Page 18 - DECO405_MANAGERIAL_ECONOMICS

Unit 1: Introduction to Managerial Economics

Notes

Case Study Decision-making at Asian Paints

ecision-making the vision of Asian Paints (India) Ltd., is to become one of the top
five Decorative coatings companies worldwide by leveraging its expertise in the
Dhigher 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 is India’s largest paint company and ranks among the top ten decorative
coatings companies in the world today, with a turnover of 20.67 billion (USD 435 million)
and an enviable reputation in the Indian corporate world for Professionalism, Fast Track
Growth, and Building Shareholder Equity.
The October’ 2002 issue of Forbes Global magazine USA ranked Asian Paints among the
200 Best Small Companies in the World for 2002 and presented the ‘Best under Billion’
award, to the company. One of the country’s leading business magazines “Business Today”
in Feb 2001 ranked Asian Paints as the Ninth Best Employer in India. A survey carried out
by ’Economic Times’ In January 2000, ranked Asian Paints as the Fourth most admired
company across industries in India.
Among its various other achievements, Asian Paints is the only company in India to have
won the prestigious Economic Times – Harvard Business School Association of India
award on two separate occasions, once in the category of “Mini-Giants” and the other in
“Private sector giants”.
The major decisions taken by the company which helped it to achieve the set goals were:
1. Consumer Focus: The company has come a long way since its small beginnings in
1942. Four friends who were willing to take on one of the world’s biggest, most
famous paint companies operating in India at that time set it up as a partnership
firm. Over the course of 25 years Asian Paints became a corporate force and India’s
leading paints company. Driven by its strong consumer-focus and innovative spirit,
the company has been the market leader in paints since 1938. Today it is double the
size of any other paint company in India.
2. Wide Range of Products: Asian Paints manufactures a wide range of paints for
Decorative and Industrial use. Vertical integration has seen it diversify into Speciality
products such as Phthalic Anhydride and Pentaerythritol. Not only does Asian Paints
offer customers a wide range of Decorative and Industrial paints, it even Custom-
creates products to meet specific requirements.
3. International Tie-ups: To keep abreast of world technology and to protect its
competitive edge, Asian Paints has from time to time entered into technology
alliances with world leaders in the paint industry. It has a 50:50 joint venture with
Pittsburgh Paints & Glass Industries (PPG) of USA, the world leader in Automotive
coatings, to meet the increasing demand of the Indian automotive industry.
Table 1: Tata’s Group Profile 2
In % Group Top 10 Top 20 Last 10
SALES 100 78 90 0.35
PAT 100 76 93 0.20
TOTAL ASSETS 100 72 87 0.80
NET WORTH 100 71 90 0.90
Contd...

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