+,,9= Present
Spreads it 6oundary Completed 29 years :th lar#est de'orative paint 'ompany in the "orld Admired 'ompanies in India 1arket leader o$ paint industry

+,B2=+,-: +,A&=+,B:
Company stated its 6usiness the mis'hievous kid "as 6orn Name "as India@s leadin# paint 'ompany Converted into a pu6li' limited 'ompany /ntered into a 'olla6oration a#reement

PESTEL ANALYSIS
POLITICAL FACTOR
India, the lar#est demo'ra'y in the "orld

!he #overnment is $ederal repu6li' !he politi'al situation is more or less sta6le in nature /4port oriented /'onomy

!CO"O#IC FACTOR

1arket 6ased e'onomy

Se'ond $astest #ro"in# e'onomy in the "orld India is the third lar#est in term o$ pur'hasin# po"er In$lation rate is B.B& as on Canuary &9+> Introdu'tion o$ FDI in $e" se'tors

OCIAL FACTOR
India is the se'ond lar#est populated e'onomy in the "orld Rise in pri'e o$ ra" material Import o$ ra" material

T!C$"OLOGICAL FACTOR
/mer#in# o$ I! se'tor 1oderni7ation o$ paint like *"aterproo$ paints, !e$lon 'oatin#, 'reatin# 'olours shops et'.. 5ead $ree paints

!"%IRO"#!"TAL FACTOR
Impa't o$ volatile or#ani' 'ompounds *V0Cs. 5ead $ree paints Season and 'limate 'han#es

L!GAL FACTOR
Pollution Control 5a" Consumer 5a" Health and Sa$ety 5a" /nvironmental 5a"

PORTERS 5 FORCES ANALYSIS

&ARGAI"I"G PO'!R OF &()!R

Household users =
The contractors D Hi#her 6ar#ainin# po"er sensitive more pri'e

The end customer * Num6er o$ options are availa6le De'isions are made 6ased many $a'tors

Industrial users =
A lo" mar#in hi#h revenue 6usiness !he 6uyers kno"led#ea6le Pri'e 'omparison is done e$$e'tively 6y the 'onsumers

&ARGAI"I"G PO'!R OF (PPLI!R

Ra" material intensive industry 1ore than >99 produ'ts reEuired to manu$a'ture o$ the $inal produ'ts 1any Cate#ories
Pi#ments additives Solvents %inder et'.

Pi#ments 'onstitute a6out +?>rd o$ the total ra" material 'osts. Titanium dioxide is one key pi#ments "hi'h is $a'in# a #lo6al shorta#e supply.

CO#P!TITI%! RI%ALR)
A6out -9; o$ the or#ani7ed market is 'atered 6y the top $our players o$ the industry. !he 'urrent market #ro"th rate provide ample room $or all the players o$ the industry to $lourish. Competition may in'rease as the market #ets saturated. !he presen'e o$ the unor#ani7ed market does provide room $or 'ompetition

A%AILA&ILIT) OF (& TIT(T!

5ime "ash is 'onventionally used su6stitute $or paints. In de'orative paints se#ments an alternative option is "allpapers.

T$R!AT OF "!' !"TRA"T

!he paint industry in India is dominated 6y $e" players makin# di$$i'ult $or anyone ne" enterin# the industry /sta6lish $orei#n players may pose a threat 6y virtue o$ the kno"led#e and e4pertise

PRODUCT PORTFOLIO

An'illarie s

De'orativ e paints

Industrial Paints

Automo6ile

BCG MATRIX
TAR 1etal?industrial Paints )ood $inishes *varnish, polish. CA $ CO' )all Paints*IN!/RI0R /F!/RI0R PAIN!S. D/C0RA!IV/ PAIN!S +(! TIO" #AR, Distemper Ran#e* 5o" end Paints.

DOG 1arine paints, Automo6ile paints others*6a'k 6oard paints.

SITUATION AUDIT
India@s lar#est paint 'ompany and Asia@s third lar#est paint 'ompany 0perates in +2 'ountries and has &A paint manu$a'turin# $a'ilities in the "orld servi'in# 'onsumers in over B: 'ountries. 0perates around the "orld throu#h its su6sidiaries %er#er International 5imited, Ap'o Coatin#s, SCI% Paints and !au6mans

COMPETITIVE ANALYSIS

2; +9;

#AR,!T $AR!
9;9;

++; Asian Paints %er#er Paints 3ansai Nerola' Ak7o No6el 2+; Shalimar Paints Censon Ni'olso

SWOT ANALYSIS
1arket leader Capa'ity e4pansion plans Pri'in# po"er )ide distri6ution net"ork Industrial 6usiness per$ormin# 6elo" par Hi''ups in international 6usiness International presen'e restri'ted to small po'kets

Fast #ro"in# Indian e'onom Shorter repaintin# 'y'les (ro"th in the tier II and III to"ns Steady #ro"th in industry volumes De'rease in th use o$ distemper

)eaknesses

Stren#ths

0pportunities

CURRENT ISSUES

1arket leader at present. 0verall 'ondition o$ the 'ompany is Euite sta6le. ReEuires a lot o$ ra" materials $or its produ'tion , /uropean 'risis resultin# the pri'es o$ the ra" materials have in'reased 'onsidera6ly. SolutionD Company 'an try to utili7e the domesti'ally availa6le materials to 'ut do"n on the e4tra manu$a'turin# 'ost.

CONCLUSION
Asian Paints, India8s lar#est paint 'ompany and Asia8s third lar#est paint 'ompany, "ith a turnover o$ Rs ,B.>& 6illion. Have an envia6le reputation in the 'orporate "orld $or pro$essionalism, $ast tra'k #ro"th, and 6uildin# shareholder eEuity. 0ver the 'ourse o$ &: years Asian Paints 6e'ame a 'orporate $or'e and India@s leadin# paints 'ompany. Driven 6y its stron# 'onsumer= $o'us and innovative spirit, the 'ompany has 6een the market leader in paints sin'e +,B-.