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PROJECT ON

BERGER
PAINTS

Introduction
Vision, Mission & and objective
Berger a learner organization
Strategic decision making
Planning mode
Corporate governance
Role of board of director
Social responsibilities (Economic Legal , Ethical , Discretionary )
Sustainability
Ethical code of conduct
Ethical approach
Environment scanning
Macro environment
Task environment
Prospector strategy
External Factor Analysis Summary (EFAS)
Core competency
Distinctive competency
Business model (Time Model)
Value chain
Financial leverage
Research and development(R&D)
Strategic operational
Human resource
STRATEGIC INFORMATION SYSTEMS
internal Factor Analysis Summary (IFAS)

Introduction
Berger is one of the largest paint manufacturing company and one of the well
growing paint company in Pakistan since its inception from 1950.Despite many
challenges, Berger Paints has succeeded in staying at the forefront of Pakistans
paint.
The strategic management of Berger paint is given below

Vision

We will become the leading paints and associated products manufacturing and
marketing company in Pakistan ensuring best returns to our investors & highest
customer satisfaction.

Mission

A summarized mission of Berger paints is;


We will lead by innovation, commitment to achieve best quality products and
services, safeguard the interests all other stakeholders, act as a good corporate
citizen ensuring service towards community and shall focus on environment,
health and safety.

Objective

The company utilizes all available resources to pursue its EHS (Health, Safety &
Environment) objectives by striving to attain economic prosperity and ecological
balance.

Berger A Learning Organization Over the Time Period


With continues enhancement of capability building and skill development has
helped Berger gaining the excellence for developing a learning organization e.g.
entering into a number of technical collaboration with the largest paint company
in Japan, UK etc.

Strategic Decision Making


Innovation &Collaboration with well reputed company to keep in pace with the
technological advancement in order to gain competitive advantage

Planning mode:

According to Henry Mintzberg in his modes of strategic decision-making states


that planning decision-making mode include equally the search for new
opportunities and reactive solution to the existing problems e.g. Japan chemical
company for Bumper Paints &PCS Powders, UK for Powder Coatings etc.

Corporate Governance
BERGER PAINTS PAKISTAN became a public limited company in 1974.At present it
has 7 board of director in which Mr. Maqbool H.H. Rahimtoola is the chairman and Dr.
Mahmood Ahmad is the chief executive

Roles of board of director

Berger paints has nominal participation of the board of director with limited
degree of involvement in reviewing the performance or review of key decision and

program of management. The role is widely occupied by CEO and its management
team. However the key decision is made by board of director.

Social responsibility

Berger Paints believes in growth and fostering of human assets which eventually
contribute for the wellness of respective families, their country and humanity at
large which indicate that Berger paints is following the carol view of social
responsibility.

Economic responsibilities
Berger is a most trust worthy name in quality paints. This proud reputation has
helped them very well in performing the economic responsibility of providing
value and then generating money to repay its shareholder.

Legal responsibilities

Legal responsibility as per defined by governments of Pakistan is very well obeyed


by Berger paint such as employee discrimination laws, laws related to quality
standard or to pay taxes and interest etc.

Ethical responsibilities

Following the moral correct path as well as to follow generally held believe related
to behavior is first priority of Berger paints. HAJ draw, birthday celebrations
celebrating Pakistan day etc. are the activities that help Berger feel its employee
like a family.

Discretionary responsibilities
Berger paint has carried out activities such as helping schools and hospital in
painting to support their dignified cause of corporate social responsibility (CSR).
Berger paints Pakistan was given Corporate Social Responsibility awards 2015 for
its recognized effort on (CSR).
Berger is also a part of (NOP) national outreach program that act as a platform of
knowledge sharing among people as seminar are conducted on different topic.
NOP under the name of rising star is conducting a free training program that is
also supported by Berger paints Pakistan.

Sustainability

Berger has very well satisfied the social responsibility i.e. economic, ethical,
discretionary, and legal responsibilities this has led to sustainable business
corporation of Further our journey for excellence is fully supported by continues
learning along with capability and skill development.
Similarly sustainable growth is ambition of Berger paint with right kind of people
that possess an unmatched capability and skills along with commitment

Ethical code of conduct


Berger develops Ethical code of conduct for employees how to behave while on
the job. It is a useful way to promote ethical behavior.. This belief has led to a
more organized and dedicated approach in development of human resource
as a competitive strength.
Every employee is required to understand the laws and government regulation
and other company policy as those Codes of ethics is a mean for achieving and
implementing of company mission thus it shows that they are consider in
strategic decision making.

Ethical approach

Utilitarian approach to ethical behavior is followed by Berger as the utilitarian


approach proposes that actions and plans should be judged by their
consequences. Thus People at Berger react in a way that will give the greater
benefit to the society and lowest harm or cost. Focus is specially placed at Berger
paints on protecting the environment as well the safety and health of customer,
employee and communities at large.

Environmental scanning

External Environmental Variables include


1. Natural environment 2. Societal environment

3. Task environment

Natural environment
It is very important while making strategic decision firm must take into account
the natural environmental issue as they affect the performance of business
organization e.g. global warming as climate change, increasing sea level etc. are
becoming unpredictable and uncertain that is why in Berger paints a special focus
is given on protecting the environment as well the safety and health of customer,
employee and communities at large. The company has done tremendous job to
fulfill its Environment, Health& Safety EHS objectives by attaining economic
prosperity and environmental balance.

Societal Environment
Health, Safety & Environment
Special focus is placed at Berger on protection of the environment as well as
health and safety of employees, customers and communities where it operates.

The company utilizes all available resources to pursue its EHS objectives by
striving to attain economic prosperity and ecological balance.
Berger manufacturing facility conforms to the international and national
environmental standards where company is manufacturing environmental
friendly products to minimize the potential effect on the people and the
environment.
A clean and pollution-free environment is ensured at the companys
manufacturing facilities through a Solvent Recovery Plant that recycles used
solvent, a Dust/Vapor extraction system and a Xylene recovery system.
Safety training programs are organized on a regular basis for all personnel
and factory workers and vendors to ensure safety of the work environment.
Strict safety regulations for PPEs (Personal Protection Equipments) and work
procedures are enforced at every step .In addition, safety officers conduct regular
Safety Audits that identify and rectify any non-compliance and enforce proper
maintenance of safety procedures with active cooperation of all employees.

The external environment for Berger is identified under macro (pest)

Macro Environment:
PEST: PEST is an economic tool which is used in evaluating the environment so
that we can understand the suitability of the environment for making strategy for
the Berger paints. PEST is actually abbreviation for political, environment, social
and technology.

Political factor
Political factor involve government regulation. Laws on business, pollution,
employment and taxation are the factor applies on the organization and they are
bound to follow them.

Trends:
Interest rates

In a conversation on 11 December 2015 sales officer M. Meraaj confirmed that


Last October increase in tax from 16-17% and then again increases tax from 1721 % so that increase in price had affect Berger paints as some time there are
deal with customer that for specific period they will supply product on same rate,
thus this increase in tax are going to bear by organization result in cutting margin.

Similarly imports policy as Berger imports its paints from Dubai. Pollution control
law health and safety law and environmental law are too followed by burger.

Cost of Energy and Its Availability

Energy crises in Pakistan as well as its increasing cost day by day is one of the
factors that is of great concern for Berger paints Pakistan limited while making
strategic decision making.

Economic situation
Inflation: Generally increase in price in an economy that result fall in purchase
value of money is inflation. So if the inflation rate is increased purchase value will
decrease. Thus a moderate inflation rate is desirable for Berger paints. Trend of
previous year average inflation was 2.54 which is favorable and it expect
moderate inflation in future as well

Cost of Energy and Its Availability


Energy crises in Pakistan as well as its increasing cost day by day is one of the
factors that is of great concern for Berger paints Pakistan limited while making
strategic decision making.
GDP: The growth in GDP 4.24 % in 2014-15 with respect to 4.03 percent
recorded in the previous year which is a good sign for Berger paints.

SOCIAL

These factor may include demographic factor in which variable i.e. Population ,
,norm and culture etc. are some of social factor that have to some extent an
impact on the ongoing operation of business and in future as well. Trend toward
using tiles instead of paints is a threat as tiles has greater life time.

TECHNOLOGICAL

Trends in technology such as new equipment related to paints, using robotic


technology , using computing power i.e. is developing customer database ,e
commerce , understanding energy crises in Pakistan thus developing alternative
energy sources etc. are some of the issues that paint industry faces. That is why
Berger paints has entered into a number of technical alliance arrangements with
leading international manufacturers in paints industry. These include the wellknown paint company in Japan which enables them to develop Automobile paints,
UK for Powder Coatings, Malaysia for markings of Road & Runway etc. The Berger
paints is also committed to continuous process of investment in new equipment
e.g. computerized matching color technology. Collaboration is also going on with

Dura Cromix for car paint and Nippon for latest technology i.e. environmental
friendly how because scientifically it is proved that led emit fumes i.e. is injurious
to health.

Task environmentWhile scanning the task environment, Supplier Public, Intermediaries and
Customer Market (SPICC) help in better understanding of task environment.

Supplier

Raw material is supplied from UAE and reaches Lahore from where it is supplied to
other city main warehouses; however every city has it on distributor chain. In
supplying to market the intermediary channel is used while in case of Business to
Business (B2B) selling the paint is directly supplied to the B2B customer.

Public

Across all layers in the Berger paints, it is encouraging an environment of


recognizing talent, fostering potential and encourages initiatives. Berger paint is
maintaining an environment enabling freedom, fairness and equal opportunity to
perform and excel with in situations.
NFEH (National Forum for Environment & Health) recognized Berger for its
activities done in respect of corporate social responsibility (CSR) and beautiful
conference was held in Islamabad where Berger was awarded Corporate Social
Responsibility (CSR) Award 2015

Intermediaries

Shah distributer act as an intermediary to supply product to the market in


Islamabad however every city has its own intermediary channel. But in Business
to Business (B2B)Berger paints supply itself to the customer because buying it
from market it will be more expensive for them as compare to dealing directly,
similarly the commission given to intermediary is also saved for Berger paint in
selling Business to Business (B2B)

Customer

A large number of sales team personnel and a wide network of distributors and
dealers serve customers in all large cities across the country. Berger Paint offers a
wide range of solution through different paint categories in order to meet the
demands of its customers.
Berger have highly qualified and experienced personal that offers professional
services to its industrial customers through Technical Services team.

Competitor

List of competitor is long including local company but because its brand image is
high thus competitor who compete include AkzoNobel Pakistan, ICI, deluxe bright
etc
However In a conversation on 11 December 2015 sales officer M.
Meraaj confirmed that AkzoNobel is leader in market while Berger is second to it.
The reason behind it is that fire evoked in Karachi head quarter that burn billion of
stuff.

Prospectors
Berger paint follow prospector type strategy i.e. fairly comprehensive product
lines that focus on market opportunities and product innovation. They tend to
emphasize efficiency along with creativity .E.g. as an innovative and progressive
paint company, Berger Paints Pakistan offers a wide range of paints for diverse
applications and uses .Berger has eleven product line Decorative Business,
Automotive Business, General Industrial Finisher, Powder Coating, Protective
Coatings etc.

External Factor Analysis Summary (EFAS) Of


Berger
Internal factor
Opportunity
Global markets
Income constant
increase

weig
ht

rati
ng

0.45

0.25

2.5

0.2

0.1
1

1.5

Threat
Increasing costs

0.4

fire accident

0.1

3.5

Tax changes
Stiff competition

0.3
0.2
1

3
2.5

Growing economy
Business
diversification

weighted
score

comment

1.8 market expansion


help future forecast
0.625 about income
better demand and
0.6 supply
0.15 demand existence
3.175
1.6 energy crises and R&D
occur two time in
0.35 Lahore, huge loss
changes unpredictably
0.9 in short time
0.5 decrease in revenue
3.35

Core Competencies
Consistent quality has always been Bergers trait .This has been the driving force
in making it the leading brand name backed by premium quality across Pakistan.
Berger has the most comprehensive product for numerous paint market divisions.
Berger has gained through its superior technology, product quality and better
customized services.

Distinctive competencies
Quality is the main focus and to make its distinctive competency Berger
established a state of the art manufacturing facility in Lahore. This plant has
provided Berger an edge over its competition through enhanced production. It
has enabled Berger to meet the growing demands of its valued customers across
Pakistan

Business model
Time model
Berger paints R&D and speed is the keys to success in the time model. Being the
first to market with a new innovation allows a Berger to earn high margins. Market
Company continues on innovation with process R&D and lower margins, its help
keep them in market as pioneer.

Value chain
Although in Berger paint every activity is creating value but focus on supporting
activity such as technological and HRM and primary activity such as marketing
and sales has bring great value to product e.g. Berger keep on upgrading and
expand its range by bringing together innovative products in order to meet
consumer needs. Personal visits by the technical sales team to address problems
that the customers may have.

Financial leverage

The table below shows the ratio percentage of how much capital comes in the
form of debt as well as determines the capability of a company to encounter its
financial obligations.
Debt to
equity

long term
debt
share holder
equity

54,670
626,56
5

0.0872
54

8.73
%

Debt to
asset

long term
debt

54,670
3,547,4
83

total asset

0.0154
11

1.54
%

R&Ds
Berger keeps on upgrading and expands its range by bringing together innovative
products in order to meet consumer needs. To ensure high standard of paint by
using resin is produced at own plant of Berger.
By virtue of Research and developments (R&Ds), its better technology, quality and
services has earned Berger the admiration and trust of customer.

Strategic operational

Berger has continuous systems of operational action those laid out as lines on
which products can be unceasingly assembled and processed. Consistent quality
has been the driving force in making it leading brand across Pakistan.

Human resource

At Berger people are considered as most precious. This belief has led to a more
focused approach in developing the Human Resource as our competitive strength.
Corporate Activities such as GREEN DAY (Pakistan day), LONG SERVICE AWARDS,
and HAJJ DRAW etc. are there to bring motivation among employee.

STRATEGIC INFORMATION SYSTEMS

Strategic information system Berger have develop their information system by


developing a database of not only customer but also its employee this result in
keeping good track record of its employee as well as help in reducing cost.
Enterprise resource planning (ERP) software is used by Berger to keep work
environment simple for its employee. Thus it can help in controlling activities and
can be used as strategic tool for gaining advantage over its competitor
Internal Factor Analysis Summary (IFAS)
Internal factor
strength
distribution and sales
network
Monetary assistance
provided
Skilled workforce

weig
ht

Ratin weighted
g
score

0.4

0.1
0.3

2.5
3

comment

help increase market


1.6 share
use it for investment
0.25 purpose
0.9 increase efficiency

Reduced labor costs


Weakness
Investments in R&D
High levels of lead
Weak online presence
large inventory a problem

0.2
1

1.5

0.45
0.25

4
3.5

0.2
0.1
1

3
2.5

0.3 save revenue


3.05
1.8 slow in new product
0.875 injurious for health
result in loss of
0.6 Opportunity
0.25 lose control
3.525

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