TABLE OF CONTENTS

Sl. No

Chapters Page No.

1. Introduction

2. Module 1 : Strategic Management

3. Module 2 : Strategy Formulation

4. Module 3 : External Environment

5. Module 4 : Resources & Competitive Position

6. Module 5 : Generic Strategy

7. Module 6 : Grand Strategies

8. Module 7 : Strategy Implementation

9. Module 8 : Strategic review

10. Conclusion

11. Bibliography

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 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

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

Ap has acquired short term competitive advantage 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 verydifficult

Futuristic approach should be gaining competitive advantage trough channel control or occupying mind space.

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.

Profit & Loss account of Asian Paints

------------------- in Rs. Cr. -------------------

Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

IncomeSales Turnover 9,139.39 7,244.59 5,794.09 5,042.40 4,092.36Excise Duty 812.31 638.57 426.37 532.28 496.83Net Sales 8,327.08 6,606.02 5,367.72 4,510.12 3,595.53Other Income 90.43 72.38 150.61 23.86 52.29Stock Adjustments 143.78 157.54 130.83 0.61 33.90Total Income 8,561.29 6,835.94 5,649.16 4,534.59 3,681.72ExpenditureRaw Materials 4,866.63 3,812.47 2,966.23 2,641.09 2,003.37Power & Fuel Cost 74.29 65.98 47.03 45.78 35.86Employee Cost 343.51 302.34 262.73 239.77 195.54Other Manufacturing Expenses

77.05 61.46 52.30 40.45 39.26

Selling and Admin Expenses

1,672.74 1,331.85 1,119.89 939.16 771.66

Miscellaneous Expenses 36.77 28.19 17.41 10.55 14.25Preoperative Exp Capitalised

0.00 0.00 0.00 0.00 0.00

Total Expenses 7,070.99 5,602.29 4,465.59 3,916.80 3,059.94Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 1,399.87 1,161.27 1,032.96 593.93 569.49PBDIT 1,490.30 1,233.65 1,183.57 617.79 621.78Interest 27.88 16.34 19.10 15.91 13.46PBDT 1,462.42 1,217.31 1,164.47 601.88 608.32Depreciation 99.49 94.48 60.74 57.15 43.77Other Written Off 0.00 0.00 0.00 0.00 0.00Profit Before Tax 1,362.93 1,122.83 1,103.73 544.73 564.55Extra-ordinary items 2.38 4.22 7.23 3.60 -2.69PBT (Post Extra-ord Items) 1,365.31 1,127.05 1,110.96 548.33 561.86Tax 406.92 351.90 336.46 185.97 186.66Reported Net Profit 958.39 775.15 774.50 362.36 375.20Total Value Addition 2,204.36 1,789.82 1,499.36 1,275.71 1,056.57Preference Dividend 0.00 0.00 0.00 0.00 0.00Equity Dividend 383.69 306.94 258.98 167.86 163.06Corporate Dividend Tax 62.24 50.11 43.33 28.53 27.72Per share data (annualised)Shares in issue (lakhs) 959.20 959.20 959.20 959.20 959.20

Earning Per Share (Rs) 99.92 80.81 80.74 37.78 39.12Equity Dividend (%) 400.00 320.00 270.00 175.00 170.00Book Value (Rs) 259.36 205.93 162.35 114.10 96.80

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 has 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.

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

Module 3 : Company’s External Environment

Industry Analysis

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.

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 not well versed in

industrial paint when compared to others

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

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:

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.

Module 6 : Long term & Grand Strategies

COMPETITIVE STRENGTH MEASURE SCORE

Relative market share 8 / 9

Cost relative to competitors cost 7 / 9

Ability to beat competitors on production attributes

9 / 9

Bargaining leverage with suppliers 7/ 9

Brand image and reputation 9/ 9

Profitability relative to competitors 8 / 9

Overall attractiveness score 8 / 9

NINE CELL OF ASIAN PAINTS

ASIAN PAINTS

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.

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.

Conclusion

The company plans to consolidate its dominant position in India by launching new products in

line with the market developments in both decorative paint and industrial coating segments. The

company is focusing on further improving the operations of all of its subsidiaries in India and

abroad and has already launched E-Strides, an ERP initiative through which all the overseas

ventures are being covered for sharing of global knowledge, best practices and better control on

operations. The company’s objective is to be among the top three players in each market where it

is currently operating or plans to operate in the future.

Introducing Water – based Paints

Repositioning of existing Brands in Rural Market

Broadening of Distribution Network

Adding more choices for shades and effects

Enhancing Better Quality

Demand will be generated through the new

constructions coming in housing and industries

BIBLIOGRAPHY

European Journal of Social Kotler, Philip, “Marketing Pearson Publishers, New Delhi.

Magazines and Journals

Business Today

Business India

India Today

Journal of Organizational Behavior

American Journal of Industrial Medicine

Strategic Management Journal Psychology

www.asianpaints.com

www.moneycontrol.com