Question

2.Select a real /hypothetical company of your choice and write an article titled as ‘Strategic Management in XYZ company’( Word Limit: Not more than 1000 words)

I choose unilever Company or WALMART.

You should try to include the following components in the write-up:

1- A brief introduction about the company and the industry

2- External Analysis

4- Internal Analysis

4- Current Strategy and

5- Conclusion

Students will:

*Recognize aspects of an organization’s environment that can influence its long-term decisions

*Identify the aspects of an organization’s environment that are most strategically important

*Apply the resource-based view of the firm to determine core and distinctive competencies

*Use the VRIO framework and the value chain to assess an organization’s competitive advantage and how it can be sustained

*Understand the competitive and cooperative strategies available to corporations**Understand the three aspects of corporate strategy

*Identify a variety of functional strategies that can be used to achieve organizational goals and objectives

*Gain insights into the strategy-making processes of organization

*Understand the contribution of various functional areas e.g. production, marketing, purchasing and supply management to the overall well-being of the organization

*Understand the relationship between social responsibility and corporate performance.

Pleas No parallelism and choose company talk about it and don't miss any of elements please

Answer 1

Strategic Management in Asian paints, India Company

Overview Indian Paint Industry

Indian paint industry started around in 1920.

The per capita consumption in India is 1.5kgs p.a., as compared to the global average of 15-25kgs p.a.

Compounded annual growth rate (CAGR) of 12-13% after liberalization (Excise duty reduction- 40% to 16%)

Expected to grow over the next five years from Rs 500 bn in FY18 to around Rs 800 bn by FY18.

Overview – Asian Paints

India's largest paint company.

One of the top ten decorative coatings companies in the world.

Started in 1942 by four entrepreneurs.

Started with a strategy “Going to where Consumer is”.

Driven by customer focus and innovative spirit.

Operates in 17 countries with 23 manufacturing facilities.

Revenue generated Rs. 12714 Cr (FY 2013).

PESTEL Analysis is given to understand the internal and external environmental factors

POLITICAL FACTORS

• India, the largest democracy in the world
• The political situation is more or less stable in nature
• Export oriented economy
• Import policies

ECONOMIC FACTORS

• Market based economy
• Second fastest growing economy in the world
• India is the third largest in term of purchasing power
• Inflation rate is 8% as on May 2014
• Introduction of FDI
• Exchange rate
• Change in crude oil prices
• Fiscal incentives for housing sector

SOCIAL FACTORS

• India is the second largest populated economy in the world
• Rise in price of raw material
• Cyclical nature of decorative paints

TECHNOLOGICAL FACTORS

• Emerging of IT sector
• Modernization of paint like (waterproof paints, Teflon coating,
• Creating colours shops etc.)
• Lead free paints
• Supply chain

ENVIRONMENTAL FACTORS

• Impact of volatile organic compounds (VOCs)
• lead, mercury and chromium free paints.
• Season and climate changes

LEGAL FACTORS

• Pollution Control Law
• Consumer Law
• Health and Safety Law
• Environmental Law

Porter’s 5 force analysis to understand both the competitive forces and the overall industry structure which are crucial for effective strategic decision-making.

BARGAINING POWER OF BUYERS

Household users -

The contractors: Higher bargaining power & more price sensitive

The end customer : Number of options are available Decisions are made based many factors

Industrial users -

A low margin high revenue business

The buyers knowledgeable

Price comparison is done effectively by the consumers

HIGH BARGAINING POWER

COMPETITIVE RIVALRY

About 80% of the organized market is catered by the top four players of the industry.

Existing companies

• Asian Paints
• Kansai Nerolac
• Berger Paints
• ICI
• Shalimar

High RIVALRY

BARGAINING POWER OF SUPPLIERS

Raw material intensive industrye.g-Tio2 Imported,

Few suppliers,

Availability of Substitutes of Raw Material Low

HIGH BARGAINING POWER

AVAILABILITY OF SUBSTITUTES

Lime wash is conventionally used substitute for paints.

Decorative paints segments an alternative option is wallpapers

White cement

Brick & stone Structure

MEDIUM SUBSITUTES        

THREAT OF NEW ENTRANTS

Growth rate much higher than global so global player may be interested.

Huge potential to increase per capita consumption. Thus Latent need exists.

Established foreign players may pose a threat by virtue of the knowledge and expertise

LOW THREAT

SWOT analysis of Asian Paints

Asian Paints: strategies

Customer Solutions

• A simple but unbeatable concept of "going where the customer is“.
• Asian Paints Helpline Services (Toll Free).

    Consumers call and ask queries related to painting.

• ASIAN PAINTS HOME SOLUTIONS.

    Offers painting services.

Customer Engagement

MOTO:

Engage the consumer in the painting process and fulfil all the requirements related to the world of painting.

• COLOUR NEXT: Prediction of colour trends in India.
• Kids' World: Painting solutions for Kids Rooms as well as Kids Corners.
• Royale Play: A collection of innovative and ready-to-use special effect finishes for interior walls.

Supply Change Management

• 2 chemical plants,
• 18 processing centres,
• 350 raw material and intermediate goods suppliers,
• 140 packing material vendors,
• 6 regional distribution centres,
• 72 depots are integrated.
• Virtual Integration :
• The Supply Chain Management is backed by IT .

Virtual Integration

• Asian Paints is the only company in India to have :
• Integrated SCM Solution from i2 Technologies, ERP solution from SAP.
• The successful deployment CRM, Business Intelligence and Portal software.
• Disaster recovery System : 24x7 availability of our IT infrastructure.

Backward Integration :

• Paint Industry is Raw Material Intensive Industry (70 %).
• TiO2 : 30% (Imported).
• Phthalpic Anhydride (PAN) : 20% (From CM à In-house).
• Pentaerythritol : 15% (From CM à In-house).
• Benefits:

1. 1) Immunize from Price Fluctuation.
2. 2) Saving In Transportation Cost.
3. 3) Facing Demand Uncertainty.

Forward Integration:

High End Customisation with only a limited set of bases and colourants, manufactured and transported throughout the supply chain.

Tinting Technology:

Asian Paints provided a choice of innumerable shades to the customer through a technology of tinting at the last retail store.

Inventory Management

• Average Inventory Level of 28 Days Sale against industry Average of 51 Days.
• Translate into 45 % lower inventory cost.
• Stock of finished goods is only 7 % of net sales half the Industry Average.

Asian Paints: Future strategies

• Focus on R&D to build strong and superior products.
• Outsourcing of the input materials.
• Increase dealers network in the rural area.
• Strengthen advertisement and sales promotion.