Paint Industry Case Study

1024 Words5 Pages
4. KEY SUCCESS FACTORS: Cost and Price Drivers: Raw material constitutes about 57% of cost of goods sold. Major of them are based on petroleum products and hence petroleum prices are one of the most important cost drivers. Innovative Technology: A constant challenge exists in this industry for developing new products for better performance, cost reduction and exploitation of new materials. Distribution Channel: Decorative segment of the paint industry requires extensive dealer network for marketing and sales, especially in urban and semi urban areas. Brand Equity: Brand plays a major role in the paint industry, especially when it comes to high end segment customer as people in this segment are not very price sensitive. (Exhibit 7) 5. PROFITABILITY: The total size of the Indian Paint industry has been estimated to be INR 40,600 crore by Assocham in its 2014 review (11). The top six major listed paint companies in India enjoy a 49% share of the market in the whole sector with a combined Turnover of INR 19,212 crore as on March 2014 (Exhibit 3). The major players in the Paint industry are led by Asian Paints with a market share of (26%), Berger Paints (8%) and Kansai Nerolac (8%). The Net Margin (PAT/Sales) (Exhibit 4) enjoyed by the major players in the market is around 9%. Asian Paints leads pack in Net Margin with 11.22% which is…show more content…
A study of the urbanization in India estimates that 700-900 million square meters of commercial and residential space needs to be built every year(equivalent to two Mumbai’s) to support the growing urban cities in India (13). More than 100 million households are expected to join the Indian Middle Class by 2030 (Exhibit 5). The availability of housing loans has also impacted the demand for decorative paints in the Indian diaspora. The housing loan segment in India has galloped at a pace of 1605% from 2000 to 2013 as per the National Housing Bank
Open Document