Asian Paints Business StrategyPresentation Transcript
Analysis of Business Strategy Asian Paints
To Provide the business strategy for Asian paints
To compare the same with other competitors for India centric business.
BRAND LEADERSHIP MODEL:ASIAN PAINTS OVERVIEW: ASIAN PAINTS India's largest paint company One of the top ten decorative coatings companies in the world. Started by four entrepreneurs, Champaklal Choksey, Chimanlal Choksi, Suryakant Dani and Arvind Vakil Turnover: INR 0.35 million(1945) to 54.3 million(2009) PM Murthy( MD & CEO) a) 1942-1967: Evolution Phase b) 1967-1982: Extension and Consolidation Phase
c) 1982-1986:The years of Excellence
d) 1987-1997:Moving Closer to the Consumer
e) 1997-1999: Changing rules of the game
f) 1999- 2007: The new Asian Paints
Industry Analysis: Porters 5 force Model
Market Share Identification Of Focus Area of Competitor
Entry of Global Players in Paint Industry: Recent JV agreements
Overall Corporate Strategy: Asian Paints DISCOVER DEVELOP NEW MARKET OPPORTUNITIES DEEPEN DEFEND Build Complementary/new competency to fortify position in Existing Market EXISTING EXISTING NEW Distinctive Competencies
DEFEND: Consists of rural and the urban market in which AP is playing. They are a target to many global companies, which are playing in Indian market via Indian arm of their operations like ICI has Berger, Kansai has JN DEEPEN: Industrial segment of Indian paint industry where AP has a weak presence. It has a presence in automotive segment but ranks a poor second. It needs to form alliances with foreign players to enter into this segment. It can also look for tie-ups with the company, which have tie-ups with those companies whose daughter arm is operating in India, to lock the account. Its move of taking over Haucoplast is one step in this direction. Their tie-up with PPG has given them a good presence in automotive segment, capturing clients like Santro, GM, Ford etc
DISCOVER: this forms the basis of fast growth. AP has identified opportunities abroad in developing countries similar to India. To enter into these countries they adopted the process of acquisition. DEVELOP: Paint industry is primarily a product-oriented industry up till now. Huge potential exists in the service side also. Introduction of color-world, providing service in painting and interior decoration etc are steps taken to acquire the whole chain and becoming full service provider. Need to Ensure value-adding services are possible. These can be integrated to provide an umbrella service. .Constant reminders to the customers to repaint, or upgrade.
Business Strategy: Asian Paints AP has acquired short-term competitive advantages by using its distribution strength and logistical efficiency in order to raise the Cost of doing business for all its competitors to attain this advantage. The advantage is short-lived and ultimately imitable. Moreover, AP has established such an extensive network that getting incremental advantage would be very difficult. Futuristic approach should be gaining competitive advantage through channel control or occupying mind space.
Business Strategy: Urban Market Industry is characterized by the presence of intermediaries who have a very high influencing power on the purchase decisions of the consumer, especially in the urban areas. Asian Paints strategy for acquiring higher product demand could be three pronged. 1. Use these intermediaries for initiating demand: The intermediaries (the painters, contractors, designers, decorators etc.) could be used as a marketing arm of the company. 2. Occupy part of the intermediary space and try to sideline other intermediaries: Asian Paints should open a service arm, which would provide the services provided by the existing intermediaries in the market. Being present in different seditions of the value delivery system and having a strong brand equity in the Paints market would give AP the credibility to operate a strong service arm. The service based strategy of AP could have two different approaches
The first approach would entail creating a service arm that can cater to a large market
The second one would necessitate the creation of a well-qualified service arm which is capable of providing value-added services.
AP can follow both these approaches and cater to different market segments. The value-addition services arm would cater to the premium end of the market who have a very high willingness to pay and the other bundling services arm would cater to the demands of the masses. 3. AP could try to reduce the power of the intermediary by increasing the Pull for the product. The role of the influencer could be drastically reduced by increasing the power of the end-consumer. AP can achieve this by establishing a strong brand name for its brands.
Business Strategy: Rural Market Rural segment not mature enough to appreciate service related offerings Strategy should be product related. Customer up gradation strategy should be adopted. It should be Implemented in two parts. 1. The penetration of the rural segment have to be achieved by offering a basic product well tailored to match the low willingness to pay of the rural consumer. After basic penetration levels have been achieved the rural consumer can be offered a “higher ” range of products with a view to up grading the consumers.
Business Strategy: International Markets For the newly Acquired Global Companise Utilization of the learning curve effect and the knowledge base from having functioned in a developing country would be the most crucial factor for growth. AP can hasten the process of market growth and maturity in these regions by leveraging on its experience and launching newer products at a faster rate.