PESTEL ANALYSIS INDIA

Presented By
Akshata Acharekar Nilofer Khan Deepavali Vankalu

Political Factors

India is the biggest democracy in the World. The government type is federal republic. The political Situation in the country is more or less stable. State politics have been dominated by several national parties including the INC, BJP, the Communist Party of India (CPI), and various regional parties. Export oriented Economy

Economic Factors

The economic factors in India are improving continuously.

Market based economy Second fastest growing major economy in the world. Strong domestic market There is a continuous growth in per capita income. India has the third highest GDP in terms of purchasing power. Foreign direct investment rose in the fiscal year. Inflation rate is on a higher side
3

Social Factors

India is the second most populous nation in the world with an approximate population of over 1.1billion people.

An increase in the purchasing power the Indian consumer which preferred local brand which is far cheaper is now able to get a taste of the

Technology

India is Known as a emerging leaders in the IT sector. State of art R & D facility, Manpower is available. Minimum efficient production level and influence outsourcing decisions

Environmental factors

Include weather, climate, and climate change

May especially affect industries such as tourism, farming, and insurance.

Legal factors

Include

Discrimination law

Consumer law

Antitrust law
7

INTRODUCTION

Asian Paints is India's largest paint company Ranked among the top ten Decorative coatings companies in the world Turnover of INR 7750 crore ($1.73 Bn) Asian Paints along with its subsidiaries have operations in 17 countries across the world Consist of 23 paint manufacturing facilities Servicing consumers in 65 countries through Berger International, SCIB Paints Egypt, Asian Paints, Apco Coatings and Taubmans
9

TAG LINE

EVERY

COLOR TELLS A STORY

10

HISTORY
1st

February, 1942: Armed with little knowledge and great determination, Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani and Arvind R. Vakil get together to manufacture paint in a garage on Foras Road, Bombay. Asian Paints touches a turnover of Rs. 3,50,000.

1945:

11

Cont .

1954

Asian Paints mascot, Gattu, the mischievous kid, is born.

1957

66 The family-owned company makes the transition to a professionally managed organisation.

1967

Asian Paints emerges as India's leading paint company ahead of any international competition.

12

Asian Paints has won many awards & recognitions which include
Forbes rated it under 200 'Best Small Companies of the world' in 2002 and 2003 and amongst the top 200 'Under a Billion Firms' of Asia in 2005, Best small company in India by Asia Money in 2002.

Golden peacock environment management award national quality award by union labour ministry.

Five star rating by British safety council in 2003 & 2005.

Awarded the "Sword of Honour" by the British Safety Council for all the paintplants in India. This award is considered as the pinnacle of achievement in safety across the world.

13

Cont

Ranked 24th amongst the top paint companies in the world by Coatings World Top Companies Report 2006. The Asset - one of Asia's leading financial magazine ranked Asian Paints amongst the leading Indian companies in Corporate Governance in 2002 and 2005. Received the Ernst & Young "Entrepreneur of the Year Manufacturing" award in 2003.

14

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.

15

INTERNATIONAL PRESENCE

16

Asian Paints operates in 5 regions across the world viz.

17

The five corporate brads

18

I N T E R N AT I O N A L M A R K E T S

19

GROUP SUBSIDARIES
Apco Coatings is a subsidiary of Asian Paints in the South Pacific islands. Asian Paints operates in Australia, Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco Coatings.

Asian Paints Industrial Coatings Limited has been set up to cater to the powder coatings market which is one of the fastest growing segments in the industrial coatings market.

. In November 2002, BIL became a part of the Asian Paints Group. BIL has presence across three regions viz. Middle East, Caribbean and South East Asia.
20

Cont

..
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

Asian PPG Industries Limited, a joint venture between Asian Paints (India) Limited and PPG Industries, Inc. USA with 50:50 equity sharing was established in March 1997

Taubmans Paints Fiji, the fourth largest paint company in Fiji, became a part of the Asian Paints family in September 2003.

21

THE NEW ASIAN PAINTS GROUP

22

Business Profile

23

24

MARGINS STRATEGY

Margin expansion despite input price increase

25

GROWTH STRATEGY AND M&A

Growth Strategy: To increase sales growth rate of the group beyond past levels using a two-pronged approach:

26

INTERNATIONAL MARKET - STRATEGY

To enter the high-growth emerging markets

Adopt a regional hub approach to international operations

Apply the emerging market business model: Introduce new products suited to local needs Introduce new technology, accordingly Focus to improve all areas of operations, especially supply chain

27

M&A INTERNATIONAL - OPPORTUNITIES

Asian

Paints believes there is plenty of scope to achieve significant presence in targeted countries

Niches/segments available for Asian Paints in these markets

Vast potential exists for Asian Paints, as most paint companies in these markets operate sub-optimally viz., in Supply chain, manufacturing, technology & marketing

28

CORPORATE GOVERNANCE

29

The Corporate Governance philosophy of the Company is based on the following principles:
Satisfaction

conduct Transparency and a high degree of disclosure levels Truthful communication about how the company is run internally A simple and transparent corporate structure driven solely by the business needs Strict compliance with Clause 49 of the Listing Agreement as amended from time to time Establishment of an efficient corporate structure for the management of the Company's affairs Management is the trustee of the shareholders' capital and not the owner

30

of the spirit of the law through ethical business

COMPETITIVE ADVANTAGE

31

MANUFACTURING CAPACITY AND VOLUME

32

33

Dealer Network & Reach

Over 14500 direct dealers as opposed to 7000 of our nearest competitor Over 35% of the dealers do business only with APIL 67 sales locations situated all across the Country

34

RETAIL INITIATIVES

Asian Paints has fostered a customercentric approach to business.

35

Consumer-centric initiatives

Asian Paints Home Solutions

- Offers a painted surface vs. just paint Aimed at controlling the quality of end product Overcomes major barriers to purchase/consumption Good response from the market; present in six cities Asian Paints Helpline Toll free access to the Helpline High conversion rate into actual sales

36

Cont.

Colour World

machines 3175 machines installed till February 1, 2003 827 machines installed under arrangement with Citibank Colour World dealers make more than 50% of sales of colour trends in India

Prediction

The

launch of Kids World Play mode

37

Royale

Do-It-Yourself

CSR
Environment

and safety. Improving infrastructure and healthcare at local schools; adopting school education. Total water management. Age care.

38

Environment and Safety

39

SUCCESS STORY

40

Information Technology
Asian

Paints is the first company in India to have integrated Supply Chain Management (SCM) Solution from i2 Technologies, and Enterprise Resource Planning (ERP) solution from SAP. Paints has launched a supplier portal that includes an automated digital document exchange facility employee portal Relations Management (CRM)

Asian An

Customer

41

Investment in I.T.

Benefits:
RM & FG inventory reduction Revenue Increase by avoiding retail shorts Reduction in dead & slow moving stock Plant through-put improvement

42

FAILURE STORY

43

Asian

paint to exit from Thailand and China.

Already Study

sold stakes in two loss making units in Hong kong and Malaysia. conducted by the CSEs Pollution monitoring laboratory found the Apcolite (Asian paint) sample with lead much higher than the standard.

44

Research and Development (R&D)

R&D efforts have been focused on developing new exterior finishes, economy emulsions and distempers.

45

R & D / INNOVATION STRATEGIES

Developing new products and innovations

Reducing costs by value re- engineering of formulations

46

Research and Development (R&D) Structure In India, the company's has :

140 strong R&D team 7 doctorates 115 qualified scientists

47

R&D new developments

The

development of the water based wood polish which is odourless and is of same quality as of solvent based polish. company is also in the process of setting up a new R&D centre near Mumbai (India)

The

48

TODAY

Asian Paints becomes the 10th largest decorative paint company in the world. Asian Paints is more than twice the size of its nearest competitor. It is one of the most admired companies in India. Present in 22 countries with 27 manufacturing locations, over 2500 SKU's, Integrated SAP - ERP & i2 - SCM solution. On the recommendations of Booz, Allen and Hamilton, Asian Paints restructured itself into Growth, Decorative and International business units and adopted SCM and ERP technology. Asian Paints aims to become the 5th largest decorative paint company in the world.

49

FUTURE OUTLOOK
To

further improving the operations.

Plans

to launch new products in line as: - 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

50

THANK YOU

51