Last time we elaborated on the SWOT analysis of the dental hygiene giant, Colgate. This time we set our eyes on decoding the SWOT analysis of Asian Paints, one of the most trusted and renowned brands of India.
Asian Paints is a multinational paint company that is headquartered in Mumbai. It is engaged in the manufacturing, selling, and distribution of paints, as well as the provision of related services. A household name in India, the company’s reach is across 20 countries and is a market leader in terms of both innovation and sales. They are most known for their out of the box marketing which has captivated everyone’s interest for decades.
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In this blog, we will decode the success of the company by conducting a SWOT analysis of Asian Paints. Yet before we do that, let us first learn a bit more about the company, its history, products, competitors and financial status!
About Asian Paints
Asian paints were founded in 1942 by four friends -Champaklal Choksey, Chimanlal Choksi, Suryakant Dani and Arvind Vakil – as a partnership firm. The company’s beginning predates the freedom of India, and due to the import ban that took hold on the country during World War 2, the company was able to grow in the country without facing any competition at the start. It took them over 25 years to become one of the leading paint manufacturers in India and became a corporate force across Asia, becoming the 3rd largest corporation in the continent in the industry.
The company is still majorly owned by 3 out of the 4 original Jain families that started the firm, and a part of India’s legacy business family concerns. Due to their close association with India’s freedom struggle and timing, the company found a large nationalistic appeal with its audiences. Apart from that, it has always been famous for its marketing efforts and iconic advertising. In 1954, R.K. Laxman, the legendary cartoonist, was the creator of ‘Gattu’, the mascot of the company and was widely popular.
Asian Paints is known to be at the forefront of walking the silver lining between economic appeal and innovation. The first such product that foreshadowed how the company will outpace its competition was their ‘Tractor Emulsion’ paint, which was a cross between cheap peel off paints and expensive but high-quality plastic paints. Since then, the company has stuck to their success formula and become a behemoth of the industry with an unshakeable position in the market.
| Founder | Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, Arvind Vakil |
|---|---|
| Year Founded | 1 February, 1942 |
| Origin | Mumbai, Maharashtra, India |
| No. of Employees | 7,600 (2020) |
| Company Type | Public |
| Market Cap | $2.7 billion (2021) |
| Annual Revenue | $3.4 billion (2020) |
| Net Profit | $360 million (2020) |
Products of Asian Paints
The company boasts a wide portfolio of products:
- Chemicals
- Decorative paints
- Home Decor and Fixtures
- Industrial finishing products
- Coatings
Competitors of Asian Paints
The organisation receives competition in different markets from an array of domestic and international players:
- Kansai Nerolac Paints
- Sherwin-Williams
- Nippon Paint
- PPG Industries
SWOT Analysis of Asian Paints
SWOT analysis is a planning tool that helps an organization to determine its strengths, weaknesses, opportunities and threats. This tool is useful for strategy building, corporate planning, marketing, and finding competitive advantages. These attributes are divided into two factors: internal and external. Strengths and weaknesses are considered to be the interior factors while opportunities and threats are considered to be the external factors.
Let us understand it better by looking at the SWOT analysis of Asian Paints.
1. Strengths
- Market-share: The leading paints manufacturer in India has over 54% of the market share in the industry far greater than any other paint manufacturer in India by a long shot.
- Steady growth: Asian paints have maintained its position on top of the paint industry by being able to grow steadily by 8-12% over the past 5 years financially, this has helped the company a great deal and made sure that the company stays at their spot.
- Strong International presence: Asian Paints has a good amount of presence internationally as they are operating in about 19 countries and have over 25 manufacturing units across the globe. They serve more than 65 countries across the world and are considered to be in the top 5 paint companies in Asia.
- Technological advancement: Asian paints have been investing in technological advancement for decades, one of the many reasons that Asian paints have been able to dominate India’s paint industry. They had bought a supercomputer way back in 1970 when most people could not even afford a laptop, they bought it for about 8 crores, which is ten years before ISRO bought it. With the help of the supercomputer, they were able to collect more than double the data than their competitors.
- Wide range of products: Asian Paints are not only in the paint business for homes but they are also present in the Industrial coating, Decorative paints, Asian Paints Royale which is one of their most unique ideas, Ancillaries, and more. This shows their wide Product portfolio that allows them to cater, different segments and industries.
- Marketing campaigns: One of the biggest reasons, for the company’s success, is its great marketing campaigns. Saif Ali Khan has been the face of this company for many years and recently Soha Ali Khan has joined to boost their campaign.
- Brand Value: Asian Paints was ranked 20th in the Top 20 best brands in the Interbrand report by The Economic Times. And was also featured in The Top 20 Most Innovative companies in the world.
- Strong supply chain Management: Asain Paints has achieved a strong supply chain by using their superior technologies like the Supply chain management system that integrates regional distribution, plants, with integrating supply chain management, with an enterprise resource planning solution from SAP.
2. Weakness
- Low Market Share in Industrial and Auto Paint: In the Industrial paint market and the Auto Paint market, Asian Paints has a low market share of about 15% in the industrial paint sector and about 20% in the auto sector which is lesser than its competitors which are Kansai Nerolac and AkzoNobel.
- Low International Business: Despite being one of the top 5 paint companies in Asia, the international business of the company is lower than expected in various national markets.
- Production and Inventory problems: In the decorative paints industry which Asian paints are a part of the customer tastes and needs change very fast and trends becoming obsolete in days. Hence this is a big problem in which no company can prepare for as the taste and needs of customers can change anytime, so production planning and inventory problems are something that the company faces regularly.
3. Opportunities
- Market Share in Industrial and Auto Paint: Considering the current market situations, Asian Paints has a huge opportunity to considerably increase their market share in both the Industrial and the Auto Paint sectors as the industry segment requires high-class technology which can be easily afforded by Asain Paints.
- Growing Indian Economy: Asian paints have a big opportunity in India as with the growth of the India Economy and with the increasing development of infrastructure undergoing, they have the chance to increase their revenue base in India by venturing and focusing in smaller cities to increase their sales.
- Emerging Nations: The company can achieve greater success by focusing on the emerging economies of the world as they are the untapped market that is looking for companies to help and support them. This could give Asian Paints the edge it needs to get ahead of its competition.
- Government Policies: Government policies like rapid urbanization, easy availability of home loans, and extension of CLSS will undoubtedly increase the demand for paint and with Asian Paints strong dealer network, innovative products, and royale play, Asian paints can make a massive revenue out of this.
4. Threats
- The scarcity of raw materials: Every industry to function well has a high demand for raw materials and these raw materials are required to control the pricing of the product. If the scarcity of raw materials occurs the materials required by the paint industry increase in value, and so does the value of paint. The jump in prices of paint can be a big threat to the paint industry, as the higher the prices of paint go this can affect the selling of paint, which in turn gives lower revenue.
- Slowdown: Any form of Slowdown will have a direct negative impact on the economy which in turn will affect the construction industry and then the paint industry will be affected (covid pandemic). Most of the raw materials that are used to manufacture paint are imported so, in case of a pandemic, or country tensions, the company goes into loss because of loss of materials, manpower, and more.
- Government regulations: Regulations and laws issued by the government can sometimes have an adverse effect on the company.
With the SWOT analysis of Asian Paints, we were able to understand a lot about the company and the industry at large. Let us conclude our learnings in the conclusion below.
Conclusion
Asian Paint is an Old and established company and a market leader in the paint industry. The company is performing well and had significant growth over the years. The marketing and promotional strategies of the company are very unique and creative which has made Asian Paints a synonym for paints. Rapid changes in consumer choices have been a problem for a long time in the industry which causes a lot of loss of inventory for the company, delete to build a system which gives them quick supply as per consumer needs. Overall the company is performing very well and needs to sustain its position by staying relevant to consumer choices.
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