Berger paints PDF

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BERGER paints is a local paints brand which has been serving in Bangladeshi consumers for many years.

This report has been written on the basis of strategy analysis of this organization.



This report has covered different aspects of strategic area of BERGER pai...

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Submitted to: Dr. Md. Zahid Hossain Adjunct Faculty

Submitted By: MD RIFAT HOSSAIN 2018-3-95-077 MGT600

EAST WEST UNIVERSITY

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Letter of Transmittal 5th December, 2020 Dr. Md. Zahid Hossain Adjunct Faculty Masters of Business Administration East West University Subject: Submission of report on “Strategy analysis on BERGER Paints”.

Dear Sir: With due respect, it is my great pleasure to submit the report on “Strategy analysis on BERGER Paints” as the requirement of MGT-600 course for your consideration. I have completed my report on “BERGER Paints”, a well-known paints brand in Bangladesh. My main inducement was to prepare this term paper according to your instructions while considering the guidelines of the MBA Program. I made sincere efforts to study related materials, documents, observe operations performed in BERGER paints and tried my best to enrich this report by providing what I have learned throughout the MGT 600 course. Hence, I am submitting my report, hoping that you will appreciate my instructive and comprehensive approach. Thank you for encouraging me for working on this interesting topic. Kindly accept my report and oblige thereby.

Sincerely yours, MD RIFAT HOSSAIN 2018-3-95-077 Masters of Business Administration East West University

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Table of Contents:

Contents Executive Summery PART 1: INTRODUCTION 1. Introduction

PART 1

PART 2

PART 3

PART 4

PART 5

1. Origin of the study 1.3 Objective of the report 1. Scope of the study 1. Methodology of the report 1. Limitation of the report PART 2: LITERATURE OVERVIEW 2.1 History Of Paints 2. Paints In Bangladesh PART 3: COMPANY OVERVIEW 3.1 Company Overview 3.2 Mission & Vision 3. Key Personnel 3. Berger paints product list: PART 4: STRATEGY ANALYSIS & FINDINGS Chapter -1 4.1.1 Strategic Analysis 4.1.2 Analysis of Statements 4.1.3 Balanced Scorecard: Chapter-2 4.2.1 Porter's 5 forces model 4.2.2 Pestel Analysis Chapter- 3 4.3.1 SWOT Analysis of Berger Paints: 4.3.2 Key success Factors 4.3.3 Value chain analysis (VCA) Chapter-4 4. Five Generic competitive strategy Chapter-5 4.5.1 Ethics 4.5.2 CSR Activities Chapter- 6 4.6.1 Strategies of Berger paints: 4.6.2 Growth strategies PART 5: CONCLUSION 5.1 Recommendation: 5. Conclusion: References:

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BERGER paints is a local paints brand which has been serving in Bangladeshi consumers for many years. This report has been written on the basis of strategy analysis of this organization.

This report has covered different aspects of strategic area of BERGER paints. First of all the history of paints has been described here, how the paints has evolved throughout the decades has been described in this report. It also covered the present situation of the paints industry in Bangladesh, how it is performing and how it is facing its problems.

It has covered the mission and the vision of BERGER paints and the critical analysis of these segments. It also covered the key personnel of this organization and product variety.

The main focus of this report is to highlight the key strategy that helps it to run in the market and gain competitive advantages. It covered the SWOT analysis that described the internal and external factors of this company. Here also described how they handle the threat coming from the market and the surrounding company environment. Here how the company is positioning themselves in the current market scenario has described by generic competitive strategy. How different segments and departments are collaborating and creating value chain activities also described in this report.

Some strategic management steps also been described here in this report. How they are competing in markets, which strategies they are taking currently and what is their future planning is described in this report. CSR activities and ethics are also covered in this report.

Overall, by this report the key factors of BERGER paints has been described and tried to cover the whole paint scenario in Bangladesh market in brief. Strategy that has been used for running in the market are described in this report.

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PART 1: INTRODUCTION 1.1 Introduction Awarded 8 years in a row as the best paint brand of Bangladesh – Berger Paints Bangladesh Limited is one of the oldest names in the paint industry, yet, it is one of the most technologically progressive companies in the country. It is constantly determined towards revolutionizing superior quality products and services with a steadfast track record of being one of the fastest developing paint companies in the country. With more than 250 years of rich heritage, Berger has evolved and transformed itself in becoming the leading paint solution provider in the country with a diversified product range that caters to all painting needs and also provides unparalleled services. This heritage is guarantee of excellence and trustworthiness and is carried proudly by all Berger products. Berger Paints Bangladesh Limited is headquartered in Dhaka, with 14 strategically located sales depots, 14 Home Décor outlets across the nation and 2 factories in Dhaka and Chittagong. With an employee strength of about 1000 and a countrywide distribution network of above 3000 dealers, Berger is admired as a forerunner in the sector with a vibrant portfolio of paints.

1.2 Origin of the study East West University is an institution that promotes eastern cultures and values and meaningfully blends eastern and western thought and innovation. To do this provides graduate degree on different major subjects like Marketing, Finance, HRM, Economics etc. Strategic Management (MGT600) is one of the courses. Precisely it teaches us how a company should take their strategic option for their competitive advantages While doing this course, we have learned the factors of strategic management, value chain activities, company environment and so many other important things. To implement all of those or in other way to practically experience those issues Dr. Md. Zahid Hossain, course instructor of Strategic Management has given us this term paper on “Strategy analysis BERGER PAINTS”.

1.3 Objective of the report By doing this report, I will be able to know the nature of personal selling of “BERGER PAINTS”, their philosophy and ethics. I will also be able to provide recommendation for “BERGER PAINTS”. I will also be able to understand the salesmanship behavior and how they convince their customer through personal selling. I will also know about the consumer’s relationship with the employees of “BERGER PAINTS”. I will also find out what they feel about “BERGER PAINTS”.

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The broad objective of this paper was to carry out an intensive strategic study on BERGER Paints Bangladesh Ltd. i.e. gather and compile all possible relevant data regarding the paint industry in Dhaka and provide an accurate depiction of the recent development in this sector relating to the concepts of Business Strategy learned in classroom sessions till date. Specific Objectives 1. Understanding the principles of mission, vision, core values, objectives and their application in respect of BERGER Paints Bangladesh Ltd. 2. External and internal environment analysis (SWOT, PESTEL, Porter’s Five Forces) of BERGER Paints Bangladesh Ltd.in the sector. 3. Evaluation of resource and position of BERGER Paints Bangladesh Ltd. Analysis of generic competitive strategies for BERGER Paints Bangladesh Ltd. 4. Identification of important business strategy choice and their effect on the overall organization. 5. Investigation on the strategies for competing in the market, ethical business practices, managing internal operations and promotion of good governance. 6. Recommendations for enhancement and growth for BERGER Paints Bangladesh Ltd.in Bangladesh.

1.4 Scope of the study The report is prepared concentrating on “BERGER PAINTS”. The area of study was only Bangladesh country. It is a comprehensive report based on structured information, our perception and knowledge and books of “Strategic Management”.

1.5 Methodology of the report This term paper has been made on the basis of different kinds of information. This information was collected from two types of sources. 1.6 Primary sources: Primary sources are the information got from the work experiences and the knowledge sharing from different. As my job is B2B selling part, I have gathered most of the information from different other department and with the information from higher authority 1.7 Secondary sources: Secondary information was collected from the websites of ”BERGER PAINTS”. Theoretical topics are covered from different books, journals or articles.     

Berger’s Bluebook The website of Berger (www.bergerbd.com) Prospectus of Berger Different journals and publications Other Research Papers 7

1.8 Limitation of the report In this research I faced some obstacles that hindered me from obtaining the objective of my project. In brief the problem that I faced is;     

 

A major limitation of the report was that only dealers were selected as the respondents. Most of the traders are very much afraid of disclose the information about sales. Time and cost constraints also other limitations regarding this research. Most of the traders of paints are illiterate or little educated. Every organization has some rules and regulation regarding its privacy policy. So does Berger paint Bangladesh Ltd. Moreover financial information is regarded more sensitive. That is why I failed to collect some market share related information in different months which would have proved very effective in preparing the report. However this limitation is not very unnatural. Lack of experience of the researcher. As the report is based totally on personal observation, personal bias might have hampered the findings. I might have unintentionally missed any important point that I should have covered in my project work.

Bangladesh does not have organized secondary data of this sector unlike most developed countries. Thus, the information generated from primary research may not reflect the precise scenario of current needs and our limited sample size may not be large enough to make accurate generalizations about the entire population.

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PART 2: LITERATURE OVERVIEW 2.1 History Of Paints

Contemporary paints and coatings consist of countless compounds uniquely formulated to fulfill the varied requirements of hundreds of thousands of applications. “Paint” ranges from the broad group of environmentally-sound latex paints that many consumers use to decorate and protect their homes and the translucent coatings that line the interior of food containers, to the chemically-complex, multi-component finishes that automobile manufacturers apply on the assembly line.

Paints and coatings have evolved from the simple Early Man colors on cave walls into a primary protective barrier between our possessions and our environment. 30000 Year Ago Paint – the group of emulsions generally consisting of pigments suspended in a liquid medium for use as decorative or protective coatings – made its earliest appearance about 30,000 years ago. Cave dwellers used crude paints to leave behind the graphic representations of their lives that even today decorate the walls of their ancient rock dwellings. 1700-1867 The paint and coatings industry, however, had to wait for the Industrial Revolution before it became a recognized element of the American national economy. The first recorded paint mill in America was reportedly established in Boston in 1700 by Thomas Child. A century and a half later, in 1867, D.R. Averill of Ohio patented the first prepared or “ready mixed” paints in the United States. Mid Late 1800 In the mid-1880’s, paint factories began springing up in population and industrial centers across the nation. Mechanization was making the manufacturing process accessible to a larger and less specialized group of entrepreneurs. Th weight of prepared paint makes it expensive to transport, so a decentralized structure of small manufacturers in discrete markets dominated the industry until the mid-1900s. Early 1900 Besides mechanizing and professionalizing the paint industry, the Industrial Revolution also created vast new markets for paints and coatings. Virtually every product created on an assembly line — from the Model T Ford to the latest-model television — makes extensive use of paints and coatings to beautify, protect and extend the life of the manufactured goods.

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Before Wwii As soon as the impact and potential risks of various paint components have been quantified, paint manufacturers act. Historically, the industry readily responded to environmental and health concerns by altering the chemistry of its products to control risks. Paint manufacturers started replacing lead pigments in some paints, for example, before World War II, when safer alternatives became available. 1950-1970 Industry consensus standards limiting the use of lead pigments date back to the 1950s, when manufacturers led a voluntary effort to remove lead from house paints. Common house paints have contained little, if any, lead since then. In 1978, the Consumer Product Safety Commission banned the use of lead in consumer paint. At PresentMany of today’s paints and coatings may go unnoticed by the consumer, but play immeasurably valuable roles in delivering high-quality foodstuffs, durable goods, housing, furniture and thousands of other products to market. Total value of product shipments for the industry were approximately $28.4 billion in 2018.

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2.2 Paints In Bangladesh Elite Paint was the first-ever paint company to have been established in Bangladesh it was in 1952.

The Asia Pacific region occupies a substantial share in the global paints market thanks to the presence of numerous developing countries, including China, India, Vietnam and Bangladesh, which have been witnessing a surge in investment in the development sector in the recent years. Manufacturing in the binuclear paint industry of Bangladesh mainly takes place in megacities like Dhaka and Chattogram. This industry has virtually doubled in size over the last 10 years, creating direct employment opportunities for thousands of people while indirectly providing livelihoods to many. In Bangladesh, the annual consumption of paints currently stands at about 180,000 tones. The sector recorded an over 6 percent year-on-year growth in recent times thanks to the rapid urbanization in a country of around 167.8 million people. The market blessed with high growth potential and congenial atmosphere has helped paint manufacturers strengthen their foothold in the south Asian country with innovative solutions and services, according to Bangladesh Paint Manufacturers’ Association. The experts and real estate sector leaders believe local and foreign investments have enabled the paint industry to achieve an annual growth of around 7-8 percent on average. The Tk 3,700 crore industry in Bangladesh remains highly competitive with the presence of over 45 operational entities. In 2017 alone, the industry contributed over Tk 550 crore to the national exchequer in the form of taxes. The sector is expected to grow by 8 to 10 percent per annum as there is scope for increase in consumption backed by economic growth. Companies are bringing in new types of paints that can be used at hospitals and other color sensitive areas. Fire retardant paints are even being used to reduce fire related incidents. Plastic emulsion, distemper, weatherproof exterior coat and synthetic enamel are the key products that hold the major market share. Plastic emulsion and distemper are close substitutes of each other. The emulsion is basically used in high-end residences all over the country and distempers are economy class products generating demand in semiurban and rural markets. The development in the real estate sector, gradual increase in consumer awareness about the need for protection of houses and increasing urbanization fueled the growth of the paint industry. However, the spiraling prices of raw materials in international markets, depreciation of the local currency and new supplementary duties have slowed down the sector’s growth to a great extent in recent times. 11

According to Dhaka Tribune this is the current market share of different company where foreign company leading the market and local company is falling behind.

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PART 3: COMPANY OVERVIEW 3.1 Company Overview The origin dates back to 1760, when Louis Berger – a young German visionary, started dye and pigment making business in England. Louis involved his family into the business and eventually changed the status of the company to Louis Berger & Sons Limited. The company grew and expanded rapidly with a strong reputation for excellence in innovation and entrepreneurship. Augmented by the dreams of Louis Berger, the unrelenting expedition for conception and revolution in the world of color and paints still continues. 2005 Enlisted in Dhaka Stock

Exchange (DSE) and Chittagong Stock Exchange (CSE). 2003 Relocation of Corporate Head Office to newly built Berger House in Uttara, Dhaka from Chittagong. 2000 J&N Investment (Asia) Limited UK, the majority shareholder of the company purchased the government shareholdings. 1999 Establishment of a State-of-the-Art Paint Production Plant at Savar, Dhaka. 1990 Establishment of 100% owned subsidiary company Jenson & Nicholson (Bangladesh) Limited focused on trading and indenting 1980 The name of the company was changed from J&N (Bangladesh) Limited to Berger Paints Bangladesh Limited. 1971 Duncan Macneil sold their shares to the majority shareholder J&N Group. Dada Group's share was ultimately vested with the Government of the People’s Republic of Bangladesh after the independence of the country. 1970 Set up of first paint factory at Kalurghat, Chittagong. The shareholders were Jenson & Nicholson (J&N), Duncan Macneil & Co. Limited and Dada Group. 1950 Berger commenced the paint business in the Indian sub-continent. Initially the paints were first imported from Berger UK and later from Berger Pakistan 1760 In 1760 a visionary German named Louis Berger, founded dye and pigment making business in England. 3.2 History of Berger Berger is one of the oldest names in paint industry detailing back more than 200 years to 1760. Lewis Berger, a German national, founded dye & pigment making business in England. Lewis Berger & Sons Limited grew rapidly with a strong reputation for innovation and entrepreneurship culminating in perfecting the process of making Prussian Blue, a deep blue dye, a color widely used for many European armies’ uniform. Production of dyes & pigments evolved into production of paints & coatings, which till today, remains the core business of Berger. Berger grew rapidly by establishing branches the world over and through merging with other leading paint & coating companies.

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3.3 Berger in Bangladesh Berger Paints began its painting in Bangladesh since independence. And this has been a footstep to bring more than 230 years of global paint industry experience into Bangladesh. In 1970, Berger Paints Bangladesh Limited (BPBL) erstwhile Jenson & Nicholson had set up its paint factory in Chittagong at an estimated investment of TK.4 million. The shareholders were Jenson & Nicholson (J& N), Duncan Macneil & Co Ltd and Dada Group. Duncan Macneil subsequently sold their shares to majority shareholder J& N group. The Dada group’s share ultimately vested with the Government of Peoples’ Republic of Bangladesh after the independence The name of the company was changed from J& N (Bangladesh) Limited to Berger Paints Bangladesh Limited on 1st January 1980. In August 2000, J& N investment (Asia) Ltd purchased Government sharehold...