Submitted ByChaithra.G

(U.S.N.No.- 11PI1MBA39)

Under the Guidance ofProf. Murali murti

(FACULTY)

PES Institute of Technology100 Feet Ring Road, BSK III Stage,

Bangalore-560085

pesit Page 1

pesit Page 2

TABLE OF CONTENTS

Sl. No Chapters Page No.

1. Introduction 2

2. Module 1 : Strategic Management 4

3. Module 2 : Strategy Formulation 5

4. Module 3 : External Environment 8

5. Module 4 : Resources & Competitive Position 13

6. Module 5 : Generic Strategy 15

7. Module 6 : Grand Strategies 17

8. Module 7 : Strategy Implementation 20

9. Module 8 : Strategic review 22

10. Conclusion 23

11. Bibliography 24

pesit Page 3

INTRODUCTION

Asian Paints is India's largest paint company and the third largest paint company in Asia today, with

a turnover of Rs 96.32 billion. The company has an enviable reputation in the corporate world for

professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 22

countries and has 30 paint manufacturing facilities in the world servicing consumers in over 65

countries. Besides Asian Paints, the group operates around the world through its subsidiaries Berger

International Limited, Apco Coatings, SCIB Paints.

The Company's paint business in India consists of Decorative, Industrial & Automotive

coatings.. Decorative paints include wall finishes for interior and exterior use, enamels, wood

finishes and ancillary products, such as primers and putties. Industrial Coatings comprise high

performance coatings, powder coatings and auto refinish coatings. The automotive coating segments

are catered to by the joint venture Asian PPG Industries Ltd. The Company also has chemicals

businesses consisting of phthalic anhydride and pentaerythritol manufactured at Ankleshwar, Gujarat

and Cuddalore, Tamil Nadu, respectively.

The Indian paint market is highly saturated with many paint companies with varieties of

product. Kansai Nerolac paints Ltd. Berger paints India Ltd. ICI India Ltd. Shalimar Paint Ltd,

Snowcem India Ltd are the main competitors of Asian Paints. Among them Nerolac Paints have a

very good market share in the Industrial Paint segment.

Asian Paints adopted some marketing objectives & strategies. Asian paint is ready to

achieve its corporate objective by taking care of the Customers, Employees, Brand image, Dealer

Vendor relationship & technology. Company’s three divisions are not equally performing well. So it

has different objective & planning to gain the top most position in the Indian paint market. Asian

Paints has different marketing strategy for the urban as well as the rural market in India.

The company always maintaining some alternate strategy & keeping in track with the

strategy maintaining by its competitor. In decorative sector company is strong enough, but it need to

take care of the Industrial sector so as to increase the overall sales.

Considering the pricing strategy of Asian paints, company has several priced products. It

starts from very low end to the premium level. Asian paints Colour World concept helped the

consumer to choose the colour combination & other appropriates according to their wish from a very

wide range of product. Company’s famous logo GATTU helped it overcome while entering into the

rural market, as visualization has its own effect. Other than this Asian Paints is using its website as a

pesit Page 4

very good medium to reach the high/upper middle class consumers. With these tools company is

expecting to generate much more revenue than the earlier years.

Asian paints wonderful promotional strategy helped the company to extend its business in

several other countries with success. A very attractive distribution policies & proper distribution

channel with more than 15000 dealers helped Asian paints to spread its business in more than 3500

big & small cities in India.

The company used to maintain a very strong market research cell, which helps them to take

care of the consumers need & intensify their R&D accordingly. Asian Paints approaches the

environment issue from the perspective of waste minimization and conservation of resources. Thus,

the continued attempt is to reuse, recycle and eliminate waste, which results in less and less waste

being generated.

Asian Paints took a huge stride towards promoting the cause of total water management by

giving Mumbai (and neighboring districts like Thane) its first Total Water Management (TWM)

Centre, which is located in the premises of Asian Paints manufacturing facility at Bhandup.

ACHIEVEMENTS

Awarded as SWORD OF HONOUR by British safety council for all paint plants in India

Ranked 24th amongst the top paint companies in the world by Coatings World-TOP Companies Report 2006

Forbes magazine ranked Asian Pints among top 200 “Best small companies of the world” in 2002

Received the earnst n young ‘entrepreneur of the year-manufacturing ‘award in 2003

In 2009 micro site Asian Paints.com won the ‘outstanding website’ award in consumer goods category

pesit Page 5

MODULE 1: STRATEGIC MANAGEMENT

SALIENT FEATURES

Asia’s No 1 paint company It is the first company to have supply chain management solution from i2 technologies

The company has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity.

The company used to maintain a very strong market research cell, which helps them to take care of the consumers need & intensify their R&D accordingly

Business strategy of Asian paints

pesit Page 6

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

MISSION

To be the largest decorative paint company worldwide and to be the 5th largest paint manufacturing company worldwide

Management Philosophy

Customer Satisfaction.

Always invest in Latest Technology.

Huge Distribution Network Creation.

Constant focus on Cost Control & Quality.

Invest in Managers & Develop People Skills.

Social Welfare - A Priority.

pesit Page 7

pesit Page 8

DISTRIBUTION

Asian paints have an extensive distribution channel throughout the country. It used to

maintain unique channel from the manufacturer to the customer. Distribution system at Asian paints :

-

1. Multiplant Distribution setup.

Neither geographic nor product specific.

Offers flexibility & variable cost advantages

2. Servicing has been key competitive advantage.

3. Around 15000 dealers serviced from around 85 sales location.

4. Role of distribution department is to ensure timely product availability at these locations at

minimum cost.

The company ahs 4 manufacturing facilities & more than 2800 stock keeping units (SKUs) These are

supported by 6 regional distribution centers, which cater 55 deposits. Each depot is having branch

manager for supervision over more than 15000 dealers in more than 3500 small & big cities in India.

Asian paint implemented & concisely improving its IT systems over the years. It has already

linked all sites & Depots through V-SAT technology, which helps them to monitor constantly & has

given benefits in streamlining the distribution channel.

Asian paints also implemented 12 solutions to increase its networkings & solutions, which is

a very good replacement of ERP.

pesit Page 9

SUPPLY CHAIN OF ASIAN PAINTS

SUPPLY CHAIN

Asian paints has harnessed the powers of state-of-the art supply chain system using cutting edge technology to integrate all its plants, regional distribution centers and branches in India. Asian Paints has six manufacturing locations all over India and 70 sales branches. Each of the manufacturing plants makes different products. The distribution system is taken care by area sales managers and executives. The executives keep canvassing the market and meeting the dealers to get the orders. Asian paints has around 15000 dealers who are catered to by the sales executives. The orders are collected by the sales executives and passed on to the nearest depot. The depots are fed by regional warehouses. These depots maintain a minimum order quantity which is arrived at from the monthly demand forecast. The material is dispatched from the depot in the name of the dealer. Generally some orders of the same region are clubbed together and dispatched in trucks. Finally the truck is unloaded and the small orders of the dealers are dispatched to them. The sales executives are also responsible for the collection of outstanding. Generally paint companies allow a maximum outstanding of 2-3 lakhs for 45 days. Other jobs of the sales team consist of grievance redressal and customer feedbacK

pesit Page 10

Module 3 : Company’s External Environment

Industry Analysis

pesit Page 11

Market Share Analysis :

The market share clearly shows that Asian paint is the leader in Indian paint industry. The nearest

competitors of Asian paints are Nerolac & Barger paints. Asian paints has the largest sells in

Decorative paints.

Nerolac paints being widely used in Industry it has a greater share price value. Industries like

Bajaj auto limited, Maruti Udyog & many other car manufacturing companies use Nerolac paints.

The Industrial paint are priced with premium in comparison to the decorative paint which is

mainly used in house hold decoration.

Berger paints & ICI paints are also providing a shift competition to Asian Paints in decorative

paint, but still there is no sign of threat from them.

Again in the Industrial sector Nerolac paint far ahead of all its competitor. Asian paint

presently building up a new manufacturing unit solely to produce Industrial paint.

pesit Page 12

Module 4 : Company’s Resources & Competitive Position

SWOT Analysis

A) Strengths:

Market share: Asian paints have 35% of overall market share when compared to other paint

companies like nerolac,berger,ici etc

Strong inventory control: Asian Paints have been always on an upper hand when compared to

others in terms of inventory management. The inventory cost for Asian Paints is lowest in the

industry. Asian Paints average inventory level equals only 28 days sales, while the industry

average is 51 days sales. This right away provided a 45 per cent edge in inventory costs to Asian

Paints compared to its competitors

Widest product range: Asian paints offers many products ranging different shades colours and

choices

Comprehensive nationwide coverage of the market: Asian paints is best known in almost all

parts of the country with its best distribution channels. Its product is avaible in rural areas also

B) WEAKNESS

Seasonal demand and hence in off season it can lead to cash flow problems

Weakness on the technology front in industrial paints: asian paints are nt well versed in

industrial paint when compared to others

pesit Page 13

C) OPPORTUNITIES

Industrial paint sector

Capturing foreign markets

Mergers/acquisitions/joint ventures etc.With the competitors

D) THREATS

Competition have gone in for hi-tech instacolour spot mixing

Domination of few foreign companies

Competition is catching up fast ,hi-tech facilities gives abundant choice

pesit Page 14

Module 5 : Generic Competitive Strategies

ASAIN PAINTS follows the differentiation strategy.

Value provided by unique and value characteristics

Command premium price.

High customer service.

Superior quality.

Product variations, wide selection, features

More value for money- Value Added Services

Pursue quality with zeal

Innovate value for customers

The access to high raw materials that are suitable for production of paints provides them with a

competitive advantage. From enhancing the domestic footprint, the company had taken steps to go

beyond national boundaries

Asian paints- MERGERS AND ACQUISITIONS

Asian paints ltd acquired 50.1% stake in Berger's international ltd,a holding company

incorporated in Singapore

As a part of its strategy to transform itself to a global player,asian paints acquired

Taubmans,promoted by Axo noble for 1.42 million dollars in 2003

Asian PPG bought ICI India unit for 520 million rupees in 2007 expanding its presence in

India

International operations

Asian Paints operates in 17 countries across the world. It has manufacturing

facilities in each of these countries and is the largest paint company in eleven of these markets. Asian

Paints operates in five regions across the world . The countries that Asian Paints has presence are as

follows:

pesit Page 15

1. Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka).

2. SCIB Paints in Egypt.

3. Berger in South East Asia (Singapore), Middle East (UAE, Bahrain and Oman), Caribbean

(Jamaica, Barbados, Trinidad & Tobago).

4. Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands and Vanuatu).

5. Taubmans in South Pacific(Fiji and Samoa)

Joint venture of Asian paints

APL along with PPG Inc,USA one of the largest automotive coatings manufactures in the world has

a 50:50 joint venture, Asian PPG Industries to service increasing requirements of the Indian

automotive coatings market. PPG will take lead in APPG in order to utilize their respective strengths

to best capture the growth in infrastructure development and globally driven markets in India.

APPG currently services the Indian transportation coatings market and this change will

expand its scope to additionally service the industrial liquid, marine and consumer markets. The

second joint venture will service the protective, industrial power, industrial containers and light

industrial coating markets.

pesit Page 16

Module 6 : Long term & Grand Strategies

Sales over the last 6 years (in Rs. crores)

Year 12

months

March

2006

March

2007

March

2008

March

2009

March

2010

March

2011

Gross

sales

1526.01 1662.33 1887.7 2111.08 2366.16 2807.05

Percentage

increasing

- 8.93 13.55 11.83 12.08 18.63

Net sales 1322.38 1450.71 1641.27 1841.92 2037.55 2433.37

Parentage

increase

- 9.7 13.13 12.22 10.62 19.42

Net sales & operating income of stand alone entity increased to Rs.24333.7 million from 20375

million showing a growth of 19.42% in the year 2010-2011 (March).

This is driven mainly on account of good paint volume sales growth of 13.8% & price

revisions effected during the year. For the group, net sales & operating income shows an income

shows an increase of 17.4% to Rs.30210 million.

Asian Paints has a steady growth over the last 6 years, so the financial condition is very much

stable & it is expected to reach at the top position in the Indian paint market.

pesit Page 17

Module 7 : Strategy Implementation

Corporate social responsibility of Asian paints

Environment and Safety

Asian Paints approaches the environment issue from the perspective of waste minimisation and conservation of resources. Thus, the continued attempt is to reuse, recycle and eliminate waste, which results in less and less waste being generated. Accordingly, our material losses in manufacturing have been reduced substantially over the last few years.Further, the company's four paint plants and the two chemical plants have the ISO 14001 certification for environment management standards. The company's latest manufacturing facility which is situated at Sriperumbudur near Chennai will be certified for ISO 14001 in this financial year 2006-07.All paint plants have achieved 'zero industrial discharge' capability. This has been achieved by the installation of upgraded effluent treatment facilities and installation of reverse osmosis plants in conjunction with appropriate recycling and reuse schemes. their emulsion manufacturing facility has also achieved 'zero waste' status. they have adopted the principles of "green productivity".

Safety at its best

The company has made significant investments in the area of safety over the past several years. It's steadfast commitment to safety is reinforced by the fact that four of Asian Paints plants were conferred with the 'Sword of Honour' by the British Safety Council for the second time in quick succession.  The British Safety Council is the world's leading occupational health, safety and environmental organizations, working closely with the world's leading companies in developing safe systems for work. The "Sword of Honour", instituted by the BSC, is recognized the world over as the pinnacle of achievement in safety management.

Total Water Management

"Water is precious. Every drop counts."Asian Paints has built a Total Water Management (TWM) Centre, at its Bhandup manufacturing facility, which is the first of its kind in the entire country.The TWM centre showcases live working models on water conservation and rainwater harvesting.Asian Paints provides expertise to citizens free of charge to implement rainwater harvesting and total water management solutions.The water management schemes could be designed in phases, so investments are not significant. Also a payback period can be determined for investments.

pesit Page 18

Age Care

Age Care is another focus area of Asian Paints in its CSR activities. The company had earlier conducted various health camps for the aged. However, in India, the focus of such health camps has always been around the plants where the employees reside. Taking this into consideration, Asian Paints has started MMU (Mobile Medicare Unit) in Kasna, Patancheru and Ahmedabad. MMU made it possible to reach the doorsteps of the needy and provide treatment for various diseases like hypertension, arthritis, diabetes etc. Also, the company had conducted camps on eye care, dental care, blood checkup among other

Other Initiatives

Improving infrastructure and healthcare at local schools

Besides water management and age care, the company also invests time and energy in providing infrastructure support to primary schools. In Ankleshwar - Gujarat, the company continues to support the "Shree Gattu Vidyalaya" school which was established along with the Ankleshwar Industrial Development Society in 1983. The school today boasts of around 2,500 students in primary as well as secondary sections and the plant has sustained its commitment of providing infrastructure support to this school, be it through donations of computers, tables and chairs, or through assistance in other maintenance work for the school.

Tsunami relief: Helping community in need of time

The massive disaster Tsunami hit the coastal areas of South India and South East Asia on Dec 26, 2004 and left behind a trail of devastation. As a socially responsible company, Asian Paints rose to the occasion and decided to play its rightful role in extending support and relief to the affected. All the employees contributed in cash and kind to the best of their capacity. These contributions were supplemented with a contribution from the company. A total amount of Rs. 4.7 million was generated as relief aid and handed over to the Tsunami victims. Besides India, all the units across the world also contributed to the best of their capacities towards Tsunami relief.

Corporate Information

pesit Page 19

MODULE 8: STRATEGIC REVIEW AND AUDIT

pesit Page 20