Strength-Weakness

ABOUT ASIAN PAINTS 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.

Asian Paints Ltd. (APL)

Since its foundation in 1942, Asian Paints has come a long way to become Indias largest and Asias third largest paint company, with a turnover of Rs. 96.32 billion. Asian Paints operates in 17 countries and has 24 paint manufacturing facilities in the world servicing consumers in over 65 countries. Asian Paints has always been a leader in the paint industry, pushing new concepts in India like Colour Worlds, Home Solutions, Colour Next, and Kids World. THE COMPANY OPERATES IN HOME, AUTOMOTIVE AND INDUSTRIAL SEGMENTS www.asianpaints.com

Strength-Weakness (KNL)
About Kansai Nerolac Ltd. : What has made Kansai Nerolac the second-largest paint company in India? It could be their product innovations, cutting edge R&D, state-of-the-art solutions or their sensitivity towards the environment. Or it could be something that is a lot simpler, like their immense curiosity and unwavering belief in constant innovation. Today, Kansai Nerolac is the second largest coating company in India and the market leader in industrial coatings. Since
1999, Kansai Paint Co Ltd., Japan, took over the entire stake of Tata Forbes Group and thus GNP (Goodlass Nerolac Paints) became wholly owned subsidiary of Kansai Paint Co Ltd. In 2006 is name was changed to Kansai Nerolac Paints. www.kansainerolac.com

Strength-Weakness profile of APL

MARKETING Market Standing Strength: strong presence in the market and steady growth in sales. Weakness: in position in Industrial Paints segment. It is far behind the market leader.

Contd. Strength-Weakness
Product mix Strength: has a wide range, a large number of shades and pack sizes Weakness: widening product mix puts a strain on production and distribution, accounting and administration. Competitors are gaining strength such as Kansai Nerolac, and Berger Paints.

Contd. Strength-Weakness
Pricing Strength: oriented to middle-class consumers. Weakness: benefit of premium pricing is not available. Profits to come through volume and efficiencies.

Contd. Strength-Weakness
Channel strength Strength: large number of retail dealers are there it is i.e. market penetration in semiurban and rural markets. Weakness: competitors generally operate through wholesale distributors. So comparatively the cost for Asian paint dealer administration is complex and costly.

Contd. Strength-Weakness
Personal selling Strength: Effective

Brand power Strength: Has good brands in different price slots. Weakness: Will need to plan out new positioning in respect of premium brand brands meant for urban and rural markets.

Contd. Strength-Weakness
Production facilities Strengths: Modern facilities. Benefits of integration in manufacturing Finance Profitability Strength: RONW 40%

Contd. Strength-Weakness APL

R&D Strengths: Average Weakness: higher resources and commitment to R&D appear essential in view of 3 factors 1. industrial paint segment is very high technology but the company is relatively weak in this segment, 2. segment is poised for higher growth 3. decorative paints also becoming high-tech. Collaborations for getting new technologies faster may be needed.

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Please note the significance of qualitative factors in the analysis because the financial reports are not capable of capturing certain kinds of information which are otherwise important.