PESTEL ANALYSIS INDIA 1 Presented By Akshata Acharekar Nilofer Khan Deepavali Vankalu
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PESTEL ANALYSIS INDIA
Presented By
Akshata AcharekarNilofer KhanDeepavali Vankalu
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Political Factors
India is the biggest democracy in the World.
The government type is federal republic.
The political Situation in the country is more or less stable.
State politics have been dominated by several national parties including the INC, BJP, the Communist Party of India (CPI), and various regional parties.
Export oriented Economy
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Economic Factors
The economic factors in India are improving continuously.
Market based economy Second fastest growing
major economy in the world.
Strong domestic market There is a continuous
growth in per capita income.
India has the third highest GDP in terms of purchasing power.
Foreign direct investment rose in the fiscal year.
Inflation rate is on a higher side
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Social Factors
India is the second most populous nation in the world with an approximate population of over 1.1billion people.
An increase in the purchasing power the Indian consumer which preferred local brand which is far cheaper is now able to get a taste of the relatively expensive market.
31.8, 32%
63.1, 63%
5.1; 5%
Population
0 - 14 years15 - 64 years65 years and above
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Technology
India is Known as a emerging leaders in the IT sector.
State of art R & D facility, Manpower is available.
Minimum efficient production level and influence outsourcing decisions
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Environmental factors
Include weather, climate, and climate change
May especially affect industries such as tourism, farming, and insurance.
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Legal factors
Include –
Discrimination law
Consumer law
Antitrust law
Employment law
Health and safety law
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Asian Paints is India's largest paint company
Ranked among the top ten Decorative coatings companies in the world
Turnover of INR 7750 crore ($1.73 Bn)
Asian Paints along with its subsidiaries have operations in 17 countries across the world
Consist of 23 paint manufacturing facilities
Servicing consumers in 65 countries through Berger International, SCIB Paints – Egypt, Asian Paints, Apco Coatings and Taubmans
INTRODUCTION
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TAG LINE
“EVERY COLOR TELLS A STORY”
HISTORY
1st February, 1942: Armed with little knowledge and great determination, Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil get together to manufacture paint in a garage on Foras Road, Bombay.
1945: Asian Paints touches a turnover of Rs. 3,50,000.
Cont ….
1954 Asian Paints mascot, Gattu, the mischievous kid, is born.
1957 – 66The family-owned company makes the transition to a professionally managed organisation.
1967 Asian Paints emerges as India's leading paint company ahead of any international competition.
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Asian Paints has won many awards & recognitions which include
Forbes rated it under 200 'Best Small Companies of the world' in 2002 and 2003 and amongst the top 200 'Under a Billion Firms' of Asia in 2005, “Best small company in India” by Asia Money in 2002.
“Golden peacock environment management award” national quality award by union labour ministry.
“Five star rating” by British safety council in 2003 & 2005.
Awarded the "Sword of Honour" by the British Safety Council for all the paintplants in India. This award is considered as the pinnacle of achievement in safety across the world.
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Cont……
Ranked 24th amongst the top paint companies in the world by Coatings World – Top Companies Report 2006.
The Asset - one of Asia's leading financial magazine ranked Asian Paints amongst the leading Indian companies in Corporate Governance in 2002 and 2005.
Received the Ernst & Young "Entrepreneur of the Year - Manufacturing" award in 2003.
VISION
Asian Paints aims “to become one of the top five Decorative coatings companies world-wide by leveraging its expertise in the higher growth emerging
markets”. Simultaneously, the
company intends “to build long term value in the Industrial coatings business
through alliances with established global partners”.
INTERNATIONAL PRESENCE
South Asia- Caribbean region
- South East Asia
- South Pacific
Middle East
Caribbean region
Asian Paints operates in 5 regions across the
world viz.
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The five corporate brads
Asian Paints
Berger International
SCIB Paints
Apco Coatings
Taubmans
Growth drivers
•Bangladesh •China•Egypt•Malaysia•Myanmar•Singapore•Sri Lanka•Thailand•UAE•Growth Drivers
Market Leaders
•Jamaica•Barbados•Trinidad & Tobago•Bahrain•Nepal•Fiji•Solomon Islands•Vanuatu•Tonga
Focus forTurnaround
•Australia•Mauritius•Oman•Malta
INTERNATIONAL MARKETS
GROUP SUBSIDARIES
Apco Coatings is a subsidiary of Asian Paints in the South Pacific islands. Asian Paints operates in Australia, Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco Coatings.
Asian Paints Industrial Coatings Limited has been set up to cater to the powder coatings market which is one of the fastest growing segments in the industrial coatings market.
. In November 2002, BIL became a part of the Asian Paints Group.BIL has presence across three regions viz. Middle East, Caribbean and South East Asia.
Cont…..
Founded in 1979, SCIB Paints today is a reputed name and ranks amongst the top five paint companies in Egypt. SCIB Paints became a part of the Asian Paints group in August 2002
Asian PPG Industries Limited, a joint venture between Asian Paints (India) Limited and PPG Industries, Inc. USA with 50:50 equity sharing was established in March 1997
Taubmans Paints Fiji, the fourth largest paint company in Fiji, became a part of the Asian Paints family in September 2003.
THE NEW ASIAN PAINTS GROUP
71%
5%
24%
Asian paint group
Paints - IndiaChemical - IndiaInternational
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Business Profile
segments
Paint
Decorative Paints
Industrial Paints
Chemicals
Phthatic Anhydried
Penraerythritol
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• Wall Finishes• Exterior Finishes• Enamels• Wood Finishes
Decorative
Paints
• Powder Coatings• Protective Coatings• Road Marking Coatings
Industrial
Paints
MARGINS STRATEGY
R & D efficiencies &Sourcing efficiencies
Control on overhead costs
Marginexpansiondespiteinputpriceincrease
GROWTH STRATEGY AND M&A
Growth Strategy: To increase sales growth rate of the group beyond past levels using a two-pronged
approach:Market Share Gain
Market Expansion
Organic
Growth
International M & A’s
Domestic M & A’s Inorga
nic Growt
h
INTERNATIONAL MARKET - STRATEGY
• To enter the high-growth emerging markets
• Adopt a regional hub approach to international operations
• Apply the emerging market business model:– Introduce new products suited to local needs– Introduce new technology, accordingly– Focus to improve all areas of operations, especially supply chain
M&A INTERNATIONAL - OPPORTUNITIES
Asian Paints believes there is plenty of scope to achieve significant presence in targeted countries
• Niches/segments available for Asian Paints in these markets
• Vast potential exists for Asian Paints, as most paintcompanies in these markets operate sub-optimally
viz., in Supply chain, manufacturing, technology & marketing
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CORPORATE GOVERNANCE
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The Corporate Governance philosophy of the Company is based on the following principles:
Satisfaction of the spirit of the law through ethical business conduct
Transparency and a high degree of disclosure levels
Truthful communication about how the company is run internally
A simple and transparent corporate structure driven solely by the business needs
Strict compliance with Clause 49 of the Listing Agreement as amended from time to time
Establishment of an efficient corporate structure for the management of the Company's affairs
Management is the trustee of the shareholders' capital and not the owner
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COMPETITIVE ADVANTAGE
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MANUFACTURING CAPACITY AND VOLUME
Asia
n Pa
ints
Kans
ai N
erol
ac
Berg
er P
aint
s
Shal
imar
0
50000
100000
150000
200000
250000
300000
350000
400000
354150
153900
157946
43000
282602
99130
138179
39161
Installed Capacity (tones)Production (tones)
80%
87%64%
91%
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Dealer Network & Reach
•Over 14500 direct dealers as opposed to 7000 of our nearest competitor
•Over 35% of the dealers do business only with APIL
•67 sales locations situated all across the•Country
APIL GNP Berger ICI
15000
7000
4500
3700
Retail outlets directly serviced
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RETAIL INITIATIVES
Asian Paints has fostered a
customer-centric approach to business.
Consumer-centric initiatives
• Asian Paints Home Solutions- Offers a “painted surface” vs. just “paint”– Aimed at controlling the quality of end product– Overcomes major “barriers to purchase/consumption”– Good response from the market; present in six cities
Asian Paints Helpline– Toll free access to the Helpline– High conversion rate into actual sales
Cont….
Colour World machines– 3175 machines installed till February 1, 2003– 827 machines installed under arrangement with Citibank– Colour World dealers make more than 50% of sales
Prediction of colour trends in India
The launch of Kids World
Royale Play
Do-It-Yourself mode
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CSR
Environment and safety.Improving infrastructure and
healthcare at local schools; adopting school education.
Total water management.Age care.
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Environment and Safety
Reuse
Recycle
Eliminate waste
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SUCCESS STORY
Information Technology
Asian Paints is the first company in India to have integrated Supply Chain Management (SCM) Solution from i2 Technologies, and Enterprise Resource Planning (ERP) solution from SAP.
Asian Paints has launched a supplier portal that includes an automated digital document exchange facility
An employee portal
Customer Relations Management (CRM)
Investment in I.T.
• Benefits:– RM & FG inventory reduction– Revenue Increase by avoiding retail shorts– Reduction in dead & slow moving stock– Plant through-put improvement
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FAILURE STORY
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Asian paint to exit from Thailand and China.
Already sold stakes in two loss making units in Hong kong and Malaysia.
Study conducted by the CSE’s Pollution monitoring laboratory found the Apcolite (Asian paint) sample with lead much higher than the standard.
Research and Development (R&D)
R&D efforts have been focused on developing new exterior finishes, economy emulsions and distempers.
R & D / INNOVATION STRATEGIES
Developing new products and innovations
Reducing costs by value re- engineering of formulations
Research and Development (R&D) Structure
In India, the company's has :
140 strong R&D team
7 doctorates
115 qualified scientists
R&D new developments
The development of the water based wood polish which is odourless and is of same quality as of solvent based polish.
The company is also in the process of setting up a new R&D centre near Mumbai (India)
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TODAY
Asian Paints becomes the 10th largest decorative paint company in the world.
Asian Paints is more than twice the size of its nearest competitor.
It is one of the most admired companies in India.
Present in 22 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAP - ERP & i2 - SCM solution.
On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself into Growth, Decorative and International business units and adopted SCM and ERP technology.
Asian Paints aims to become the 5th largest decorative paint company in the world.
FUTURE OUTLOOK
To further improving the operations.
Plans to launch new products in line as:- Introducing Water – based Paints- Repositioning of existing Brands in Rural Market- Broadening of Distribution Network- Adding more choices for shades and effects- Enhancing Better Quality- Demand will be generated through the new constructions coming in housing and industries
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THANK YOU