Asian paints ltd international business devision

Essay by pastnieceUniversity, Master'sA, April 2008

download word file, 3 pages 0.0

The main problem is misbalance of simultaneously meeting sales volumes expected, and to contribute to the company's goal of becoming one of the top five decorative paint companies in the world. On the one hand there are investments in new markets that require cash investments and therefore profit cannibalization from domestic sales, while on other an ambition to become top 5 worldwide.

3 Sub problems•How to increase ROCE (return on capital employed) in international markets up to 15%. AP IB primer goal is maximize profits in order to create maximum value for shareholders; therefore there are no financial subsidies to newly acquired markets from its parent company. Unprofitable markets are dropped, as it was with Malta and Mauritius. IB markets have to be self sufficient.

•An ambition to become a top five worldwide player by staying in 21small and diversified markets. According to Said Dani: “The targeted market was newer a very big market.

We choose our markets carefully and proceeded cautiously.” Part of AP strategy was to enter in very limited competition with no multinational company present. AP is collecting coins with the ambition to be a millionaire.

•In order to manage company across so many markets AP must have professional, dedicated, educated and foreseeing managers who would be as comfortable in any international market as they are in India to send them to new locations for research, for to communicate the AP strategy and overlook operations.


A2:Entry StrategyStrategic Partnering vs. Joint VentureJoint ventureJoint Venture involves Set Up New Company with Shared Ownership; Each Partner Invests; Divided Equity, Profits.

PlussesMinusesTransfer of technology/skills increased technical expertiseaccess to established markets and distribution channelsRespond more quickly to change.

Increase your market share.

Gain a new skill or area of...