Swot Analysis of Asian Paints

Topics: Marketing, Inventory, Strategic management Pages: 5 (1053 words) Published: August 15, 2010
SWOT analysis is a basic, straightforward model that provides direction and serves as a
basis for the development of marketing plans. It accomplishes this by assessing an organizations strengths (what an organization can do) and weaknesses (what an organization cannot do) in addition to opportunities (potential favorable conditions for an

organization) and threats (potential unfavorable conditions for an organization). SWOT
analysis is an important step in planning and its value is often underestimated despite the
simplicity in creation. The role of SWOT analysis is to take the information from the
environmental analysis and separate it into internal issues (strengths and weaknesses) and
external issues (opportunities and threats).
SWOT analysis is done for a company, to find out its overall Strengths, Weaknesses,
Threats and opportunities leading to gauging the competitive potential of the company.
The SWOT Analysis enables a company to recognize its market standing and adopt strategies accordingly. Here SWOT analysis of Asian Paints is made to understand the
positioning of the company better.
2.1. Strengths:
Market leaders with 35% market share in the organized sector, the closest competitor does not have even half of AP¶s share;
Comprehensive nation wide coverage of the market ± urban, semi-urban and rural areas. They have quite a number of brands, covering all segments and filling all gaps. For example, they have brands in different price slots like Utsav for rural lower-end markets and Apcolite for high end-markets;

AP¶s logo µGattu¶, an impish boy with the paint tin and brush, is most popular and easily recognized;
Widest product range in terms of products, shades, pack sizes - 40 different decoratives, some in 150 shades, 8 different pack sizes;
Unlike its competitors who concentrate only in urban areas, AP is found everywhere. It has a country wide distribution 6.
A network of 13,000 dealers spread all over the country. The nearest competitor has less than 8,000. For this, they have large network of regional offices and company depots and sales personnel to service the nationwide dealer network;

Strong in inventory control. APs average inventory level is 28 days sales against 51 days for the industry. AP has 45% edge in inventory carrying costs; 8.
The pricing strategy is oriented to middle/lower end consumers; 9.
AP is quite strong in production-marketing coordination. Their policy of offering tailor-made products to suit customer need has resulted in an ever growing product range;
In-house production, no outsourcing, high reliability in suppliers, superior in quality assurance;
Leader in profit and operating margins, ROI of AP is 40% while ROI of the rest of the industry is 22%, Net worth of Rs 204 crores against Rs 58 crores of Goodlass Nerolac and Rs 41 crores of Berger. 12.

High caliber human resource, employs maximum number of MBAs, as a proportion to total number of employees;
Corporate reputation has been a major strength for AP. The image is that of a successful and well-managed company. They have won many accolades and awards. For example, 1995 Corporate Excellence Award from HBSA and ET, IDBI study rated AP as one of India¶s most excellent companies, another study rated AP among top 5 paint manufacturers in the world. They have an enviable track record in breaking the position of MNCs in the Indian paint industry.

2.2. Weaknesses:
In industrial paints, AP has only a 15% market share. It is far behind the leader Goodlass Nerolac, which has a market share of 43%. Since this is going to be the major growth segment in the future, a lag in this segment will end up as a major weakness;

Widening product mix puts strain on production distribution, accounting and administration;
Innovation in developing new products is adequate;
AP has a major weakness on the technology front...
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