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Ballari Institute Of Technology And Management

Case Analysis

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Presented By:

Bhavana.HHimanshi.GoelJagadish.YJBasan Gowd

IntroductionAsian paints started in 1942.

Asian Paints is India’s largest company and ranked among the top ten Decorative in the world with a turnover of INR 66.80 billion.

Asian Paints along with its subsidiaries have operations in17 countries across the world with 23 manufacturing facilities.

Servicing consumers in 65 countries through Berger International, SCIB Paints – Egypt, Asian Paints, Apco paintings and Taubmans.

CASE FACTS:Asian Paints (India) Limited has a value of Rs.560 crore.

In March 1994, the company notched up a gross sales turnover of 10.8 percent over previous year.

A growth of 31.5 percent over previous year in net profit.

Some of the future plans of the company are diversification, expansion of its product ranges, line extensions, collaborations and joint ventures.

Cont….

The paint industry comprises both of organized and unorganized players.

Asian Paints has a market share of 19 percent.

The nearest competitors for Asian Paints are

Goodlass Nerolac, Berger Paints and Jenson

and Nicholson.

Cont….

The comparison of net sale and net profit of nearest competitors are:

(Figures in Rs. Crore for 1993-94)

COMPANY Net Sales Net Profit NET PROFIT/SAL

ES (%)

Asian Paints

401.96 25.62 6.36

Goodlass Nerolac

205.88 8.05 3.91

Berger Paints

174.95 3.24 1.85

Jenson & Nicholson

110.33 1.97 1.72

Garware Paints

106 2.57 2.33

Shalimar Paints

102.59 1.60 1.56

Bombay Paints

37.81 0.03 0.08

SWOT ANALYSIS:

STRENGTHS:

Extensive Distribution Network .Wider Segment Coverage .Willingness of the company to go for expansion of operations, product range and also the technology.Proper planning and comprehensive approach.Differential Pricing Strategies.

Cont….

WEAKNESS:Uneven prices have helped the unorganized competitors grab a significant chunk of the market.Dependences on foreign firms for import of technology.

OPPORTUNITIES:Government regulation -Budget Concessions.Demand for industrial paint applications is latent.Establish a foothold in the International markets.

Cont…

THREATS:

Unorganized sector is eating away the market share of the companyCompetition from other organized players and also threat from importsMeet the growing demand of the organization in terms of the workforce, the technology and also the assets.Meet the growing demand for the product and has to create greater awareness for their newer products.

CASE ISSUES:

What corporate goal has the company adopted for the next few years and with what strategies does the company propose to realize the above goal?

The corporate goal of the company is to achieve the growth rate that is higher than 9 to 10 percent that the industry is averaging.

1. Expansion of the product range.2. Introduction of niche products in industrial

paints area.3. Line extensions.4. Expansion of production capacity and

continuous modernization of technology.5. Diversification into unrelated area of

ceramics.6. Increasing its presence in overseas market

with its various subsidiaries.

Cont…

What threats is the company facing or/and might face in the future? What has it done and/or what could it further do to safeguard itself from threat(s)?

a) Threats the company may face in future:

Company is facing major threat from the unorganized sector.

Growing demand of the products . Awareness for newer products. The growing demand of the organization in

terms of the workforce, technology and also the assets.

Cont…

b) The ways the company is trying to safeguard its interest from threat are:

Collaborations with foreign firms for modernization and up gradation of technology and assets .

Entry into lower end segments in order to grab large market share.

Company is focusing at increasing its market share, and working hard in order to retain it.

Company has entered into the industrial paint applications, where demand for product is still latent.

Cont…

Evaluate the new strategies of Asian Paints (India) Limited, particularly its proposed foray into ceramics?

Utilization of existing distribution network . Serve an existing customer base. Paints and ceramics are quite related

products. Foreign collaborators for the technology. Rs. 70 crore investment in the first phase Plant location near Gujarat and Rajasthan. Collaborations with foreign players.

Cont…

What action plans has the company proposed to strengthen its product base?

The action plans proposed by the company to strengthen its product base are :

Line extensions. Expansion of the product range Expansion and modernization of

production capacity. Diversification.

Cont…

Classify all the strategic plans or proposed strategic actions of the company for achieving growth against suitable headings, example diversification, joint ventures, etc.,

Classification of the strategic plans is as follows:

Diversification into the area of ceramics. Foreign collaborations for technology. Joint Venture unit in Townsville (Australia)

has helped the company to establish its foothold in international markets.

Subsidiaries in overseas market . Product range and line extensions where

new brands such as ‘Utsav’.

CONCLUSION

Asian Paints has been able to sustain the stiff competition.The impact of recession was also not huge on the company. Against all the odds, the company is able to maintain its leadership position in the market. All these facts prove that the strategies followed by the company are helping the company to achieve its goals and objectives efficiently and effectively.