STRATEGIC STUDY OF GLOBILISATION OF BUSINESS

INTRODUCTION

International business is the process of focusing on resources of the globe and

objectives of the organisations on global business opportunities and threats. The
post world war 2 period witnessed an unexpected expansion of domestic companies
into the international companies. The post 1990s period has given greater fillip to
international business. Conducting and managing international business operations
is a cruel venture due to variations in political, social, cultural and economic factors
from 1 country to another country.

Trading Blocks and WTO helps to understand the strengths and weaknesses of an
international firm and the opportunities provided and threats posed by the
international business environment. Therefore, there’s a need for understanding the
global strategic management. Strategic management is concerned with deciding on
strategy and planning how that strategy is put into effect. Global strategic
management is action oriented. All the managers are active players in this process.

INTERNATIONAL STRATEGY

Firms that pursue international strategy try to create value by transferring valuable
skills and products to foreign markets. An international strategy makes sense if the
firm has a valuable core competence and if the firm faces relatively weak pressures
for local responsiveness and cost reductions. In such situations, an international
strategy can be very profitable. There are three types of international strategy:

1) Multidomestic strategy: firms pursuing a multidomestic strategy orient

themselves towards achieving maximum local responsiveness. They customize
with their product offering and marketing strategy to match different national
conditions. A multi domestic strategy makes most sense when there are high
pressures for local responsiveness and low pressures for cost reductions.
Weakness associated with this strategy is that many multi domestic firms have
developed into decentralized federations.

2) Global strategy: firms that pursue a global strategy focus on increasing

profitability by reaping the cost reductions that comes from experienced curve
effects and location economies thus, they pursue a low cost strategy. Global
firms tend not to customize their product offering and marketing strategy to
local condition because customization raises cost. Instead, they market a
standardized product worldwide so that they can reap maximum benefits from
economies of scale. This strategy makes most sense where there are strong
pressures for cost reductions and where demands for local responsiveness are
minimal. These conditions are found in industrial goods industries but are not
found in consumer goods markets where demands for local responsiveness
remain high.

3) Transnational strategies: this strategy makes sense when a firm faces high
pressure for cost reductions, high pressures for local responsiveness and where
there are significant opportunities for leveraging valuable skills within a
multinational’s global network of operations. To survive in the global market,
firms must exploit, experience based cost economies and local economies. They
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 must transfer core competencies within the firm, and the must do all of this
while paying attention to pressures for local responsiveness.

GLOBALIZATION OF AN EXISTING BUSINESS

Interdependence and integration of individual countries of the world is called

globalization. The globalization integrates not only economies but also societies.
The globalization process includes globalization of markets, production, technology
and investment. However globalization has two important components, one is
globalization of market and other is globalization of production. Today, a company
can view the entire world as one country for its business operation. In fact the
businessmen were doing their operations even in the past. History indicates that
business operations were existing across the countries even in the old days.
Therefore the concept of global business is as old as civilization. Crossing national
and political boundaries for the purpose of business may be called as globalization.
Globalization has the following features:

1) Planning and operating to expand business throughout the world.

2) Removing the differences between domestic and foreign markets.

3) Buying and selling goods and services from one country to another in the world.

4) Establishing manufacturing and distribution facilities in different parts of the

world base on the feasibility and viability.

5) Product planning and development are based on market consideration of the

entire world.

6) Factors of production and inputs like raw materials, machinery, finance, labor,
managerial skill are taken from the entire world.

7) Global orientation in strategies, organizational structure, organizational culture

and managerial experience.

8) Setting the mind and attitude to view the entire world as a single market for
business.

Multinational companies plan for their business not only in national markets but also
venture in globally and view themselves as a global company. Employees of such
companies are trained in worldwide operations. They make investment based on
the feasibility of world-wide projects and procure raw materials, human-resources
and other inputs from the various parts of the world where they are available at low
prices and good quality.

GLOBALISATION PROCESS

Globalization of business does not take place in one phase. It takes gradually
through an evolutionary approach. Thus the following are the stages in
globalization.

1) A domestic company exports to foreign countries through dealers or agents.

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2) A domestic company then exports to foreign countries on its own.

3) Slowly the domestic company becomes an international company by

establishing production and marketing operation in different countries of the
world.

4) After some time, the domestic company replaces the foreign company in the
foreign country with all the facilities including research and development and full
fledged with qualified human resources.

5) Finally the domestic company becomes a true foreign company by serving the
needs of foreign customers just like a host Countries Company serves.

Many companies pass through different stages of globalization. There are many
companies which has international businesses since their very beginning including
100% export oriented companies. The development of their international business
passes through different stages of evolution. A company which is entirely domestic
in its activities normally passes through different stages of globalization before they
become a truly global company. However, in case of many companies, the initial
attitude towards international business is passive and they get into the international
business in response to some external influence.

A company may start exports on an experimental basis and if the results are
satisfactory, it would enlarge the international business and in due course of time, it
would establish offices, branches or subsidiaries or even joint ventures abroad. The
expansionary process may also be characterized by increasing the product mix in
the market segments, markets and countries of operation. In the process, the
company could be expected to become multinational. Thus, in many companies,
overseas business initially starts with a low degree of commitment and involvement
but they develop a global outlook and embark upon overseas business in a big way.

Why globalization?

When the domestic markets do not promise a higher rate of profits, the companies
search for foreign markets which promise for higher rate of profits. Some of the
domestic companies expand their production capacities more than the demand for
the product in the domestic countries. These companies are forced to sell their
excess production in foreign countries. There is a severe competition in the home
country. The weak companies which could not meet the competition of the strong
companies in the domestic countries, start entering the foreign markets. Again,
when the size of the home market is limited either due to the smaller size of the
population due to the lower purchasing power of the people, the companies
globalize their business operations. For example, most of the Japanese automobile
and electronic companies entered United States, Europe and even African markets
due to the smaller size of the home market in Japan. Similarly, ITC has also entered
the European market due the lower purchasing power of the Indians with regard to
high quality cigarettes.

Advanced technology and managerial competence I some countries also act as

pulling factors for business firms from the home countries. Companies from the
developing world are attracted by the developed countries due to these reasons.
Some of the large scale business firms would like to enhance their market share In
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the global market by expanding and intensifying their operations in various foreign
countries. Companies also think to go global due political instability in the home
market, nearness to availability of market, and availability of good quality labor at
cheaper cost. Most of the countries in the world have liberalized their economies
and opened their countries to the rest of the world which has attracted the
multinationals to extent their operations to these companies. Before globalization
there were high tariff and duties on imports in many countries to protect the
domestic companies. Therefore to avoid tariffs and quotas, companies preferred
direct investment to go globally.

Business expansion strategies Management and expansion of international

business is a crucial venture due to the various political, social, cultural and
economic factors which vary from country to country. The business houses need
accurate information to make an appropriate decision. The size of the business
should be large in order to have impact on the foreign of the business should be
large in order to have impact on the foreign economies. An organization dealing in
international business should have a vision. The corporate vision has the potential
power to focus the collective energy of insiders and to give outsiders a better of
what an organization really is. Every organization comes into being and exists to
accomplish something in the larger environment and that purpose or mission which
is on enduring statement of purpose that distinguishes one organization from other
similar organizations. These organizations define the fundamental reason for their
existence in terms of a mission statement. Organizations exit to satisfy a particular
need of the society or to fulfill a particular deficiency of the global society. There is
also a policy which is a general statement or understanding that guides channel
thinking and action in strategic decision making.

Business strategy is a unified comprehensive and integrated plan that relates to the
strategic advantages of the firm to the challenges of the environment. It is
designated to ensure that the basic objectives of the enterprise are achieved
though proper execution by the organization. Strategic management of a global
company is different from that of a domestic company due to its peculiarities. It is
concerned with deciding on strategy and planning how that strategy is put into
effect. International strategic management is concerned with the flow of goods and
services across the countries. It deals with the opportunities, threats, challenges
and risks in the international business.

IMPORTANT BUSINESS EXPANSION STRATEGIES IN THE INTERNATIONAL BUSIESS ARE AS

FOLLOWS

Licensing or franchising:
Licensing involves minimal commitment of resources and effort on the part of the
international organization. These are the easy ways of entering the foreign markets.
Under the international licensing, a firm in one country permits a firm in another
country to use its intellectual property. The monetary benefit to the licensor is the
royalty or fees which the licensee has to pay. In many, countries such fees or
royalties are regulated by the Government which normally does not exceed five
percent of the sales in many developing countries. A licensing agreement may also
be one of the cross licensing in which there is a mutual exchange of knowledge or
patents. In a cross licensing cash payment may or may not be involved. Franchising
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is a form of licensing in which a parent company grants another independent entity
the right to do business in a prescribed manner. This right can take the form of
selling the franchiser’s products, using its name, production and marketing
technique or its general business approach. One of the going trends has been
trademark licensing. A number of foreign companies have entered the Indian
market both in consumer and industrial markets, by licensing. International
licensing and franchising have grown substantially. E.g.: McDonalds

EXPORTING : The most traditional mode of expansion of foreign market is exporting.

International trade has been growing much faster than the world output resulting in
greater world economic integration. Exporting is an appropriate strategy when the
volume of foreign business is not large, and licensing is not a better alternative. It is
also used when the cost of production in the foreign market is high and there is
political and other risk involved in the foreign country. Exporting is also attractive
when underutilized capacity exists. Exporting makes the first stage in the evolution
international business of many companies. As the international business grows or
the environment changes or to expand business further it may become necessary to
change the strategies.

Contract Manufacturing: Under contract manufacturing, a company doing

international marketing contracts with firms in foreign countries to manufacture or
assemble the products while retaining the responsibility of marketing the product.
This is a common practice in the international business. In the case of contract
manufacturing the company does not require to commit resources for setting up
production facilities and there is no risk of investing in foreign countries. The cost of
product is lower and therefore it is a less risky way to expand business. It may also
enable the international firms to enlist national support. However, there is a loss of
potential profits from manufacturing and there is less control over the
manufacturing process. There is a risk of developing potential competitors.

Management contracting: In case of management contracting the supplier brings

together a package of skills that provides an integrated service to the client without
incurring the risk and benefit of ownership. Thus, management contracting is a low
risk method of getting into a foreign market and it start yielding income right from
the beginning. This type of arrangement is attractive, if the contracting firm is given
an option to purchase some shares in the managed company within a stated period.
Management contracting brings additional benefits for the managing company. It
also enables a company to commercialize existing know-how that has been built up
with significant investment. Management contracts can provide organization skills,
expertise and management assistance to their clients. However, management
contracting may prevent the company from setting up its own operations for a
particular period. This arrangement may not be sensible if the company can put
their scarce talent to better use.

Turnkey contracts: A turnkey operation is an arrangement by the seller to supply

a buyer with a facility fully equipped and ready to be operated by the buyer’s
personnel who will be trained by the seller. The arrangement is used in fast food
franchising when a franchise agrees to select a store site, build the store, equipped
it, train the franchise and employees and sometimes franchising also. These
contacts are common in international business in the supply, erection and
commissioning of plants, construction projects etc.
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Assembly operation: Assembly operations represent cross between exporting and
overseas manufacturing. Having assembly facilities in foreign markets is very ideal
when these economies of scale in the manufacture of parts and components and
when assembly operation are labour intensive and labour is cheap in the foreign
country. Products meant for domestic marketing can also be assembled abroad. It
has an advantage of low cost and low import duty on parts and components than
the finished product. This also satisfies the local content demand to some extent.
The investment to be made in the foreign countries is very small in comparison with
that require for established complete manufacturing facilities. There is no much
political risk of foreign investment.

Joint ventures: Joint venture is a common strategy of entering the foreign market
any form of association which implies collaboration for more than a transitory period
in the joint venture. In case of joint venture the ownership and agreement are
shared between a foreign firm and domestic firm. Sometimes there are more than
two parties involved a joint ownership may be brought about by a foreign investor
by buying an interest in a local company. A local firm acquiring an interest in an
existing foreign firm or by both the foreign and local entrepreneurs jointly from a
new enterprise. It is also common practice to split the local interest between a
partner and various public participation. Such a strategy may enable the
international firm to retain much control despite minority holdings as the power of
the remaining shares is spread out. Further, equity holding by the public would help
the enterprise to get some public interest. Partnership with government
organization may help to obtain favorable treatment from the government. The
important advantage of the joint venture is that it permits a firm with limited
resources to enter more foreign markets than might be possible under a policy of
forming wholly-owned subsidiaries. It is possible to swap know-how informing joint
ventures as a mean of securing ownership in foreign operation. The economic
liberalization has cost spurt in joint ventures in India. There are more than 4000
joint ventures entered into Indian Companies and Transitional. Some of them have
failed. The research has shown that the median life span of joint ventures is about
seven years. Thus, joint ventures are not permanent.

Mergers and Acquisitions: Mergers and Acquisitions have been very important
expansion strategy. A merger is an instant access to market and distribution
network. A domestic company takes initiative to take over a foreign company
through takeover code and hence the business of foreign company is merged with
the domestic company. Acquisition is also similar way and a domestic company
acquires business of a foreign company in a similar way. The important objective of
Mergers and Acquisitions id to obtain access to new technology and patent right, it
helps to reduce the foreign competition. Mergers and Acquisitions may give rise to
some problems which arise mostly due to deficiencies of the evaluation of the case
of acquisition. The success of the company will depend upon then strategies used in
solving such problems. Takeover spree also lands several companies in trouble.

Strategic Alliance: This strategy seeks to enhance the long term competitive
advantage of a company by forming alliance with its competitors. The objective of
this alliance is leverage critical capabilities; increase the flow of innovation and
flexibility in responding to market and technological changes. Similarly a company
may enter a foreign market by forming alliance with a company in the foreign
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market for marketing or distributing its products. Strategic alliance, more than entry
strategy, is competitive strategy. It enables companies to increase recourse
productivity and profitability by avoiding unnecessary fragmentation of recourses
and duplication of investment and efforts. Such alliances are normally used in
pharmaceutical, computer, nuclear and telematics industries, which have high fixed
cost in research and development and manufacturing and high and fast chaining
technology.

Countertrade: Countertrade is a form of international trade in which certain export

and import transactions are directly linked with each other and in which import of
goods are paid for by export of goods, instead of money payments. Countertrade
refers to a variety of unconventional international trade practices which link
exchange of goods directly or indirectly, in an attempt to dispense with currency
transactions. Countertrade takes in different forms. One of them is a Barter, which
refers to direct exchange of goods of equal value with no money and no third party
involved in it. The another form is buy back agreement under which the supplier of
plant, equipment or technology agrees to purchase goods manufactured with that
equipment, or technology. Under this scheme, the full payment may be made in
kind or part may be in kind and balancing cash. The third form is compensation deal
under which the sellers receives a part payment in cash and the rest in goods. The
fourth form is counter purchase agreement under which the seller receives the full
payment in cash but agrees to spend an equivalent currency of money in that
country within a specified period. A fine example of counter purchase is Pepsi cola’s
trade with the USSR. Pepsi cola was paid in rubles for the sale of its products in the
USSR but spent this amount for purchase of Russian products like vodka and wine.

Studying the country and company competitiveness

Formulation of corporate level strategies of a global business is different from those

of domestic company. The global company first decides the country to enter and
then formulates the corporate level strategies. Thus, the companies, before
deciding which markets to go should know the risks involved in a nations market.
There are many risks involved in going internationally including shifting borders,
unstable governments, foreign exchange problems, corruption and technology.
Some companies operate in a number of countries while some of them operate in a
few countries with a deeper commitment. Normally, a company should enter the
fewer markets when:

(1) Market entry and market control costs are higher.

(2) Product and communication adaption costs are high.

(3) Population and income size and growth are high in the initial countries
chosen.

(4) Dominant foreign firms can establish high barriers to entry.

The firms can choose to enter the markets with high markets attractiveness, high
competitive advantage and low risk.

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International business firms have the goals of expanding market share sales
revenue and increase in profits. Expanding markets in the overseas countries is one
of the strategies to achieve these goals the firms have alternative markets to enter
in order to analyse the suitable market, the firms have to analyse alternative
foreign markets, evaluate the respective costs, benefits and risks and select the
best alternative market for expansion of business.

The company has to analyse the alternative foreign market by taking the following
factors into consideration.

(1) Current and potential size of the alternative market.

(2) Level of competition the firm will face in each of these alternative markets.

(3) Legal and political environment.

(4) Socio-cultural environment.

The firms have to assess the markets potential based on the following factors:

(1) Size of the population of the country.

(2) Overall GDP and per capita GDP.

(3) Spread of urban and rural areas.

(4) Purchasing powers of the people in that country.

The concentration of the population in urban areas with high purchasing power
provides marketing opportunities for consumer durables like automobiles, washing
machines, refrigerators etc. on the other hand the spread of population in rural
areas with low purchasing power provides marketing opportunities for low-cost
consumer goods. the companies planning to enter global markets should know the
trade policies, legal and political environment of the foreign markets. They should
also consider the socio-cultural factors carefully while deciding to expand business
in foreign markets.

Another step in entering foreign market is to assess cost-benefits and risks

associated with carrying out business in a particular country. The costs to be
considered are direct costs and opportunity costs. Direct costs are incurred in
entering and setting up of operations in the global market. The opportunity costs
are the profits that the company would have earned by entering in the alternative
market. The befits to be considered are higher sales, and profits, lower acquisition
and manufacturing costs, competitive advantage, access to new technology, cheap
labor and other resources in the host country.

Study competitiveness for globalization

Strategic management of a global company requires an understanding and analysis

of international business environment I order to assess opportunities and threats.
The management has to formulate alternative strategies to exploit the opportunities
provided by the environment by using company strengths. Many MNCs having the
strength of technology and the environment of developing countries provide the
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opportunities of high quality and low priced products. Therefore, it is necessary to
study the competitiveness of global business.

The comparative cost theory concludes that the countries can specialize in
producing certain products in which they have the competitive advantage of
producing goods at low cost. It means that the customers in all the countries can
have the goods at low price. comparative cost theory also indicates that the
countries which have the advantage of raw materials, labor, natural resources in
producing particular goods can produce the goods at low cost with good quality.
Thus, the customers in various countries can buy more goods with the same money.
It can enhance the living standard of the people to enhance purchasing power and
by consuming high quality goods.

International business also enhances the consumption level and economic welfare
of the people of the trading countries. it also widens the markets and increase the
market size. Therefore, the companies need not depend upon the demand for the
product in a single country or customer’s tastes and preferences of a single country.
International business provides the chance of exploring and exploiting the potential
markets which are untapped. These markets provide the opportunity of selling the
product at higher price as compared to the domestic markets. Multinational
companies provide the benefit of large scale economies like reduced cost of
production, availability of expertise and quality.

Technology plays a major role in the global business. Some developing countries
expect from the technologically advanced foreign companies assistance to local
entreneurs, establishment of research and development facilities and introduction
of products relevant to the home country. These relationships provide on the job
training to local employees but the overall long term contribution to the host
countries is questionable in the minds of some leaders of developing countries. The
developing world needs labour-intensive technology to solve their problems of
unemployment. Therefore, MNCs should think about the technology appropriate for
the conditions of the host country. Sometimes, technology is developed just
accidentally.

Every country has its own culture. This indicated the generally accepted values,
traditions, patterns of behaviour etc. different social and cultural factors of different
countries may affect the marketing mix for a particular county. Cross-cultural
differences in norms and values require modifications in managerial behaviours.
Social norms that are not well understood by outsiders often affect the business
transaction adversely. These social settings are also the important requirements for
serious business relationships.

Studying company competitiveness

A domestic company may extend its products to foreign markets by exporting,
licensing and franchising. Initially, the exporting is indirect. It may develop a more
serious attitude towards foreign business and move to the next stage of
development. International company is normally the second stage in the
development of a company towards transnational corporation. The orientation of
the company is basically ethnocentric and the marketing strategy is extension. The
marketing mix developed for the home market is extended into the foreign markets
when a company decides to respond to market differences, it involves into the
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stage there multinational that pursues a multidomestic strategy. Multinational
company’s each foreign subsidiary is managed as if it were an independent city
stage. The subsidiaries are part of an area structure in which each country is part of
a regional organization that reports to world headquaters. The transnational
corporation is much more than a company with sales, investments, and operations
in many countries. Such a company is increasingly dominating markets and
industries around the world are an integrated world enterprise that links global
resources with global markets at a profit.
Most of the companies initially start as a domestic firm and transforms into an
international company at the later stage. it also goes on adding new products to its
portfolio and adding new countries to the existing portfolio. The company finds that
the existing mission statement would not be sufficient and therefore it has to
modify it, if necessary. It also changes its goals depending upon the changes in
environment. The global company’s organization includes subsidiaries throughout
the world or export departments in different countries. However, in case of
transitional, each subsidiary is independent and autonomous. They can formulate
strategies on their own. However, the headquarters co-ordinate the strategies of the
subsidiaries.

The analysis of organization structure of a global company includes flat or tall

organization, team structure or individual based structure, strategic business unit
structure or geographical structure. The analysis requires identification of strengths
and weakness of the company with regard to the structure. The marketing analysis
includes the analysis of product, price, promotion and place. The global company
analyses each of these factors in detail and identifies its strengths and weaknesses
in each of the aspect of 4ps. The strategist of the company analysis each of the
areas of production. These areas are sources of material, location of plants, logistic
spread, plant layouts, human resources, quality considerations, cost considerations,
inventory levels etc. the strategist has to analyze each of these factors and identify
the strengths and weaknesses of each of these factors.

The strategies have also to identify the strength and weaknesses for each of the
finance factors such as sources of finance, capital structure and earning per share.
The global company should also analyse each of the human resource factors such
as sources of manpower, skill of employees, cultural compatibility of the employees
with the culture of various countries and cost of employee. Finally, there is a need
for analyzing the international environment in order to find out the opportunities
provided and the threats posed by the environment.

Market research and Data Collection

The proper business intelligence, essential to make all the series of strategic
decisions in international marketing are market selection, entry and operating
decision, marketing mix decision and organization decision. The general subject of
international marketing intelligence includes the collection, processing, analysis and
interpretation of all types of information from all available sources, to aid business
management in making international marketing decision. The marketing research
should be conducted by the company concerned or it may be entrusted to an
external agency like marketing research or consultancy organization etc.

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Marketing research is very essential to keep pace with the changing environment
characterized by the factors of increasing competition, fast technological
developments, changing consumer attitudes and changing tastes and requirements
of people. The basic utility of marketing research is that it helps the company to
identify its problem areas and environmental opportunities and held to monitor the
enviromrent. Thus,the systematic gathering recording and analyzing of data about
problems relating to the marketing of goods and services is known as marketing
research. It is designed to generate and process an information flow to aid decision-
making in a company’s marketing programme.The marketing research helps to
identify the deficiencies in products,prices,promotion and distribution of goods and
services in the international market. It also helps to identify existing and emerging
marketing opportunities. A company can identify the relative strength and
weakness and also monitor the environmental changes. This helps the company to
take appropriate measures to improve and consolidate its position. Thus marketing
research provides vital inputs required for forward planning.

Data collection

The research design specifies the data requirements, sources, methods and
sampling techniques well as sample size.Basically,there are two sources of
information: a)Primary data and b)Secondary data. Secondary data are the data
which have already been gathered by somebody else and are available to the public
for any purpose. Such data may be available in the published for such as book,
periodicals, newspapers, reports etc.Secondary data are available quickly and
easily. However primary data collection is time consuming and costly.

There is a need to prepare data collection forms like questionnaires. It may also be
necessary to pre-test them before data collection stars. There are broadly two
methods of data collection that is observation and survey. The observation may be
done in natural situation. An alternative is to observe the consumer behavior in a
stimulated situation. The observation may be made openly, or through hidden
cameras, one-way mirrors or by disguised observers. The raw data have to be
processed and presented in an appropriate form like tables to make them easily
understandable and analyzable. It should be followed by interpretation which
includes expressing the findings in more meaningful term like percentages and
drawing useful inferences from them

Global expansion strategy: case study of Asian paints:

The Asian oil and paint company was formed in 1942 as a partnership firm by four
entrepreneurs-champaklal choksey, chimanlal choksey, and suryakant dani and
arvind vakil. It was started in a garage rented for Rs. 75 per month. The firm was
converted into a private limited company in 1945 and named as Asian oil and paint
company private ltd. The turnover in that yr was rs 3, 50,000. The company
concentrated on the smaller towns ignored by the multinationals. The company
could increase sales dramatically and made the brand connection in the consumer’s
minds from its inception, it focused on marketing to create greater brand awareness
and to increase its market share. The company embarked on an ambitious
grassroots marketing campaign, partnering with thousands of dealers in small
towns all over India. The marketing strategy was to reach consumers in the
remotest corners of the country in small packs.
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 In 1975, Asian paints achieved a break through when its research and development
department developed a process for producing international quality phenolic and
nucleic acid resins in its simple coal furnaces, with a hand steering process it set up
a plant at bhandup, Mumbai to cater to the growing demand in urban areas. All
those efforts enabled the Asian paints to achieve the brand leadership position in
the Indian paint industry by1967.

In 1969 the company extended its research and started selling overseas. In 1973 it
became a public limited company and changed its name as asianpaints limited. The
focus on product innovation continued and the company completed phased
modernization of the resin manufacturing facilities. During the period 1982-86 the
company entered into a collaboration agreement with Nippon paints company
limited,japan to obtain technical know-how to manufacture powder coatings and coil
coatings under an exclusive lisence.asian paints was also seen to be a company
that made paints such as distemper, ordinary enamel and emulsion paints for the
masses.

In 1987, it undertook backward integration to reduce production cost and entered

into a joint venture with Tamil nadu industrial development corporation- pantasia
chemicals ltd. For manufacture of pentaerythritol and sodium format for
manufacturing paints with the liberalization the company moved aggressively into
international expansion through many joint venture projects. Asian paint (south
pacific) ltd., in Fiji an Asian paints (Tonga) ltd.,were the two joint ventures set up
with the company supplying the necessary knowhow. The company also set up two
more joint ventures under the name and style of Asian paints (Nepal) ltd., and Asian
paints(S.I.) ltd. In 1955, pantasia chemicals ltd. was merged with the company.

There was a revamp of various management processes through a restructuring

exercise. The initiatives included launch of Asian paints helpline, launch of retail
shops and investing in technology to improve supply chain efficiency. The company
has classified different regions into three broad categories-

A) Growth market

b) Leader shipment market

c) Turnaround market.

Asian paints has come a long way in the journey of over 53 years to become one of
the top global paints company with 11th position in the decorative paints market in
the world. It is the India’s largest paint company and a market leader in decorative
paints. Asian paints are the only company in India to have won the prestigious
economic times-Howard business school association of India award on two separate
occasions. The company now operates in 24 emerging markets countries scattered
over mostly emerging markets in south Asia, the middle east, east Asia, the south
pacific and Caribbean.

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