INDUSTRY ANALYSIS
Porter’sFiveForces:
Indian Paint Industry
Market
The market size of Indian paint industry is estimated at about INR 29100 crore.
The industry comprised of both organized and unorganized players with the former controlling about 65% of the market and the latter about 35%
The Indian paint industry is largely divided into two segments. Decorative paints
71% market share
Classified further into water based paints, growing at a higher rate, and solvent paints
Demand comes from both construction of new building as well as refurbishment of old building otherwise repainting
Thus it correlates with the growth in construction sector, disposable and per capita income Industrial Paints
29% market share
Comprises of automotive, general industrial, protective coatings, coil
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Paint Industry being one of raw material intensive and the raw material cost accounts for about 50-60% of the total cost of production and thus the profit of the industry players swings with the material cost.
Paints industry in India being highly competitive, players don't have the luxury to enjoy high gross margins for long. Price of end products would fall once the high-cost inventory gets exhausted and the industry gradually gets the benefit of lower raw material prices. Leading manufacturer Asian Paints has made a beginning with a price cut of 2% effective 01 March 2015.
Growth
The growth rate is estimated to be more than 2 times of GDP for decorative products. Given the thumb rule of 2 times of GDP growth the Indian paint industry is expected to grow between 8.5-9.4% for the fiscal 2013-14.
This reasons for high growth can be attributed to the growth in volume on account of increased market penetration efforts of industry players.
parts is expected to grow by 24 percent from 1994 levels to $16.9 billion in the
This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
The interesting part of this industry is the fact that there is no company with a dominant market share. Even though some revenue numbers might be higher for some companies, each company has a specialty that it brings to the industry. One of the main costs is manufacturing their products. A major reason the companies are moving manufacturing plants to Asia and South America is to lower manufacturing costs.
Price increases in the raw material mean that prices needed to be increased, but customers were still willing to pay for a quality product.
This increase in demand leads to an increase in the cost of rents in the
...ncompetitive compared to other firms. If firms cut price then they would gain a big increase in market share, however it is unlikely that firms allow this. If this occurs, as a result to that, other firms will follow and cut price as well. Demand will only increase by a small amount: demand is inelastic for a price cut.
... increasing slowly. Currently, Labor costs have been increasing speedily for over 45% of manufacturing costs. From the previous three years, no increase in the productivity levels of the workers has been seen. If it keeps happening, the company will lose its price advantage over its rivals.
Mattel required that factories in its supply chain use paint and other materials provided by certified suppliers. The company claimed that it did not put undue price pressure on suppliers, particularly as it related to paint. (p.3)
... its prices (Trefis Team, 2013). Moreover, petroleum price have a significant impact on its gross margin, as petroleum is one of a raw material of apparel product. In the past few years, the company had to face with the high oil price because of global economic that decreased its gross margin (Trefis Team, 2014).
There are many industries. Economist group them into four market models: 1) pure competition which involves a very large number of firms producing a standardized producer. New firms may enter very easily. 2) Pure monopoly is a market structure in which one firm is the sole seller a product or service like a local electric company. Entry of additional firms is blocked so that one firm is the industry. 3)Monopolistic competition is characterized by a relatively large number of sellers producing differentiated product. 4)Oligopoly involves only a few sellers; this “fewness” means that each firm is affected by the decisions of rival and must take these decisions into account in determining its own price and output. Pure competition assumes that firms and resources are mobile among different kinds of industries.
Increasing Returns. In some markets, the profits for high volumes of goods are extremely exaggerated. For example, in the manufacturing industry, each product requires a certain material and labor cost to produce it. Large companies are often able to under-cut competitors’ prices, drive them out of the market, and then raise prices again.1 Consequently, this increased volume increases profit, allowing such companies an even greater power.
The oil and gas industry, today, striving to discover a harmony between climbing worldwide request and lessening assets, and keep up control and circulation of working expenses. In the oil and gas industry today, most organizations are looking to expand the productivity of their worldwide portfolios during a period of developing questionable matter. Keep up superior ¬ pleasant pussy against high expenses, high costs, and expanded rivalry were never all the more testing.
Barriers to growth remain, however. High import duties make luxury goods expensive. Rich Indians tend to travel widely and may simply buy elsewhere. Finding suitable retail space is also proving a headache. So far most designer boutiques are situated in five star hotels.
The SWOT analysis is a useful tool for identifying our personal strengths, weaknesses, opportunities, and threats to our plans and goals. According to a “Fuel My Motivation” article (2010), this analysis considers internal influences that can positively or negatively affect our ability to achieve our goals. The internal factors are our strengths and weaknesses. Also considered are opportunities and threats, which are external influences that can have a positive or negative impact on the ability to achieve our goals. I will share how the self-assessment instruments and self-exercises in this course have contributed to assessing and understanding my strengths and weaknesses. I will also discuss techniques I will use to leverage my strengths and understand my weaknesses. In addition, I will consider opportunities that I can take advantage of and the threats that can possibly impede my progress.
test whatever it's a bad effect or not. So when it used on humans, we