The Golden Opportunity – Rahul’s Dilemma

Disclaimer:

This case study is prepared by Asian Paints (India) Limited exclusively for The SIES College of
Management Studies for Dr Nitin Vazirani

No part of this case study may be reproduced or transmitted for any other than teaching

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CASE STUDY

Background Information:

The Company:
Golden Paints Ltd is an Indian multinational engaged in the business of manufacturing and
selling paints in India and abroad. Since its inception in 1960, it has emerged as India’s largest
paint manufacturing company and enjoys the distinction of being the 8 th largest paint
manufacturing company in the world. A USD 700 million company employing 3000 employees
globally, Golden Paints enjoys the reputation of being a truly world-class organization.

The Product:
Paint as a product can be broadly put into three categories:

1. Decorative Paints: Sold through retail counters of Dealers and used for interior and
exterior decorative purposes for households, offices, hotels etc

2. Industrial Paints: Used for painting panels of consumer durables like washing
machines, refrigerators etc and for industrial machinery as anti-corrosive formulations.

3. Automotive Paints: Used in the automobile industry.

Competition:
Golden Paints has a market share in India of around 50% in the Decoratives segment with its
nearest competitor Silver Paints having a share of around 28%.

Restructuring:
In 1997-98 the company went in for a major re-structuring exercise to meet the challenges of
globalization in India. It was divided into two Strategic Business Units (SBU) i.e. Decoratives
Business Unit (DBU) focusing on manufacturing and selling decorative paints and a Growth
Business Unit focusing on selling Industrial Paints. The DBU set out a vision of increasing its
market share in India to 65% in order to consolidate its market leadership and to become the 5 th
largest Decoratives Paint manufacturing company in the world by 2007.

DBU Operations:
In India, the DBU’s operations network comprises of 5 state of the art manufacturing facilities, 6
Regional Distribution Centres (Warehouses), 76 sales units and 16,000 dealers spread across
the length and breadth of the country. It employs 1800 employees

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The Distribution Channel:
Products manufactured in the plants are sent to the six Regional Distribution Centres across
India, from where they are further distributed to the 76 sales units which are primarily
responsible for selling the same to Dealers who in turn sell it to the consumers. Hence the BU
business model requires an integrated effort on the part of all functions to meet requisite targets.

Sales and Marketing Function:

The S&M function is a crucial link for the BU to leverage on its vision statement. The Retail
Initiative of selling products to the consumers through a channel of Dealers was the backbone of
the network since its inception. However, it was felt at the time of re-structuring that mere
reliance on the retail network was not sufficient and that the company had to add a service
dimension to its business model. Hence in 1999 it launched India’s first painting service known
as Golden Home Décor. The idea was to remove the ‘pain’ from the painting process for
consumers and involve them with the product. By so doing the company was trying to directly
reach out to the end user and promoting brand Golden Paints. In order to cash in on the
construction boom in the country, a Golden Project Sales vertical was created to meet the
painting requirements of office complexes, shopping malls, hotels etc. Thus the three key
initiatives of Retail Sales, Home Décor and Project Sales were identified as growth engines of
the BU.

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Structure and the Human Resource Model for the three initiatives:

Golden Retail Sales:

The Initiative:
The Retail network is divided into 4 divisions i.e. North headquartered in Delhi, South at
Bangalore, East at Kolkatta and West in Mumbai.

The structure:
Each division is headed by a Divisional Sales Manager. The divisions are divided into regions
headed by Regional Sales Managers. A state or a combination of states depending upon their
geography and growth potential are clubbed together to form regions. The regions are further
divided into Sales Units headed by an Area Sales Manager. A typical sales unit would comprise
of metropolitan cities and upcountry areas and would achieve an annual sales turnover of
around 25-30 crores. Apart from the Area Sales Manager, it comprises of a team of Sales
Supervisors and frontline salesmen called Territory Sales In-charge.

The role of an Area Sales Manager:

The role of the Area Sales Manager is extremely crucial. He is the one who is responsible for
preparing the operating plans of his unit and motivating his team to achieve them. He is
responsible for managing his entire dealer network, understanding and analyzing market trends,
understanding competition and taking steps to counter, prepare short and long-term growth
plans to meet competition and other contingencies like economic stagnation, poor rainfall,
drought etc. He has to manage the expectations of his team and motivate them to achieve their
targets.

Golden Home Décor:

The initiative:
This helpline enabled painting service was initially launched in 5 cities of Mumbai, Delhi,
Kolkatta, Chennai and Secunderabad. The Home Décor model works on consumers calling the
helpline number and company representatives, along with authorized dealers and contractors
visit their homes, carry out a survey, sign a contract with a warranty period given by the
company and then execute the contract. The annual turnover of the business is around 20-25
crores, with an infinite growth potential.

The structure:
The Home Décor initiative is monitored by a Sr. Manager (Sales) who sits in Mumbai. There are
5 Area Managers (Home Décor) who report to the Sr. Manager (Sales) and are based out of
these five cities. The Area Manager has a team of Sales Supervisors (on the rolls of Golden
Paints) and third party salesmen (on contract) who are responsible for bringing in leads from the
field and carry out demand generation activities as well.

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The role of an Area Manager (Home Décor):
The role of an Area Manager (Home Décor) entails a larger effort on his part to not only manage
the expectations of consumers, but also ensure that all parties involved in executing the contract
work in a coordinated manner. All this has to be done in a virgin market where no similar
initiatives have been taken in the past and where consumer awareness is very low.

Golden Project Sales:

The initiative:
Aimed at cashing in on the construction boom in the country, Golden Project Sales was
launched in 7 cities in India in 1999 i.e. Mumbai, Delhi, Kolkatta, Chennai, Bangalore and
Hyderabad and Vizag.

The structure:
Like Home Décor, this initiative is monitored by a Sr. Manager (Project Sales) who sits in
Mumbai. There are seven Area Managers (Project Sales) who report to the Sr. Manager
(Project Sales). The Area Manager (Project Sales) has a team of Sales Supervisors and Project
Sales In-charge who report to him. The annual turnover of this business is around the 30-35
crores mark with an infinite growth potential keeping in mind the boom in the construction
industry.

The role of an Area Manager (Project Sales):

The Project Sales initiative has been identified by the BU to push through sales of the
company’s premium offerings in volumes and also emerge in the eyes of key influencers like
architects, interior designers etc. as a true service provider. Competition in this category is
intense and relationship building with key influencers like architects by the Area Manager is very
critical.

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The Situation:

The Eastern division headquartered at Kolkatta is known as the ‘baby’ amongst the four
divisions. It is headed by Rahul Joshi a dynamic Divisional Sales Manger who took charge of
the division in 2004. The division comprises of three regions i.e. Andhra Pradesh, West Bengal
and BONEJ (Bihar, Orrisa, North East and Jharkhand).

The incumbent Regional Sales Manager of Andhra Pradesh, Sudhir Kumar has resigned and
Rahul Joshi has to recommend one name from his division to the General Manager (All India
Sales) for this promotion. He has three candidates to choose from. Rahul has had a chance to
see them in operation for a year and has made an assessment on the basis of their
performance appraisal interviews conducted by him. In addition, an elaborate assessment has
been done by using the competency framework developed by HR. This, he felt would help him
to quantify their ‘Strengths and Improvement Areas’ more cogently. The competency framework
for the Area Manager position is as under.

Generic Competencies required for all three positions:

The scale has three levels i.e. High, Proficient and Expert.

Competency High Proficient Expert

Achievement
Orientation
Planning and
Analysis
Customer
Orientation
People
Management

Functional Competencies required for the Area Manager (Retail Sales) position:

The scale has five levels as given below

Competency Basic Working Operational Proficient Expert
Understanding Knowledge
Sales
Management
Brand
Management
Market
Understanding
and
Development
Commercial
Orientation

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Functional Competencies required for the Area Manager (Home Décor) position:
Competency Basic Working Operational Proficient Expert
Understanding Knowledge
Sales
Management
Brand
Management
Market
Understanding
and
Development
Commercial
Orientation

Functional Competencies required for the Area Manager (Project Sales) position:
Competency Basic Working Operational Proficient Expert
Understanding Knowledge
Sales
Management
Brand
Management
Market
Understanding
and
Development
Commercial
Orientation

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Details of Candidate 1:
Profile:
Arun Sharma is an Area Sales Manager (Retail Sales) handling the operations of the Cuttack
Sales unit in the Eastern Division. Arun joined Golden Paints as a front-line Territory Sales In-
charge in 1995. He has risen the ranks on account of his consistent performance and his
potential to shoulder higher level responsibilities. He was promoted as the unit head of Cuttack
in 2001 and has ensured that his unit has grown at the rate of 15% on value and volumes since
he took over. He has been in Retail Sales all throughout his career with the company.

Rahul’s assessment of Arun:

During his annual Performance Appraisal review in 2004-05 Arun was rated as Outstanding. He
has won five merit rewards in his career with the company. Commenting on his performance
Rahul wrote that “Arun’s leadership has enabled Golden Paints to assume a market share of
35% in Cuttack and thereby become the leader there for the first time ever.”

Strength areas:

 People Management: Arun is essentially a hands-on person. Having been with retail
sales all through out his career he understands the pulse of his team members and is
extremely sensitive to their needs. He is a great motivator of people and it is essentially
through them that he gets his work done. Competency Rating: Proficient (4/5)

 Sales Management: He also understands the dealer network and the dynamics that
play themselves out in a tough market place.
Competency Rating: Proficient (4/5)

 Brand Management: Able to understand the influencer segment in the market and use
them quite effectively to push through our brands. The segmenting and positioning work
done in Cuttack has been of a high order.
Competency Rating: Working knowledge (4/5)

 Achievement Orientation: Drives his team and self to exceed targets.

Competency Rating: Proficient (4/5)

Improvement areas:

 Market Understanding: He needs improvement in the area of having a strong business

perspective. He seldom came across as a person who had a vision and long-term plans
for the unit’s development. A strong long-term plan would ensure that the unit is able to
retain its leadership position in the face of strong competition. Competency Rating:
Working Knowledge (2.5/5)

 Planning and Analysis: Planning and putting in place elaborate systems in the unit that
will ensure that the unit is not heavily reliant on people alone to achieve its targets.
Competency Rating: High (2.5/5)

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  Customer Orientation: Could do better by focusing on end users as well apart from the
dealer network. An approach of this nature is essential in a low market share are like
Cuttack. Competency Rating: Proficient (3/5)

 Commercial Orientation: Could do better by reigning in unruly dealers on payment and

credit related issues, who flout company schemes openly on account of their strength in
the market, rather than pamper them most of the time. Tough decisions are required to
be made at times.
Competency Rating: Basic Knowledge (2/5)

Appraisal discussion with Rahul:

During his discussion with Rahul on his preferred career path, Arun mentioned that he was
happy wherever the company sent him. He was a ‘Golden loyalist’ and owed his entire career to
the company.

Overall:
Arun is a target oriented individual, rather than a thinker and a visionary. He has a friendly
personality, is a great team player and is aware of grassroots realities. He delivers on his
targets and is a good, stable, long-term bet for the company.

Details of Candidate 2:

Profile:
Pravin Srivastava is an Area Sales Manager (Home Décor) for Kolkatta city. An MBA from
premier B-School, Pravin joined Golden Paints in 2000 and after completing his initial training
was posted as the Area Manager for the Home Décor initiative in Kolkatta city in the same year.
It was a completely new venture and even Rahul did not have much of an idea on how to
proceed.

Rahul’s assessment:
Pravin was rated as Outstanding during the annual performance appraisal review for 2004-05.
While commenting on his performance, Rahul says, “Pravin is a thinker and visionary. He loves
to work in an unstructured environment and create something new from scratch. His efforts
have ensured that Golden has achieved a business of 50 crores in just two years of launching
the Home Décor initiative. Though by nature he is an introvert he has the trappings of a good
leader.”

Strength Areas:

 Market Understanding, Planning and Analysis: A very strong understanding of the

market, backed by a visionary long-term approach to planning. His analysis is rigorous
and is always backed by solid data.

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 Competency Rating: Operational (4/5)

 Brand Management: He has been instrumental in building up a very strong brand for
Home Décor in Kolkatta city; by ensuring that minimum service levels are met by all
parties involved i.e. his Sales Supervisors, third party salesmen, dealers and
contractors.
Competency Rating: Proficient (3/5)

 Achievement Orientation: Very high sense of target orientation and determined to

achieve the same. Competency Rating: Proficient (4/5)

 Sales Management and Commercial Orientation: Systemic monitoring of expenses,

schemes and overheads for the unit and contractors. Initiatives have been instrumental
in pushing through sales of our premium offerings.
Competency Rating: Working Knowledge (4/5)

Improvement Areas:

 Customer Orientation: Recalling his discussions with a few old contractors and dealers
of the company during a road show in Kolkatta city, Rahul notes that they felt Pravin was
unapproachable. Although they respected him for his knowledge, it was difficult for them
to relate to his ‘number oriented talk’. They would not approach him to solve their
problems and instead approached his supervisors.
Competency Rating: High (2.5/5)

 People Management: Pravin would rarely speak directly to his front-line salesmen and
supervisors. Being a strong believer in systems, he would delegate work and demand
results. Supervisors who reported to him frequently said that they were in awe of him.
Competency Rating: High (2.5/5)

Appraisal Discussion with Rahul:

Having spent about 4 and a half years in one assignment Pravin was looking for a change. He
wanted to shoulder higher level responsibilities and was expecting the company to ‘take care’ of
his needs. Rahul could not help but feel that Pravin was hinting at a possible quitting. However
he also felt that a talent like him should be given a good opportunity in the organization.

Overall:
A strong systems orientation, backed by a visionary long-term approach. However not a strong
team player, which could make an impact on the morale of his team members. Also Pravin
needs to have experience in the area of Retail Sales.

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Details of Candidate 3:

Profile:
Sharib Khan is an Area Manager (Project Sales) for Kolkatta city. A management graduate
from a non premier business school, Sharib joined Golden Paints as an Area Manager from
Silver Paints in 2001. He was with Silver Paints as a Project Sales Manager for Mumbai for a
period of two years. He has worked in Retail Sales with an FMCG major as front line salesman
for two years before joining his management course. Thus he had a fairly rich 8 years of total
experience. A smooth talking, dynamic professional, Sharib has ensured that Golden Paints
reached the 2nd position in Kolkatta city from the last position, two years ago with an annual
sales turnover of 55 crores. When Sharib joined Golden, he was confronted with a difficult
situation. The company was virtually non-existent in the Kolkata market in this segment. His
front-line salesmen (Project Sales Incharge) were threatening to go on strike on account of
dissatisfaction with service conditions. Hence, the turnaround in two years has been seen as
being dramatic.

Rahul’s assessment:
He was rated Outstanding by Rahul for the annual performance appraisal review for 2004-05.
Commenting on his performance Rahul notes that “Sharib has transformed the face of Project
Sales on account of his previous experience with Silver which is a market leader in Kolkatta.
Owing to his contacts and relationships with key architects and interior designers, which are so
vital for this business, Golden has managed to snatch a few key accounts from Silver in the last
two years.”

Strengths:

 Customer Orientation: Extremely strong and proactive. He understands his influencer

and consumer base completely. In fact he understands their needs even before they are
articulated and hence is seen as being proactive. He has built his network of influencers
primarily on account of his relationship.
Competency Rating: Expert (5/5)

 Market Understanding: His understanding of the market and its dynamics is

outstanding on account of his native intelligence and relationships.
Competency Rating: Proficient (4/5)

 Brand Management: Done good work in developing the Golden brand in this segment
with solid focus on customers and influencers through an outstanding ‘delivery’ based
approach.
Competency Rating: Operational (3/5)

 Achievement Orientation: Sharib knows his strengths i.e. his charm with his customers
and has capitalized on the same quite brilliantly. His achievement orientation has been
driven by his core strength areas.
Competency Rating: Proficient (4/5)

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Improvement Areas:

 Planning and Analysis: Though brilliant in reacting to any customer demands in the
short term, Sharib was not known for preparation of long-term contingency plans which
were needed on account of strong competition in this field.
Competency Rating: High (2.5/5)

 People Management: Though Sharib is very good with his customers he needs to
improve his relationship with his team. Rahul has received several reports of his high-
handed approach and lack of patience with his team members. Sharib was generally
seen as a ‘hard task master’.
Competency Rating: High (2.5/5)

 Commercial Orientation: Sharib had consistently exceeded his expense budgets.

Rahul felt that expense controlling, particularly on ‘managing key customers’ needs to be
controlled. These key customers need not be treated with kid gloves all the time.
Company policies particularly the credit policy needs to be effectively implemented.
Competency Rating: Basic Knowledge (2.5/5)

Appraisal discussion with Rahul:

Rahul found Sharib to be a person who capitalized on his strengths and understood his
limitations. Sharib had a track record of switching jobs and Rahul was apprehensive on that
count. However his potential and track record could not be denied.

Overall:
A shrewd, dynamic individual who is driven to achieve his targets based on his strengths. Also
Sharib had some exposure to Retail as well.

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What Rahul is looking for?

Rahul is looking for the following from the new incumbent:

The Role of Regional Sales Manager (Andhra Pradesh):

Requires the incumbent to manage Retail, Home Décor and Project Sales in the state of Andhra
Pradesh. He will lead a team comprising of 3 Retail Sales Manager, 1 Manager (Home Décor)
and 1 Manager (Project Sales). He will be in charge of a region where the Retail initiative has
stagnated over the last two years and the Home Décor and Project Sales initiatives are still in
their infancy. Silver Paints is fairly strong and is mounting an effective challenge to Golden
Paints in all three areas. The general economic outlook for the state of Andhra Pradesh is bleak
with a persistent drought for the third year in succession crippling demand in some key
upcountry markets like Vijaywada, Tirupati and Telangana.

Key deliverables:

 Retail: He will be responsible for ensuring that Golden remains the market leader in
Retail (current market share of 48% as compared to Silver’s 30%). This market is almost
Rs 200 crores. ,
 Home Décor: Achieve a sales turnover of 40 crores in Home Décor for Secunderabad
city (current turnover is 10 crores)
 Project Sales: Achieve the number 1 position in Project Sales in Hyderabad and Vizag
with a turnover of 80 crores (current position is no 2 with a turnover of 50 crores). The
time period for delivering on these goals is 2 years.

To assist him in his assessment the HR department has sent Rahul this summary chart for
Generic and Functional competencies required for the position of Regional Sales Manager.

Generic Competencies:

 Achievement Orientation: Maximizes contribution of his subordinates by taking

complete responsibility/ownership for results and works to improve their efficiency.

 Planning and Analysis: Ability to perform complex analysis and longer term
contingency plans for self and work group.

 Customer Orientation: Drives functional processes to exceed customer requirements.

 People Management: Inspire and motivate his team to achieve the set targets.

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Functional Competencies:

 Sales Management: Estimate sales trends within the company and with competitors.
Conducting sales studies and developing short term models for forecasting prices,
trends etc.
 Brand Management: Possesses knowledge of the branding processes in other
companies. Handles exceptions/complicated issues related to the product/process.
 Market Understanding and Development: Possesses detailed knowledge of each
market segment, logic/positioning of each segment and is able to interpret consumer
research findings for brands.
 Commercial Orientation: Possesses knowledge of cost/overheads of the Sales
unit/products and focuses on the productivity of working capital.

Generic Competency chart for Regional Sales Manager (Andhra Pradesh):

Competency High Proficient Expert

Achievement
Orientation
Planning and
Analysis
Customer
Orientation
People
Management

Functional Competencies chart for a Regional Sales Manager

Competency Basic Working Operational Proficient Expert
Understanding Knowledge
Sales
Management
Brand
Management
Market
Understanding
and
Development
Commercial
Orientation

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Rahul’s dilemma:

Rahul has to choose between the loyal doer Arun, the sharp thinker Pravin and the smooth
communicator Sharib. He had been thinking long and hard on his situation. He had objective
competency based assessment on one hand while he also had his own subjective judgment
about each individual. Over a period of time he had started relying on past performance as one
of the indicators of the future performance, but he was not sure whether he will be able to use
the same thumb rule in the present situation: after all the requirements of the job at the Regional
Manager level was different from those at the Area Manager level. In fact the definitions for
some of the competencies may also need to change to reflect that and he was also wondering if
he could give similar weight to all competencies! He felt that he was better off focusing on few
critical ones instead of the entire set.

He has already spent a month thinking about his recommendation. He was of the opinion that
he was getting nowhere. He has to respond to his superior in two days time.

Questions:

 What model or framework would you recommend for the organization in such a case?

 What kind of process would you recommend for the organisation?

 What should Rahul do and why?

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