With the new challenges ahead, Reliance needs to modify its strategy and go into diversification in rich new markets opening up while maintaining the operating efficiency and the pride of place among the Indian investors.
Key Issues in the case
• Constituents of Success
• Diversification Strategy
• Management issues in family owned industries
History of Reliance Industries
1959 Dhirubhai Ambani sets up Reliance Commercial Corporation with a total capital of Rs... displayed 300 characters
Custom written essay
All essays are written from scratch by professional writers according to your instructions and delivered to your email on time. Prices start from $10.99/page
Your research paper is written by certified writers
Your requirements and targets are always met
You are able to control the progress of your writing assignment
You get a chance to become an excellent student!
Get a price guote
80 bn., Reliance becomes the only Indian entrant in Business Week’s listing of the 50 largest companies headquartered in developing nations
Pillars of success
? A forward looking vision that defied conventional wisdom
? Speed in decision making and project execution
? Top down approach to management that helped translate the visions into concrete workable goals
? Quantification of tasks followed by saturation of resources towards attaining that goal
? A management principle that believed in caring for its employees
? Management that actively pursued innovations in operations
? Financial dexterity – Reliance has always been a “zero tax” company
? Political clout of top management
Access to the capital markets in India
? Innovative methods adopted for accessing the markets for growth capital
? Company credited with numerous records and firsts in the Indian capital market
? Among the first company to access the capital markets through Partially Convertible Debentures (PCD)
? Dhirubhai hailed as a small investor’s stock market deity
? Responsible for creation of share investing culture at retail level in India
? One out of every 4 Indian investors is a Reliance shareholder
Porter’s Analysis
Customers
? Capacity utilization problems were resolved by pursuing exports as and when required
? Reliance actively followed a strategy of market creation by addressing latent demand & financial support to customers Threat of New Entrants
? Reliance built large scale world class facilities that demonstrated cost advantages
? Virtually impossible for smaller players to achieve the desired economies of scale and thus compete with the company
Suppliers & Substitutes
? The company avoided over dependence through a strategy of forward & backward integration
? Reliance pursued vertical as well as horizontal integration (ex-PTA) Rivals
? Reliance clearly emerged as the market leader; driving the market with its huge scale of operations
? Rivals lacked the desired competitive bargaining power
Present Scenario
? Economic reforms lowered the barriers of entry... displayed 300 characters
