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The project precisely involved complete and thorough understanding of the strategic evolution of Asian Paints, performing SWOT analysis, analysing the PESTAL factors and Porter’s 5 forces of Indian Paint Industry

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  2. 2. “CLEAR GOALS FOR A CLEAR FUTURE” Founder of Asian Paints • Champaklal H. Choksey • Chimanlal N. Choksi • Suryakant C. Dani • Arvind R. Vakil
  3. 3. GENESIS OF PAINT INDUSTRY • First paint Industry Shalimar Paints, Colour & Varnish Company, • The paints was generally imported from the Britain • Due the 2nd world war many company entered in India like Goodlass Wall(1918), Elephant Oil Mills (1917) • Asian Paints & Kansai Nerolac came into picture after the post independence • Paints were considered as a luxury item • Low used in Industrial segments • There was a negative growth in industry and price was elastic • Introduction of liberalization policy
  4. 4. • Demand for auto paints shot up suddenly • Rapid industrialization aided by Government’s liberal policies resulted the growth of the paint industry
  5. 5. NATURE OF INDUSTRY • Indian Paint industry, estimated to be a Rs.21,000 Cr. industry, growing at a rate of above 15% for the past few years.
  6. 6. • Factors responsible for the growth – Increasing level of income and education – Increasing Urbanization – Increasing share of organized sector – Development of the Realty, Automobile and Infrastructure sector – Increasing Penetration in the Rural Markets
  7. 7. Indian Paint Industry Decorative Paints(7O%) Premium Range (High end Acrylic Emulsions) Medium Range (Enamel Paints Metros & Large Cites Industrial Paints(30%) Distemper Range( Low end Paints) Sub - urban Small Cities & Rural Areas Domestic market Decorative 70% industrial 30%. Globally market Decorative 50% industrial 50%. Automobile Sector (about 2/3rd share) Consumer Durables Marines Paints Other OEM's
  8. 8. GENESIS OF ASIAN PAINTS 1990- Present 1967-1985 1942-1965 • Company stated its business • the mischievous kid was born • Name was Asian Paints • India's leading paint company • Converted into a public limited company • Entered into a collaboration agreement • Spreads it boundary • Completed 70 years • 5th largest decorative paint company in the world • Admired companies in India • Market leader of paint industry
  9. 9. PESTEL ANALYSIS POLITICAL FACTORS – – – – India, the largest democracy in the world The government is federal republic The political situation is more or less stable in nature Export oriented Economy ECONOMIC FACTORS – – – – – Market based economy Second fastest growing economy in the world India is the third largest in term of purchasing power Inflation rate is 6.62 as on January 2013 Introduction of FDI in few sectors
  10. 10. SOCIAL FACTORS – India is the second largest populated economy in the world – Rise in price of raw material – Import of raw material TECHNOLOGICAL FACTORS – Emerging of IT sector – Modernization of paint like (waterproof paints, Teflon coating, creating colours shops etc.) – Lead free paints
  11. 11. ENVIRONMENTAL FACTORS – Impact of volatile organic compounds (VOCs) – Lead free paints – Season and climate changes LEGAL FACTORS – – – – Pollution Control Law Consumer Law Health and Safety Law Environmental Law
  12. 12. PORTER’S 5 FORCES ANALYSIS BARGAINING POWER OF BUYERS Household users – The contractors : Higher bargaining power & more price sensitive – The end customer : Number of options are available Decisions are made based many factors Industrial users – A low margin high revenue business – The buyers knowledgeable – Price comparison is done effectively by the consumers
  13. 13. BARGAINING POWER OF SUPPLIERS – Raw material intensive industry – More than 300 products required to manufacture of the final products – Many Categories • • • Pigments additives Solvents Binder etc. Pigments constitute about 1/3rd of the total raw material costs. Titanium dioxide is one key pigments which is facing a global shortage supply.
  14. 14. COMPETITIVE RIVALRY – About 80% of the organized market is catered by the top four players of the industry. – The current market growth rate provide ample room for all the players of the industry to flourish. – Competition may increase as the market gets saturated. – The presence of the unorganized market does provide room for competition
  15. 15. AVAILABILITY OF SUBSTITUTES – Lime wash is conventionally used substitute for paints. – In decorative paints segments an alternative option is wallpapers. THREAT OF NEW ENTRANTS – The paint industry in India is dominated by few players making difficult for anyone new entering the industry – Establish foreign players may pose a threat by virtue of the knowledge and expertise
  16. 16. PRODUCT PORTFOLIO Ancillaries Decorative paints Industrial Paints Automobile
  17. 17. BCG MATRIX STARS QUESTION MARKS • Metal/industrial Paints • Wood finishes (varnish, polish) • Distemper Range( Low end Paints) CASH COW DOGS • Wall Paints(INTERIOR & EXTERIOR PAINTS) • DECORATIVE PAINTS • Marine paints, Automobile paints & others(back board paints)
  18. 18. SITUATION AUDIT • India's largest paint company and Asia's third largest paint company • Operates in 17 countries and has 24 paint manufacturing facilities in the world servicing consumers in over 65 countries. • Operates around the world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and Taubmans
  19. 19. COMPETITIVE ANALYSIS MARKET SHARE 0% 0% 8% 10% Asian Paints 11% Berger Paints Kansai Nerolac 71% Akzo Nobel Shalimar Paints Jenson Nicolso
  20. 20. • Industrial business performing below par • Hiccups in international business • International presence restricted to small pockets Opportunities • Market leader • Capacity expansion plans • Pricing power • Wide distribution network Weaknesses Strengths SWOT ANALYSIS • Fast growing Indian econom • Shorter repainting cycle • Growth in the tier II and III towns • Steady growth industry volum • Decrease in the use of distempe
  21. 21. CURRENT ISSUES • • • • Market leader at present. Overall condition of the company is quite stable. Requires a lot of raw materials for its production , European crisis resulting the prices of the raw materials have increased considerably. Solution: Company can try to utilize the domestically available materials to cut down on the extra manufacturing cost.
  22. 22. CONCLUSION  Asian Paints, India’s largest paint company and Asia’s third largest paint company, with a turnover of Rs 96.32 billion.  Have an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity.  Over the course of 25 years Asian Paints became a corporate force and India's leading paints company. Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968.