ICI DULUX PAKISTAN

GROUP MEMBERS AYESHA JAMIL AFRIDI MEHROZ ALAM ALI TARIQ

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Executive summary
ICI dulux (paints) falls under the Imperial Chemical Industries Ltd. (ICI) group. After starting operations in Pakistan, it has been providing premium services to its users like free colour advice from colour experts. Its mission statement reflects optimism and dedication. Due to political and economic instability of the country, its business has been slightly affected yet it still manages to stay the market leader due to its quality services. The Pakistan paint manufacturing association represents the organized market of the paint industry while the unorganized is represented by cheap low cost paints and its substitutes. Pakistan as a developing country and the increased awareness of the people about paint brands provide lots of opportunity for growth for the company and the paint industry. Rising competition from new entrants in the industry and sale of fake paint under the companys name are ICI utmost concerns along with costly raw materials and contractual distributers. ICI can diminish some of its concerns by pursuing forward and backward integration, promoting and advertising more and taking steps to counter the fake paint problem among others.

Introduction
ICI dulux is a part of akzo nobel which is the largest paints and coating company in the world. Imperial Chemical Industries Ltd. (ICI) group started its operations in Pakistan in 1952. ICI in Pakistan operates in pharmaceutical, polyester, life sciences and soda ash as well, where soda ash reaps the largest profits. ICI paints business can be divided into 3 parts Industrial, Automotive Decorative

ICI main objective is to inspire their customers and give the luxuries of life through decorating their houses.ICI deals in all types of building materials related to paint. ICI spends 30M pounds on R&D worldwide. ICI dulux maintains the premium price in market which means they follow the trend of price as indicator of quality. ICI dulux provides premium services to its users where renowned designers and colour experts will not only assist consumers to find best style but also turn their imagination into reality at doorstep.
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Value Added Services include: 1. Colour Consultancy 2. Interior Design 3. Architectural Design 4. Home-fashion Design

They provide online support to their customers as well. The company top level management also makes sure that strategies ,policies and resources that are used achieve the companies objectives and targets are according to their plans that were made in the strategy formulation part.

Vision statement
What drives us is knowing that what is good for our customers today is not necessarily good enough for them tomorrow. What excites us is asking the unasked question. What inspires us is seeing the opportunity others cannot. What unites us is the intelligence to deliver where others have not. This benefits our customers because we sustain their future competitiveness and meet the consumers unspoken needs. This ambition defines us. This is the way we work. This is why we come to work.

Mission Statement
To be the partner of first choice for customers and suppliers, ensuring sustained leadership positions in the markets where we compete, delivering long-term business value through a high performance culture, innovation, ethics and responsible care

Evaluation of Mission statement according to 9 components

The 9 components are: 1. Customers

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2. Products or services 3. Markets 4. Technology 5. Concern for survival, growth, and profitability 6. Philosophy 7. Self-concept 8. Concern for public image 9. Concern for employees

We relate these components with the ICI mission statement that whether these components are reflected in the mission statement or not. Mission statement clearly reflects that company is loyal with the customers, than product and services are not mentioned in the mission statement, markets means company doesnt show their geographical position in the mission statement, about technology it is clearly mentioned in the mission statement that ICI is innovative and bring continuous improvement and introduce new product and services so company is technological oriented. Company is also concerned about their survival, growth and profitability they expand their business in all around the world because of this their profit is also high as well as their growth. ICI believe in the values and norms thats why they are successful .they produce those product which suits the culture of every country. Company is also concerned for the public image and employees. ICI produce the quality products thats why they are the market leader .they motivate their employees through different training programs etc too.

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Company structure:

Chairman and CEO Executive VP : chief HR officer, chief marketing officer, chief RND officer, CFO, chief creative officer chief operating officer -president of north division -president of centre division -president of south division

The organizational structure at ICI paints is a divisional structure, consisting of activities such as task allocation, coordination and supervision which are directed towards the achievement of the objectives of the organization. ICI-paints are divided in to different departments namely Marketing, Operations, Finance and. Every department has its tasks, objectives, policies decisions and results The employees in this organization truly believe that this type of organizational structure is necessary for their formal corporate culture which is prevailing in the organization. It also strengthens the values of their corporate culture and those values are cost minimization, imitation and innovation.

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Industry analysis
The Pakistan paint industry: The Pakistan paint industry is divided into structured and unstructured markets. The established branded companies fall into the structured markets where they collectively form Pakistan paints manufactures association (ppma) while the unstructured market is segmented by cheap low quality paint producing companies ICI dulux competitors: The two main competitors of ICI dulux are Berger paints and master paints they hold the majority market share after ICI dulux other than that silk paints, Nippon and happliac etc. hold less market share and are not strong competitors of ICI dulux. ICI dulux holds 60% of market share whereas Berger hold 20 % and the rest of the paint companies hold 20% of market share collectively

Porters 5 forces analysis

Threat of new entrants Threat of new entrants is high. The most important reason for this is the low entry barriers and the low capital requirement to enter into this business. Furthermore there is no glaring difference between products and switching costs are low which effects brand loyalty. Easily available materials ,supplies and skilled workforce also contributes to the attraction of this industry however competing with established and big brands and getting access to an effective distribution and supply channel may pose difficulties for the newcomers Bargaining power of suppliers Paint industry is a small market and the numbers of suppliers that compete in this market are in excess so the bargaining power of suppliers in this industry is low, as companies can switch over to other suppliers. However, the branded companies emphasize on quality of their materials and only a few suppliers can provide them with the expensive and limited raw material, this gives an edge to suppliers to deal in their own terms. Bargaining power of buyers

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Bargaining power of buyers can be categorized as a significant threat because rival firms like Berger paints and master paints offer more or less the same products and unsatisfied customers might switch over Threat of substitutes Substitutes like distemper, tiles wallpapers, bricks etc are available but generally the public does not opt for substituting paints with these as it would mean a compromise on quality. So threats from substitutes is not significant Threat of existing rivalry .threat from structured sector appears in the form of other branded paint companies like berger, master, silk etc while the sale of cheap, fake and low quality paint is a threat that is present from the unstructured sect PESTLE ANALAYSIS Political factors: Pakistan has been facing continuous political instability because of this instability, business environment is uncertain and there is a decrease in investment opportunities. Due to the frequently changes in laws rules and regulations it affects the flow of business operations. For example previous government decides to facilitate the chemical sector in the form of subsidiary but current government is planning to finish this facility. Because of the dire law and order situation it badly affects the business and foreign investment. Tax laws also affect the business revenue government providing facility to the paint industry i.e. 10% reduction in central excise duty. Economic factors: Economic conditions are also worse because of political instability. One of the key reasons of economic instability is inflation. High prices of petrol also affect the demand for products.. Unemployment problem is also faced by our society if serious steps are not taken by the government the unemployment rate will go high and will decreases the buying power of the people. Social Factors: Pakistani people are more conscious about the brands now and their lifestyles are changing rapidly because of the influence of Western Culture. In Pakistan construction businesses is
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very profitable and mostly people prefer ICI paints in their houses and because of increase in populations demand also increases. Technological factors: ICI paints is the market leader in Pakistan and reason behind this is technology that it is used by ICI and the companies who are technology oriented are more successful then other companies and also have a competitive advantage. Legal factors: Legal factors also affects the demands of the products and also cost of the products like in ICI 75% raw material is imported and after paying import duties production cost is high and it will led to decreasing profit margin. Environmental factors: Environmental factors also affects the paint industries such as weather and changes in climate. ICI profits depends highly on the environment because they produce weather shields that are used in houses, buildings etc.

Internal and External Factors:

External Factors Evaluation Matrix: Opportunities New Weightage Score 2 Weighted Score 0.2

Innovative 0.1

products which have not been developed in this industry Market penetration 0.2 4 0.8

and changing trends from low cost to high quality paints Capturing low end 0.2 consumers introducing a by new 3 0.6

product line for them

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Threats Fake Paint Political Instability Economic Instability New Entrants Total

Weightage 0.15 0.15 0.15 0.05 1

Score 3 3 3 1

Weighted Score 0.45 0.45 0.45 0.05 3.00

Internal Evaluation Matrix: Strengths Established Brand Good Staff High Market Share Weightage 0.15 0.05 0.15 Score 3 3 4 3 Weighted Score 0.45 0.15 0.6 0.6

Financial Stability of 0.2 the business Weaknesses Comparatively Higher Price Relatively flexible structure Promotional Weakness Limited themes/limited availability 0.1 0.15 less 0.05 Weightage 0.15

Score 3

Weighted Score 0.45

0.1

0.45

0.2

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SWOT analysis
Strengths Brand name: Affiliation with a multinational Weaknesses Marketing and promotion ICI paints do not focus much on its promotion and marketing to attract more customers. Many people are unaware of this brand and its features Price Because of their supreme quality and due to the cost of the imported materials,ICI offers a much higher price than its competitiors,this is a disadvantage because price is a major factor that forces buyers to switch brands. Distribution network It does not own its own distribution network it has to use servicers of outside vendors and distributors.

company i.e ICI global network Vast color scheme ICI offers a wider range of colors and assorted color schemes to choose form Quality ICI offers high quality original and durable synthetic paints in a market highly categorized by fraud

companies offering fake paints or un synthetic paints Abidance of safety polICIes and environmental polICIes ICI paints focuses on the safety of its employees and the safety of the natural environment due to its toxic paint chemicals and ingredients Customer satisfaction ICI has managed to create an

They have a network of dealers in majority of cities but retailers have to buy and transfer the paint themselves from the dealers to their stores and then sell it to the buyers

optimistic and professional image in the eyes of its customer due to its superior product quality and services and has been successful in creating its brand name ICI has a policy of delivering the

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paint orders to its customers within 3 hours ICI has hired special color advisors that provide free color advice to customers Technology With a computerized system for making and mixing paints .ICI can produce any hue and range of colour that their customer requires Nation wide network and

accessibility with a vast expanse of supplier and dealer network ICI is able to improve and upgrade their sales

Opportunities boost promotion ICI can capture the opportunity of higher sales volume and increased awareness about its products through investing in promotion and

Threats Competition New paint companies are setting up and targeting segments that paints havent been able to cater to Political instability Shifting governments and political scenarios may cause a change in rules and regulations regarding the paint industry and this may hinder ICI

marketing of its products amplify market ICI can increase the market for its products by making its products available in areas in which they werent available before i.e product development Pakistan pportunities development o

productivity and revenues Economic instability Inflation, defaulting customers due to financial difficulties and unexpected economic crisis can all cause a big

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Pakistan presents a lot of growth opportunities for the firm as Pakistan is a developing country, construction and housing business is growing rapidly Increased awareness of customer Electronic media and education has increased general awareness public about among the

blow to the companys productivity Fake paint Fraudulent dealers and fake

companies sell fake and low quality paints under the name of the ICI paints. This has a grave impact on the reputation and image of the company as customers think that they have been duped with fake paint by the original company

distinction

between fake or low quality undurable easily damaged paints and good quality paints with durable and long lasting benefits.

Recommendations:
After conducting a thorough research we have concluded that ICI can improve its condition by following some simple steps and these steps are: 1. Forward Integration. 2. Backward Integration 3. Steps against fake paint. 4. Capturing low end consumers. 5. Increasing marketing and promotion Forward Integration: ICI can increase the sales of its products and do the costs cutting while maintaining its product quality by doing the forward integration. ICI should use its own resources in order to supply its products to retailers instead of its dealers. Backward Integration: ICI gets the raw materials of the products through its foreign suppliers and as well as its local suppliers. We all know that there is a tremendous amount of economic and political
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instability in the country and polICIes of the government do change so If ICI start making the raw materials of its products by itself then it could prepare less expensive finished products which would decrease the overall costs and present a benefICIal product to the customers from the qualitative point of view and economical point of view.. Capturing middle class consumers: ICI is usually considered to be a product of high end consumers which every one cannot afford and thats why due to rising poverty and economic instability this image can backfire too so ICI should open a new line of products for the potential target market of middle class consumers. Steps against Fake Paint: ICI should start a campaign against the fake paint. It should differentiate its products with some significant difference and inform its potential target market about it through heavy electronic and print advertisements. Increasing marketing and promotion: If ICI invests in increasing its marketing and promotion it can make more people aware of its existing and new products

Conclusion:
ICI-Paints is the market leader in their particular industry but they should continue to improve their organization as their competitors are also improving day by day in this particular field. One more important point in this respect is that there is a lot of potential in this business and a lot of new small companies are emerging in this field. ICI will have to compete with them too. if it continues to capitalize on its strengths, try to turn its weakness into strengths by considering our recommendations ,try to minimize its threats and grab opportunities that market events create, ICI dulux can further enhance its position and market share and can maintain its position as the market leader.

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Bibliography
(Hammad 2010)
Hammad. "ICI Pakistan Limited." www.scribd.com. June 2010. http://www.scribd.com/doc/28219559/ICI-Pakistan (accessed november Sunday, 2013).

(Kamal 2009-10)
Hammad. "ICI Pakistan Limited." www.scribd.com. June 2010. http://www.scribd.com/doc/28219559/ICI-Pakistan (accessed november Sunday, 2013). Kamal, GN. ICI Paints. Paint Industry, Ali Akbar Group, 2009-10.

(ICI Dulux Resets its Position 2012)

Hammad. "ICI Pakistan Limited." www.scribd.com. June 2010. http://www.scribd.com/doc/28219559/ICI-Pakistan (accessed november Sunday, 2013). ICI DULUX Resets its Position. Aroojfatima (2012). Kamal, GN. ICI Paints. Paint Industry, Ali Akbar Group, 2009-10.

(Malik 2012)
Hammad. "ICI Pakistan Limited." www.scribd.com. June 2010. http://www.scribd.com/doc/28219559/ICI-Pakistan (accessed november Sunday, 2013). ICI DULUX Resets its Position. Aroojfatima (2012). Kamal, GN. ICI Paints. Paint Industry, Ali Akbar Group, 2009-10. Malik, M.Tariq. Internship Report On REPORT ON ICI PAINTS. Internship , Rawalpindi: Virtual University Pakistan, 2012.

(Internee 2010)
Hammad. "ICI Pakistan Limited." www.scribd.com. June 2010. http://www.scribd.com/doc/28219559/ICI-Pakistan (accessed november Sunday, 2013). ICI DULUX Resets its Position. Aroojfatima (2012). Internee. Internship Report on ICI Paints Pakistan . Internship, http://commerceplus.blogspot.com/, 2010. Kamal, GN. ICI Paints. Paint Industry, Ali Akbar Group, 2009-10.

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ICI DULUX PAKISTAN Malik, M.Tariq. Internship Report On REPORT ON ICI PAINTS. Internship , Rawalpindi: Virtual University Pakistan, 2012.

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