Table of Contents

Asian Paints Ltd ...................................................................................................................................... 1

Strategy for Globalisation ...................................................................................................................... 1

1. International Strategy ............................................................................................................ 1

2. Multi domestic/localisation strategy .................................................................................... 2

The corporate strategy of Asian Paints ................................................................................................. 2

Asian Paints as a Value Chain ................................................................................................................ 3

Primary Activities ........................................................................................................................... 3

Supporting Activities ...................................................................................................................... 4

Porter’s Five Forces Model Analysis ...................................................................................................... 5

Indian Scenario ............................................................................................................................... 5

Scenario in Middle East (Egypt, UAE, Bahrain and Oman) ........................................................... 6

Entry Strategies ...................................................................................................................................... 7

Joint Ventures ................................................................................................................................. 7

Greenfield Ventures ....................................................................................................................... 7

Acquisitions .................................................................................................................................... 8

Mergers ........................................................................................................................................... 9

Strategic Alliances .......................................................................................................................... 9

Organisation of International Business of Asian Paints ........................................................................ 9

Bibliography.......................................................................................................................................... 11

1

Asian Paints Ltd

Asian Paints Limited is an Indian chemicals company headquartered in Mumbai, India. It

manufactures paints for decorative and industrial use. Asian Paints is India's largest paint

company and Asia's third largest paint company. Asian Paints operates in 17 countries and has

23 paint manufacturing facilities in the world servicing consumers in over 65 countries. Asian

Paints manufactures a wide range of paints for Decorative and Industrial use. Along with that

the company also provides home painting services and solutions. Among Asian Paints’

international businesses, while the Middle East contributes the lion’s share at 51% to revenue,

the Caribbean contributes 14%. Asia and South Pacific contribute 27% and 8%, respectively.

Strategy for Globalisation

Asian Paints group operates in 17 countries across the world and is the largest paint company

in eleven countries. The group operates in five regions across the world viz. South Asia, South

East Asia, South Pacific, Middle East and Caribbean region through the five corporate brands.

The strategy followed by Asian Paints for globalisation is a mix of both International strategy

and Multi domestic/localisation strategy.

The points supporting this claim is as follows:-

1. International Strategy

All the research and development centres of the company is in India. Asian

Paints have a Research & Technology centre at Turbhe on the outskirts of

Mumbai. PPG Asian Paints, the subsidiary of Asian Paints Ltd have a R&D

centre in Mumbai and Chennai.

Asian Paints have 23 manufacturing facilities around the world. All of these

facilities are managed by the corporate office in India.

2

DEFEND

Defend existing market by

strengthening existing

competencies

DEEPEN

Build complementary/new

competency to fortify position

in existing market.

2. Multi domestic/localisation strategy

The Group operates as:

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

SCIB Paints in Egypt.

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

Caribbean (Jamaica, Barbados, Trinidad & Tobago)

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

Taubmans in South Pacific (Fiji and Samoa)

Each of these subsidiaries have their own customised product for the need of that market.

Branding and positioning is also done in different way for different markets.

There are 23 manufacturing facilities for Asian Paint, of which most of them are outside India.

Each of these use locally available raw materials to manufacture the final product.

The corporate strategy of Asian Paints

New

Market

Opportunities

Existing

Existing New

Distinctive Competencies

DISCOVER

Exploit new markets by

creating products/services by

leveraging existing

competencies differently.

DEVELOP

Build new competency to

create the future.

3

Asian Paints as a Value Chain

Supporting Activities

Primary Activities

Primary Activities 1. R&D:-

Research & Development has played a significant role in the growth of the organization. The

company has continuously invested in R&D. The company has a dedicated Group R&D Centre

in India. PPG Asian Paints has a robust R&D lab in Mumbai that specialises in colour

development and troubleshooting.

2. Production

Asian Paints have world class production facilities across the world. The company have 23

manufacturing facilities across the world.

3. Marketing & Sales

Asian Paints puts forward a unique selling proposition. The Rural Marketing Initiatives started

since 1960. Distribution is one of the main strategy of Asian Paints. Advertising & Promotional

started in 1980s. Advertising Methods include Radio, TVCs, Print, and Internet. Promotional

Expenditure grew from 15% in 2003 to 21% in 2008.

Information Systems Logistics Human Resource

Company Infrastructure

R&D Production Marketing & Sales Customer Service

4

4. Customer Service

Customers - the very core of all the business activities of Asian Paints. From the beginning,

Asian Paints has fostered a customer-centric approach to business. A simple but unbeatable

concept of "going where the customer is" drives all our retail strategies. Asian Paints efforts

are continuously on to engage the consumer in the painting process and fulfill all the

requirements related to the world of painting.

Supporting Activities

1. Information System

Information technology (IT) plays a key role in enabling the company to grow and generate

profits. Asian Paints is the only company in India to have integrated Supply Chain Management

(SCM) Solution from i2 Technologies, and Enterprise Resource Planning (ERP) solution from

SAP. With these IT tools firmly in place and with the backing of an extensive communication

platform, Asian Paints is an internally enabled enterprise.

2. Logistics

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 centres, outside processing

centres and branches in India. The supply chain runs through a wide spectrum of functions right

from materials planning to procurement to primary distribution. It has played a pivotal role in

improving operational efficiencies and creating agile procurement, production and delivery

systems.

3. Human Resource

Asian Paints believes that people are its strongest assets, for a company can go only as high as

its people aim. It is people who innovate and invent, and who engineer the efficiencies that

make a business succeed. It is they who drive growth and lead to greater heights. At Asian

Paints, human resources systems are designed to create a focused, performance oriented and

agile company. A talent pool of over 5000 employees employed across 17 countries bring in a

unique blend of mind-sets and skills.

5

Porter’s Five Forces Model Analysis

Indian Scenario

BARGAINING POWER OF BUYERS

There are two types of buyers. Household users and industrial users. Household users include

contractors and the end customers. The contractors have high bargaining power and are more

price sensitive. The end customers have a number of options and decision is made based on a

number of factors. Industrial users are those who are highly knowledgeable about the product

and market. The price comparison is done effectively by this consumers. The bargaining power

of consumers is high due to availability of wide choice.

BARGAINING POWER OF SUPPLIERS

Paint industry is raw material intensive. More than 300 products are required to manufacture

the final products. In India there are a large number of suppliers. So there bargaining power is

less compared to other factors.

Rivalry among

competing sellers

Firms in other

industries providing

substitute products

Supplier of raw

materials and

components

Buyers

Potential new

entrants

6

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. Companies in the organised sector focus on brand building.

Higher pricing through product differentiation is also followed as a competitive strategy

AVAILABILITY OF SUBSTITUTES

Lime wash is conventionally used substitute for paints. In decorative paints segments an

alternative option is wallpapers. These markets are very small. So the threat of substitutes are

very low.

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. Brand, distribution network, working capital efficiency and technology also play

a crucial role.

Scenario in Middle East (Egypt, UAE, Bahrain and Oman)

With an influx of foreign investments in the Middle East, construction has reached new heights

in terms of large-scale infrastructural and industrial projects. The Middle East paints and

coatings sector earned revenues of $ 2.059 billion in 2010, with estimates to reach $ 3.003

billion by 2017.

BARGAINING POWER OF BUYERS

The bargaining power of consumers is high due to availability of wide choice. The market is

also very price sensitive.

BARGAINING POWER OF SUPPLIERS

The raw material prices are increasing. Most of the items has to be imported. So the suppliers

have a medium bargaining power in this condition.

7

COMPETITIVE RIVALRY

There are many players in the market. Most of them are big multinational companies. So the

competition is tough. A company have to do a lot of marketing in terms of branding and

differentiating their product. Price is also a factor because the market is very price sensitive.

THREAT OF NEW ENTRANTS

The paint and coating market in Middle East was estimated at $ 2.059 billion in 2010 and

expected to reach $ 3 .003 billion by 2017 at a compound annual growth rate of 5.5 %.

Almost all the big players are already there in the market. So it is difficult to get entry into such

a market until the offering is differentiated and can lead to significant cost savings over a period

of time.

Entry Strategies

Joint Ventures

1. PPG Asian Paints

Established in March 1997 is a 50:50 joint venture between Asian Paints Limited and PPG

Industries, Inc. USA. It was formed with the objective of providing solutions to the paint

requirements of Indian Automobile manufacturers. The joint venture brought together two

leading companies with strengths in technology, manufacturing and customer insight.

2. Asian Paints PPG

Second 50:50 Joint venture with PPG Industries, Inc., USA was formed in 2012. This JV caters

to Protective coatings, floor coatings, road marking paints and powder coatings.

Greenfield Ventures

APCO

Asian Paint entered South Pacific Islands under the name APCO Coatings. Asian Paints

operates in Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco Coatings.

8

Acquisitions 1. Kadisco Chemical Industry, Ethiopia

Asian Paints has marked its entry in Africa by acquiring 51% equity in Kadisco Chemical

Industry, Ethiopia. This acquisition will help the company enter other markets of Africa. Africa

is an immense opportunity for Asian Paints and with its scale and size, the company can exploit

this untapped market, which is growing at a fast pace (especially Nigeria).

2. Taubmans Paints Fiji

Taubmans Paints Fiji, the fourth largest paint company in Fiji, became a part of the Asian

Paints family in September, 2003. Taubmans Paints is the dominant player in the project sales

segment in the country and is a leader in the neighbouring Samoa Islands. It has two

manufacturing facilities, one in Suva (Fiji) and the other in Samoa.

3. SCIB Paints

Founded in 1979, SCIB Paints today is a reputed name and ranks amongst the top five paint

companies in Egypt. SCIB Paints became a part of the Asian Paints group in August, 2002.

4. Berger

Berger grew over two hundred and forty years. Transiting smoothly through different eras, it

is moving effortlessly from the period of industrial revolution to the period of silicon

microchips. Berger International Limited, in November 2002, became a part of the Asian Paints

Group.

5. Sleek Group

As part of strategic initiative in the direction of Home Improvement & Décor, Asian Paints

identified modern kitchen space as a key opportunity to be explored in synergy with the existing

line of decorative paints business in India. In August, 2013 Asian Paints acquired 51% stake in

the Sleek Group, which is a major player in the organized modern kitchen space with pan India

presence and is engaged in the business of manufacturing, selling and distribution of modular

kitchens as well as kitchen components including wire baskets, cabinets, appliances,

accessories, etc.

9

Mergers Pantasia Chemicals Ltd. (PCL) was merged with the Company. The assets and liabilities of the

erstwhile PCL are vested with the Company with effect from 1.10.1994

Strategic Alliances The company has technical collaborations with PPG of the US for auto paints and

powder coatings.

Asian Paints, via its Singapore-based subsidiary - Berger International - inks a

technology and brand licensing agreement with PT Abadi Coatings Solusi, an

Indonesian paint company.

Alliance with Nippon Paints of Japan for auto paints and with Sigma Coating of

Holland for marine and anti-corrosion paints.

The company also have a strategic alliance with Protech Chemicals, Canada.

Organisation of International Business of Asian Paints

CEO

Production Marketing Finance Human Resource

Asia Middle East Africa South Pacific Singapore

10

The organisation structure in Asian Paints is Global Structure. Structural arrangement in which

domestic divisions are given worldwide responsibility for product groups. Adopted by firms

that are reasonably diversified. The main advantages are

Emphasizes functional expertise,

Tight centralized control

Relatively lean managerial staff

Global product divisions operate as profit centres

Provides a direct line of communication from customer

Helps R&D to work on development of products that serve the world customer

Permits managers to gain expertise in technical and marketing aspects of products

Helps realize location and experience curve economies

Facilitates the transfer of core competencies

11

Bibliography

1. http://www.asianpaints.com/

2. http://en.wikipedia.org/wiki/Asian_Paints

3. https://www.equitymaster.com/research-it/sector-info/paint/Paints-Sector-Analysis-

Report.asp

4. www.falakconsulting.com/SiteAssets/expertise/ideas-and-

insights/The%20GCC%20Paint%20Market.pdf

5. http://www.edelresearch.com/showreportpdf-26172/BRAVEHEART_SERIES_-

_ASIAN_PAINTS_-_THE_GROWTH_PALETTE-EDEL

6. http://www.bergeronline.com/

7. http://www.apcocoatings.com/

8. http://members.tripod.com/~Umesh_R/paintsprojects/asianpaints

9. http://economictimes.indiatimes.com/asian-paints-ltd/infocompanyhistory/companyid-

14034.cms