Introduction
Social enterprises are organizations and/or businesses that provide products and services with the goal of promoting the development of the social economy. This suggests that the organization’s main objectives are fundamentally focused on enabling society by developing some practical ways to alleviate the issues the neighborhood is experiencing. The majority of social enterprises, in general, fall into one of three categories: business-oriented, social ownership-based, or social aim approaches. The routine process of producing goods and distributing them to the market as services is essentially what is meant by the term enterprise oriented.
Asian Paints, the company was established in 1942 as a partnership firm by four friends, Champaklal Choksey, Chimanlal Choksi, Suryakant Dani, and Arvind Vakil. It became India’s leading paint company for more than 25 years. Aside from providing a range of paints for both decorative and industrial use, wall coverings, and adhesives, they are also active in the home improvement and décor industries and even offer bathroom and kitchen products. Additionally, the business produces, markets, and distributes paints, coatings, items for the home, toiletries, and services associated with these industries (Wheelen et al., 2018). Asian Paints has developed significantly since its founding in 1942 to become the leading company in India and the third largest company in Asia. Recently the company has been undergoing challenges caused by customers’ complaints.
Pricing Strategies and Marketing Mix
Asian Paints uses effective pricing strategies to increase sales. Along with the goal of maximizing profits, it has other considerations when determining prices for goods and services. It considers important factors in pricing strategies which include financial security, brand recognition, and corporate identity. With the recent issues of customers’ complaints about the paints, the manager clarified their pricing. Market penetration pricing, premium pricing, bundle pricing, and economy pricing are typical pricing tactics. Product, price, place, and promotion make up the marketing mix, also known as the four Ps (Scarborough and Cornwall, 2019). The company promotes the business by offering extra services to their customers. It offers services to keep its clients and maintain a sustainable demand to remain among the leaders in its market segment. Considering the customer complaints about some of our products they considered talking to all suppliers of their products and agreed on the measures they would need to reduce the complaints.
Benefits of Social Responsibility
A social responsibility framework holds individuals and organizations responsible for upholding their civic duties and carrying out actions that will benefit society. A business or person is thought to be acting socially irresponsible if they violate social norms or ignore common values (Hosta and Zabkar, 2021). This theory contends that managers must put an equal amount of effort into maximizing profits and safeguarding the interests of the neighborhood and society. Its advantages include improving internal culture, boosting client loyalty and advocacy, enhancing brand recognition, giving a company a competitive edge, attracting top talent and boosting retention, and making a business more appealing to investors.
Quality Measures to be Adopted
When attempting to boost sales and keep clients, customer satisfaction is crucial. A successful company should prioritize this factor to entice repeat business. Keeping customers satisfied is a crucial tasks business should promote (Sudari et al., 2019). Relevant strategies for ensuring client satisfaction include increasing annual revenue, reestablishing a favorable reputation through reviews and recommendations, competing in the market, lowering the cost of acquiring new customers, and increasing customer retention rates. Gaining client trust is a critical objective for any business.
Sources of Finance and Service Range
Due to its unique organizational structure, Asian Paints raises its money through grants and investments. Additionally, foreign partners, presented by fashion, constructions, and some other brands and known as angel investors, are interested in investing money in the business (Bonini et al., 2018). Companies that provide startups with seed capital are known as seed funding firms. Organizations called venture capital funds to pool large sums of money and invest it in new businesses. New products will be created as the company sells out of its current offerings. The company’s financial stability also has a great impact on the quality of manufactured products. In Appendix, Table 1 is presented, which demonstrates the percentage of money Asian Paints acquired from investors and grants.
Product Portfolio
Product portfolio analysis aids management in choosing where to invest important resources. A happy customer is loyal, and in the product portfolio management process, this should be taken into account. The Asian Paints Company has to resolve the issues their customers complain about since this largely affects their production and supply. The business offers affordable products to ensure a stable demand in the future. Asian Paints achieves the following objectives through product portfolio management: checking the product’s performance, increasing efficiency, and expanding the assortment. By monitoring market trends, the business can better recognize customer needs and adapt to changing market trends and assemble data. As a result, communication between teams and departments is improved.
Product Extension Strategies
An extension strategy is a tactical solution used to boost a product or service’s profitability to keep it out of decline and in the maturity stage of the marketing product lifecycle. Some extension strategies include rebranding, providing discounts, and looking for new markets. Rebranding is the process of changing the appearance and feel of an existing product to set it apart from the competition (Gizem, 2022). Creating new shades of paint is also a mechanism for ensuring the company’s expansion. One can use the colors available by mixing them to create a new shade.
PESTLE Analysis
A tool for getting a comprehensive picture of the business environment is PESTLE analysis. Factors related to politics, economics, society, technology, law, and the environment are collectively referred to as PESTLE. It enables a business to comprehend the elements that may have an impact on a new market or industry. This analysis will assist in identifying risk factors because various criteria may be valued distinctively. A company can decide on how to carry out its operations after performing this analysis. In Appendix, Table 2 shows how these factors affect the business.
Political Factors
The political section provides information on the political system and the major players who are important to the country’s business operations. With a number of economic issues, such as poverty, which is thought to be a result of government actions, Asia’s political system is unstable (Kruse, Wach, and Wegge, 2020). The tax rates vary widely with the lack of structural adjustment policies from the government (Yershova, 2018). Recently, the international monetary funds and the World Bank have designed structural adjustment policies for the Asian government to encourage successful development.
On the other hand, when analyzing the economic and political statistics of Asia, this is evident that it stands in a better place compared to other nations in relation to economic and political stability. Asia is a nation that best fulfills the demands of a prosperous life. It grants preferential tariff rates for the members of the European Free Trade Association through either a membership or having a signatory. Therefore, this will be easy and effective for Asian Paints to expand its operations in Europe.
Economic Factors
These include elements that have an effect on customers’ disposable income and spending patterns. Due to poverty as a common social phenomenon in Asia, the local population would prefer cheap products that would meet their level of income. Thus, this would be challenging for such a business as Asian Paints to set up a supermarket chain in conditions of the existing market problems related to the population’s poverty level. Therefore, the company’s management should pay more attention to the economy in general and not only the company’s current assets.
Social Factors
The social part enables an understanding of consumers’ demographics based on income distribution, rural-urban segmentation, and educational scenario. Population growth, age distribution, health consciousness, career attitudes, and other factors are among them. These elements are particularly important because they directly affect how marketers perceive customers (Backer, 2019). For instance, Asia has made great strides in the improvement of education and literacy rates over the last years.
Technological Factors
The technological factors section provides strategic information on technological laws and policies, innovation gaps, and patents within a given country. Since India has a developed IT market, Asian Paints can adapt available developments in its operations. At the same time, the company’s business should pay particular attention to business administration as a process that allows for combining the necessary areas of work with optimization tools (Shang, 2020). Otherwise, the risk of losing a competitive advantage arises due to slow innovation.
Legal Factors
The section provides information on the legal structure, tax regimes, and the laws to begin a new business in a given nation. The legal dimensions of a specific environment affect business practices. The laws that might affect the business in question are associated with consumerism, employee relationships, and competitive practices. Some regulations should be viewed from the perspective of various agencies, including environmental protection agencies, equal employment agencies, and others.
Sources of Information
Various data collection techniques were utilized to gather the necessary information. The research was mainly carried out through interviewing involved stakeholders, observing social enterprise establishments, and reviewing secondary materials, such as articles, journals, and other academic publications focusing on social enterprises in and outside of Asia. After the interviewing process, a feedback report was obtained. Selecting the respondents was based on such factors as the age and social class level to assess different cultural perspectives and opinions of the social enterprise sector in the country.
One-on-one conversations were utilized as the main instrument of communicating with the stakeholders. As a supplemental analytical technique, analyzing the respondents’ facial expressions was used. This is a convenient practice that may help obtain unbiased answers even without asking (Calvo MartÃnez et al., 2019). The data was credible because most of the people who answered the questions were users of these paints, employees who worked in the company, as well as suppliers. Most of them had interacted with the product and services offered by Asian Paints.
Fayol’s Principles of Management Theory
In the early 1900s, big organizations, such as manufacturing plants, had to deal with critical management issues. Only a few management tools, models, and techniques were accessible at the time. Henri Fayol was among the first to lay the first bricks of contemporary scientific management. The foundational elements of effective management are these initial ideas, also referred to as management principles. Henri Fayol conducted a thorough investigation into this and came up with a summary of the 14 management principles. They included accountability, authority, work division, order, equity, stability in the length of an employee’s contract, initiative, esprit de corps, putting team interests ahead of personal ones, discipline, command cohesion, centralization, direction, and compensation. In the Asian Paints Company, the manager uses these principles in their day-to-day operations. They divide the work among the employees and make sure there is equity among the members of the company.
Scientific Management Theory
The first person to advocate scientific management, known as Taylorism, was Frederick W. Taylor. To boost productivity, he employed scientific techniques to analyze the most effective production process. According to Taylor’s scientific management concept, the optimal production framework ought to be implemented at the place of work to achieve maximum economic efficiency (Ridley-Duff and Bull, 2019). He came up with four principles: first, pick methods based on science rather than common sense. This is rational to use the scientific technique to find the best way to complete a task rather than allow each employee to follow their own strategy. Secondly, this is essential to give employees jobs that are a good fit for their abilities. Instead of assigning workers to open positions at random, managers should determine which employees are the most qualified for each specific job. Thirdly, monitoring worker performance helps make sure that employees assess their productivity and can count on additional training as required. Finally, distributing the workload between managers and employees equally contributes to minimizing the work burden and uniting the team.
Recommendations
One of the major misrepresented or misunderstood facts about Asian Paints is that the business is not making any profit gain. This has mostly affected the company in the sustainability of competitive advantage over other business rivals. The company is recommended to offer discounts to their customers to regain and maintain their trust again. Asian Paints also needs to talk to all its leading suppliers of their products across the countries to make sure there will be no more complaints about their products. As stated earlier, financial sustainability can be considered one of the main challenges that many organizations face when trying to deliver quality services and products.
It is recommended that both the local and federal governments should be able to implement policies and plans to provide the necessary support. According to the research, other business sectors are offered more privileged financial support. Social enterprises, in turn, face financial risks, and in some cases, they lack the required moral understanding and recognition of corporate social responsibility. With regard to the issue of customers complaining about the quality of service offered by the company, the Asian Paints administration should organize at least one meeting with all the staff to talk to them about the way they handle their customers. A new way of producing products may be offered, with a particular focus on how to produce their goods more effectively and how to gain their customers’ trust to ensure a sustainable demand and profit.
Conclusion
In summary, despite some remarks encountered during the interviews, the participants have left satisfied with the attempts to help the community develop. The misrepresentation of the social enterprises is another issue that has influenced the income generation of the companies, which, in turn, has resulted in the stagnant growth of the sector. The government has a vital role in creating and implementing better plans and policies that will promote the adaptation and growth of social enterprises in Asia. Through this, the Asian governments will also improve the entire economy’s sustainability by allowing the injection of more resources back into the community and/or social welfare.
For a social enterprise to carry out its day-to-day operations, it should have a stable financial record. This would help a company to carry out their operations smoothly. There would be no point where the business would want to stop running due to its financial issues. With regard to Asian Paints, the government should have lower tax rates on this company’s products so that the business could count on a good profit gain. On the issues like customer complaints, it was found that most of those clients complaining had bought their products from a particular store. The performed analysis has contributed to identifying the major directions to develop and the main activities to optimize to overcome the existing barriers and maintain competitive advantage.
Reference List
Backer, J. W. (2019) ‘Understanding social enterprise in the Netherlands’, Social Enterprise Journal, 16(1), pp. 18-45.
Bonini, S. et al. (2018) ‘Angel network affiliation and business angels’ investment practices’, Journal of Corporate Finance, 50, pp. 592-608.
Calvo MartÃnez, S. et al. (2019) ‘Solidarity economy, social enterprise, and innovation discourses: understanding hybrid forms in postcolonial Colombia’, Social Sciences, 8(7), p. 205.
Gizem, K., O. (2022) Enterprise agility: a practical guide to agile business management. Boca Raton: CRC Press.
Hosta, M. and Zabkar, V. (2021) ‘Antecedents of environmentally and socially responsible sustainable consumer behavior’, Journal of Business Ethics, 171(2), pp. 273-293.
Kruse, P., Wach, D. and Wegge, J. (2020) ‘What motivates social entrepreneurs? A meta-analysis on predictors of the intention to found a social enterprise’, Journal of Small Business Management, 59(3), pp. 477-508.
Ridley-Duff, R. and Bull, M. (2019) Understanding social enterprise: theory and practice. 3rd edn. London: Sage Publications.
Scarborough, N. M. and Cornwall, J. R. (2019) Essentials of entrepreneurship and small business management. 9th edn. New York: Pearson Education.
Shang, Y. (2020) ‘Research on the role of business administration in enterprise transformation’, Business Administration and Management, 2(2), pp. 36-39.
Sudari, S. et al. (2019) ‘Measuring the critical effect of marketing mix on customer loyalty through customer satisfaction in food and beverage products’, Management Science Letters, 9(9), pp. 1385-1396.
Wheelen, T. L. et al. (2018) Strategic management and business policy: globalization, innovation, and sustainability. 15th edn. New York: Pearson.
Yershova, O. (2018) ‘Information support for enterprise business process development management’, Management, 27(1), pp. 100-110.
Appendix
Table 1. Source of finance in percentage.
Table 2. PESTLE analysis in percentage.