STRATEGIC MANAGEMENT

PROJECT

Market Leader In
Indian Paints
Industry

SECTION D: GROUP 7
Anirudh Gupta PGP/20/199
Aravind Paranthaman PGP/20/201
Shivangi Sahu PGP/20/240
Suraj BobadePGP/20/243
Swapnil Kelshikar PGP/20/245
Vishal Yadav PGP/20/251
 Industry Overview
Recent Market Market share
History Market trends
Developments Segmentation
The Indian paint The Indian paint The unorganised Indian per capita
industry was industry has begun sector controls paint consumption
initiated in 1902 to look more like around 35% of the is 3.34 kgs PA as 10% 3%
when Shalimar the FMCG industry paint market, with compared to global
paints set up its where branding, the organised average of 15 kgs 16%
first factory in distribution sector accounting The industry has 53%
Kolkata strength and for the balance. In grown at a CAGR of
Historically, it has innovative use of the unorganised 12.9% from 2011- 18%
grown close to 1.2 technology have segment, there are 12 to 2014-15 in
times of GDP become decisive about 2,000 units terms of value with
growth aspects of growth having small and highest growth
Governments medium sized paint witnessed for
sharp focus on manufacturing Exterior and
infrastructure: plants Interior emulsions Asian Paints Berger Paints
Make in India The split of in the decorative Kansai Nerolac Akzo nobel
Housing for All; decorative paint paints category Shalimar Paints
Smart CiLes market to industrial and Auto refinish
Mission Sagarmala market is around and Powder
Project; 75-25 coatings in the
BharatMalaProject; industrial paints
Rurban Mission category
The Indian paint
market is expected
to reach Rs.70,875
crore by 2019-20
from around
Rs.40,300 crore in
About Asian Paints
Amongs
t
worlds
top 10
Started demand
using forecast
mainfra ers
me PCs- Market
algo & leader
models since
for 1967
demand
forecast Started in
s (1970) 1942 as
Asian Oil
and Paints Venture
Company d into
Delayed
home
different
dcor,
iation
bathroo
strategy
m
,
Ranked fittings
Signatur
18 on and
e Stores
Forbes modular
Worlds kitchens
Most
Innovati
ve
Compan
ies
 About Asian Paints (contd)
HIGHLIGHT
INNOVATIONS S
16 new
Portable water tank lining without products in
lead and mercury 2013-14
Paints
'Sword of
Royale Play Protective Coating Wall
Honour'

PRODUCTS
Hydrophobic and Oleo phobic; Coverings
Best in class washable walls
Textures
High performance Red Oxide Ask Aparna
Primer corrosion resistant up to Painting Aid
1.5 hours in accelerated tests and
up to 1000 hours in coastal areas
Adhesives
Waterproofi
ng
 Porters Analysis
Buyers Power End consumers have numerous options in the
organised and well as unorganised market
Moderate to Supply far exceeds demand
However, technology and expertise is in hands
high of suppliers Porters 5 forces analysis
Suppliers Suppliers of titanium Dioxide have higher
bargaining power due to its shortage
Power- Industry is raw material intensive and hence
industry profits fluctuate due to raw material
Moderate prices

Brand presence and robust distribution

Threat of new network is a key requirement which is capital
intensive
Entrants-Low Continuous innovation and RnD is necessary
and hence makes it difficult for new players to
compete efectively
Threat of Top 5 players compete for same market
segments (Decorative and industrial)
Substitutes- Real differentiation in products is low (Price,
quality etc)
High
Total SCORES

Rivalry- 80 % of the current market is dominated by

top 5 players
Moderate to However, market growth gives room for all
industry players to flourish and compete
high

Most renowned brand- Indian
paints
Market leader (54.10% market
share)
Strongest distribution network
(SCM and ERP/HANA
implementation)
ROI of AP: 40%; Industry
average: 22%
Strong financials
Industrial paints
Colour Idea Stores
Home dcor and improvement
Budgetary allocation in
infrastructure (Indian
Railways up gradation and Road
improvement)
SWOT Analysis
Limited market share in Industrial
Paints (15%) and Auto sector (20%)
Slow international business
Stiff competition (Kansai Nerolac
and AkzoNobel)
Seasonal demand may lead to CF
S W problems
No tie-ups with auto/industrial paint
segment
O T Threat of slowdown- impact on
construction industry
Unorganized sector commands 35%
market share
Excessive dependence on RM
prices- command 60% cost
 Four Pronged Strategy
DEFEND
Existing markets, rural and urban,
Defend these existing markets by
STRENGTHENING their core
competencies.
DISCOVER
Process of ACQUISITION to enter
into new markets which are
similar to India
eg: APCO, a company in South
Pacific Island,
Berger, an england company
became part of AP
DEEPEN
Weak presence in Industrial
Segment.
Hence, ACQUISITION strategy:
Tie up with PPG to gain access to
automotive segment, and got
clients like Santro, GM, Ford.
DEVELOP
Created SERVICE SIDE of paint
industry.
To acquire the whole supply chain
and become a full service
provider
eg: color world, they sent
messages to customer to repaint
and upgrade.
 Operational Strategy
INTERMEDIARIES:
Though could become a bottle
neck, made them
AMBASSADORS, a marketing
arm of the company. (painters,
decorators, designers, decorators)
URBAN:
1. Entailing a service to a large
masses.
2. Necessitate the creation of a
well qualified service to
PREMIUM customers.
3. Increasing the PULL for the
product from customer side would
reduce the power fo
intermediaries. Online color
consultancy
RURAL:
Service related wont work.
Product related was chosen.
Offerig a basic product to cater to
the low willingnes to pay by the
user.
Post this, higher products can be
offered.
DELAYED DIFFERENTIATION:
Postponed the TINTING operation
at the dealer end so that large
number of customers can be
served without increasing the
number of SKUs at factory.
 Supply Chain Management

Responsive and efficient

1998: Restructured and created different business units

Created an entirely new position VP Supply chain

Early users of IT: Reduced forecast error, safety stocks,

freight costs
i2 Technologies and Enterprise Resource Planning (ERP)
from SAP

Agile Procurement, Production and Delivery.

Quality of Execution is the strength: Sabyasachi Patnaik,

GM(DBM)

INTERNATIONAL STRATEGY:
Controlled R&D only in India.
All 23 Manufacturing Plants
controlled by the corporate office in
India.
ABSOLUTE CONTROL
1.
Organization Structure
MULTI DOMESTIC / LOCALISATION
STRATEGY
The group operates in different
names in different countries. eg:
Asian paints in South Asia, SCIB in
Egypt, APCO coating in South
Pacific.
CUSTOMIZED product to the market
manufactured using LOCAL RAW
MATERIALS.
Tight centralized control

2. Emphasizes functional expertise,

3. Relatively lean managerial staff

4. Global product divisions operate as profit centres

5. Provides a direct line of communication from customer

6. Helps R&D to work on development of products that serve the world
customer
7. Permits managers to gain expertise in technical and marketing aspects of
products
 Vision & Current Strategy
Core
Competencies: Competitive Advantage: John Kays
Be the largest
Coatin coating - Strong brand equity IBAS Framework
It has repeatedly excelled as the first
g company in - Widest distribution mover by thinking differently
Product Innovation: SKUs, Washable
Asia & network
Vision emerging - Efficient operations
Innovation Distemper (1950s)
SCM: Regular payment performance
markets - Working capital discount 3.5% (Shopkeepers), Cash
management Discount 5% (Dealers)
Create a
Home Consistent focus on advertising as early
home
Improve as 1950s with modifications as per
ment improvemen customer needs
t business & Brands & Gattu, the mischievous kid launched as
beat the top Reputation Asian Paints mascot in 1954
Indian In 2012, change in logo to flowing ribbon
players creating ap which signifies easy flow,
smoothness & dynamism
Creating a unique working culture that
Triple the nurtures talent Lowest attrition rate,
Turnov bind by intellect, motivation levels & work
er turnover coming
ethics
from Architectu Using IT to improve competitive
international, advantage SCM (i2 software), Working
industrial &
re Capital Management, ERP implementation
home Creating a genuine independent BoD
improvement with right qualification and experience to
help shape the firm
business
Wide geographical spread of Supply
Chain networks Manufacturing plants,
Strategic depots &dealers
Assets Relationship with dealers through non-
transaction initiatives extending credit
period, mutual trust
 Marketing Strategy Offline Channels
Manufacturing is
Inspiration: the Objective is to give the customer well
first tab in their a touch and feel of their products complemented
website before taking a decision about by the wide
Benefits before their purchase range of
Products services
provided
Signature Color
Stores Academy
Color Idea store
with variety of
samples and
customized
experiences

Color Offers the best

Consultant for training facilities
expert advice for to both new and
each customer experienced paint
applicators
 Marketing Strategy Media Channels
Celebrity Endorsements / TV
Digital Marketing Campaigns
Commercials
Saif Ali Khan in
Royale Play ads Saroj the Leader
short movie shows the
saying No to Nice story of the first all
but go for the women paint
extraordinary applicator team

Born to Decorate
Royale Play Innovative Twitter and
campaign with youth Facebook contests to
engage customers as
icon Deepika they browse
Padukone
#
Ranbir Kapoor MakeRoomForTheNEU
cooing raag malhar Promotes the new
range of Royale Play
saying Baarish features true stories of
Aane Do with women who beat the
Ultima Protek range odds to create
something new in their
 Future Strategy
1. Automotive Paints:
- The automotive paint market in
India is anticipated to grow at CAGR
of 10.42% during 2014-19 [1]
- Greenfield and Brownfield
automotive projects worth USD 10 Bn
are currently either under
implementation or in pipeline
- OEMs: Ashok Leyland, Bajaj Auto,
M&M, Maruti Suzuki, etc
- Competitors: Kansai, Berger and
AkzoNobel
Risk
Chan - 30% of the raw
nel Channel: materials are
- Major players: auto petroleum-based
Produ OEM and authorized products
auto service stations
cts Primer & Base - Slight fluctuation in
Coat: - Unorganized sector: petroleum prices
to local garages,
- Primer and base vehicle body builders affects the price of
Focus Two Wheeler and coat are the two and small automotive automotive paint
Passenger Car: prominent automotive component suppliers.
- Major segments in paints consumed in
Indias automotive automotive paint
paints market industry in India
- Contribution: 3/4th of
the overall automotive
paint consumption in
 Future Strategy
2. International growth by Strategy: Manuf
Acquisition (Related Acquisitions can act-
diversification): be the company's uring
route to Plants
- Asian Paints, a major blue-chip South Asia: Indian,
achieving
investment proposition, is known for Srilanka, Bangladesh
leadership in the
quality South East Asia:
international
- The international environment is very market Singapore, Indonesia
important for industries directly depending South Pacific: Fiji, Tonga
on imports or exports
Middle East: Dubai,
- Import 20% materials from South Africa, Oman, Egypt
Germany, Dubai, etc by appointed different
agents Caribbean: Jamaica,
T&T, Barbados
- Operate in 19 countries (26 paint
manufacturing facilities), servicing Africa: Ethiopia
consumers in 65 countries

- The first such - Acquisitions - Acquired 30% Risk

Chemicals

Philippines
Co.

Inc.
Boy Philippines
& Co.

SCIB Chemicals

Inc.
move was the of controlling stake in Dutch
takeover of stakes in Boy - Currency Risk
Forsyth &

Delmege Berger Philippines due to

Delmege Forsyth

Forsyth & International Incorporated, a international

Co., the Limited, Philippines transactions
& SCIB

Dutch Boy
second largest Singapore in based - Poorly matched
company in Sri 2013 and SCIB company
Delmege

partner
BIL &

Dutch
Lanka, 1999 Chemical, - The turnover
Egypt - Cultural
BIL

- Acquisition of the group in

amount: Rs. - Acquisition 2008 was $215 differences
3.6 Crore amount: US$ million
 Future Strategy
3. Home Improvement (Unrelated
diversification):
- In 2013, acquired Sleek Group organized
modern kitchen space
- In 2015, acquired front end business ESS ESS
a player in bath fittings segment
- Motive is to protect the paint mom-and-pop
stores from disruptive technology
4. Value Added Service (VAS) vs Do-it-
Yourself (DIY):
- Cost of labor in painting a home has increased
from 10% in 1980 to 65% in 2016
[Labor cost 10% CAGR, Paint price 3% CAGR]
- In future, more sense to buy paint and paint
yourself a trend in developed countries
- Else, employ labor for a value added service
which requires expertise

Risk VA DI
Dcor consulting Do-it-Yourself:
- Brand dilution due to
unrelated diversification
S services: Y - DIY friendly paint
- Experience Stores, packages with easy
- Increased
Color Ideas Stores, to use equipment,
administrative burden
Royale Play easy disposal, etc
- Develop new (textured paints) - A unique
competencies and
Improve experience for the
resources
efficiency: customer
- Integration issues Challenges:
- Faster/Cleaner/ Tiring, dirty,
Organized paint cumbersome, lack
projects of uniformity in
quality
mom-and-pop one-
store stop-
shop
 References
1) https://www.asianpaints.com/
2) India Automotive Paints MarketForecast and Opportunities, 2019 - TechSci Research report
[https://www.techsciresearch.com/news/259-indian-automotive-paint-industry-anticipated-to-grow-at-a-cagr-of-10-
42-till-2019.html]
3) Equity Research Report - Ambit Capital
[http://reports.ambitcapital.com/reports/Ambit_Asian_Paints_ChangeinStance_Seventyyearsofexcellence_04Jan20
16.pdf]
4) https://markets.ft.com/data/equities/tearsheet/forecasts?s=ASIANPAINT:NSI
5) http://indiacsr.in/saroj-transformed-her-life-with-asian-paints-colour-academy/
6) http://brandequity.economictimes.indiatimes.com/news/advertising/say-no-to-nice-asian-paints-royales-new-ad-
urges-viewers/48516574
7) https://www.asianpaints.com/more/colour-academy.html
8) http://brandequity.economictimes.indiatimes.com/news/digital/asian-paints-new-campaign-asks-you-to-make-
room-for-the-neu/48957402
9) https://www.socialsamosa.com/2013/07/social-media-strategy-review-asian-paints/
) Supply Chain Management, by Janat Shah, Book
Thank you!!