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    Reliance Industries Private LTD

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    Sumeetp
    Reliance Industries is India's largest private sector company founded in 1932. It has diversified across various industries including oil and gas, petrochemicals, telecommunications, natural resources, retail, and media. The company pursues a strategy of vertical integration across its business portfolio. Some key points: 1. Reliance started in textiles and pursued backward integration into petrochemicals and petroleum refining to control its supply chain. 2. It has established core competencies in implementing complex projects and attracting top talent. 3. Reliance's recent acquisition of Network 18 strengthened its media business and will support the launch of its telecom services. 4. The company

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    Reliance Industries Private LTD

    Uploaded by

    Sumeetp
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    Reliance Industries is India's largest private sector company founded in 1932. It has diversified across various industries including oil and gas, petrochemicals, telecommunications, natural resources, retail, and media. The company pursues a strategy of vertical integration across its business portfolio. Some key points: 1. Reliance started in textiles and pursued backward integration into petrochemicals and petroleum refining to control its supply chain. 2. It has established core competencies in implementing complex projects and attracting top talent. 3. Reliance's recent acquisition of Network 18 strengthened its media business and will support the launch of its telecom services. 4. The company

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    Reliance Industries is India's largest private sector company founded in 1932. It has diversified across various industries including oil and gas, petrochemicals, telecommunications, natural resources, retail, and media. The company pursues a strategy of vertical integration across its business portfolio. Some key points: 1. Reliance started in textiles and pursued backward integration into petrochemicals and petroleum refining to control its supply chain. 2. It has established core competencies in implementing complex projects and attracting top talent. 3. Reliance's recent acquisition of Network 18 strengthened its media business and will support the launch of its telecom services. 4. The company

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    Download as pptx, pdf, or txt
    30 views26 pages

    Reliance Industries Private LTD

    Uploaded by

    Sumeetp
    Reliance Industries is India's largest private sector company founded in 1932. It has diversified across various industries including oil and gas, petrochemicals, telecommunications, natural resources, retail, and media. The company pursues a strategy of vertical integration across its business portfolio. Some key points: 1. Reliance started in textiles and pursued backward integration into petrochemicals and petroleum refining to control its supply chain. 2. It has established core competencies in implementing complex projects and attracting top talent. 3. Reliance's recent acquisition of Network 18 strengthened its media business and will support the launch of its telecom services. 4. The company

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    of 26

    Adan Fatih PG Ops

    Md. Asif PG Ops


    Anoop Janardanan PG Ops 129
    Swapnil Joshi PG Ops 130

    RELIANCE INDUSTRIES
    PRIVATE LTD.

    Company Profile

    Founded by Mr. Dhirubhai Ambani in 1932


    Currently Indias largest Private Sector Enterprise
    Annual revenues exceed $66 Billion
    Ranked 99 on Fortune Global 500 list as of 2013.
    2nd largest publicly traded company in India by
    market capitalization
    Contributes to 14 % of Indias total exports
    Largest polyester yarn and fibre producer in the
    world

    Business Portfolio
    Type 1

    Type 2

    Oil and Gas


    Exploration and
    Production
    Petroleum refining
    and marketing
    Petrochemicals

    Reliance
    Communications
    Reliance Power
    Reliance Retail
    Reliance
    Infrastructure

    RIL Vision, Mission & Values


    Vision: To create economic value for
    stakeholders by offering competitive
    goods and services in the energy value
    chain and new economy domains
    Mission: Create value for all stakeholders,
    grow through innovation, ensure energy
    security of the nation, foster rural
    prosperity
    Values: Care Citizenship Fairness
    Honesty Integrity Purposefulness
    Respect Responsibility Safety
    Truth.

    Core competencies:
    Ability to conceptualize and implement
    complex, multi-billion dollar projects
    Largest in-house pool of intellectual
    capital
    Unique financial engineering capabilities
    Attracting and retaining the best
    people, and nurturing the
    entrepreneurial spirit
    Absorption of diverse and complex
    technologies and optimal operation of
    plants

    Differentiation Strategy
    Market reputation and customer
    relationships are key long term advantages
    Strategy is built around:
    World class quality of products
    Widest range of product grades
    Reliability of supplies at competitive prices
    Extensive nation-wide distribution network
    Technology and product development
    support

    Reliance Backward Vertical Integration


    1 Trading in textiles and yarn
    2 Manufacturing textiles
    3 Manufacturing polyester yarn and fibre
    4 Petrochemical manufacturing
    5 Petroleum refining and retailing
    6 Oil and gas exploration

    Why vertical integration?


    Started with textile trading which became a
    thriving business and gave highest sales
    Great potential of textile industry lured Reliance
    into textile manufacturing
    Problems on the distribution side led Reliance
    into retail business
    Market potential coupled with political influence
    enabled Reliance enter petrochemical industry
    Near collapse of Indian oil industry in 1997 gave
    Reliance opportunity to enter petroleum refining
    The drive to control enter energy supply-chain
    pushed Reliance more behind into oil & gas
    exploration and production

    Most recent acquistion


    Acquired Network 18-one of the
    biggest media houses in the country
    Rs 40 billion in May 2014
    Enables RIL to control web content
    via , IBNlive.com, Moneycontrol.com,
    Firstpost.com, Cricketnext,
    Homeshop18, bookmyshow.com
    Enables RIL to control TV content via
    channels such as Colors, CNBC TV18,
    CNN-IBN, IBN7 and CNBC Awaaz

    Reasons for acquisition

    Reliance Jio Infocomms impending roll out of


    4G services will be assisted by Network 18s
    huge content in
    Broadcast
    Digital
    E-commerce
    Help differentiate Reliances 4G services by
    providing a unique amalgamation at the
    intersection of telecom, web and digital
    commerce via a suite of premier digital
    properties
    Complete control over one of the largest
    media companies in the country, with a
    presence across television, print and digital,
    helps to put across ones point of view
    Capture Audience Attention

    3-test approach to diversification


    Attractiveness test(Industry must be
    structurally attractive or capable of
    being made attractive)
    License-permit Raj created anomalous
    duty structures
    States levied high duties on inputs at
    every stage of production
    Reduce the impact of cascading duties
    by integrating vertically
    Absence of competition spurred Reliance
    into backward vertical integration.

    3-test approach to diversification(Contd.)


    Cost of Entry Test(The cost of entry
    must not capitalize all future profits)
    Absence of competition encouraged
    Reliance that its profits would not be
    offset
    Vast capacities dictated the need to
    control the entire supply chain from
    one end to the other to offset the
    possibility of shortage of supplies of
    raw materials at any stage for
    Reliance

    3-test approach to diversification(Contd.)


    Better Off Test (Either the new unit must gain
    competitive advantage from its link with the corporation
    or vice-versa)
    Created bigger and bigger agglomerations of businesses
    in order to build size and scale in an India protected by
    tariff walls
    size enabled him to raise more and more capital, both
    from lenders and the equity markets
    capital enabled him to create global-scale capacities at
    lower cost than his competitors despite high import tariffs
    on capital goods, plant and machinery.
    ensured high share prices by two ruses: creating
    companies and then merging them into Reliance; and by
    ensuring his share prices remained high by constantly
    feeding his investor base with the prospect of higher
    returns.

    BCG Matrix for Reliance Industries Portfolio

    -PETROLEUM REFINING &


    MARKETING
    -OIL AND GAS EXPLORATION &
    PRODUCTION
    -RELIANCE POWER
    -RELIANCE
    PETROCHEMICALS
    - RELIANCE
    COMMUNICATIONS

    -RELIANCE RETAIL
    -RELIANCE CAPITAL
    -RELIANCE INFRASTRUCTURE

    -VIMAL

    GE-Mckinsey Matrix for RIL

    -PETROLEUM
    REFINING AND
    MARKETING
    -OIL AND GAS
    EXPLORATION

    -RELIANCE RETAIL
    - RELIANCE
    CAPITAL
    -RELIANCE
    INFRASTRUCTURE

    -RELIANCE
    POWER
    -RELIANCE
    INFRASTRUCTU
    RE

    Vertical Integration at a glance

    Vertical Integration at Reliance


    A great example of vertical integration in
    modern business
    Reliance's backward integration into
    polyester fibre from textiles and further
    into petrochemicals was started by
    Dhirubhai Ambani.
    Reliance now has a complete vertical
    product portfolio from oil and gas
    production,
    refining,
    petrochemicals,
    synthetic garments and retail outlets- - to
    be fully integrated along the materials
    and energy value chain.

    Vertical Integration Advantages

    Reduce transportation
    ownership results in
    proximity.

    Improved supply chain coordination.

    Provided more opportunities to differentiate


    by means of increased control over inputs.

    Capture upstream profit margins.

    Increase
    entry
    barriers
    to
    potential
    competitors, for example, Reliance has
    gained sole access to a scarce resource i.e.
    oil fields.

    costs if common
    closer geographic

    Vertical Integration Disadvantages


    Capacity balancing issues. For example,
    Reliance needed to build excess upstream
    capacity to ensure that its downstream
    operations have sufficient supply under all
    demand conditions.
    Higher costs due to low efficiencies
    resulting from lack of supplier competition.
    Developing new core competencies has
    compromised existing competencies.

    Acquisition vs Organic Growth


    Benefits of acquisition by Reliance in this
    case
    Existing product or service
    Existing customer base
    Existing operation, revenue,
    employees
    Existing market recognition
    Existing culture
    Knowledge of a completely new field
    Suits the future interests of RIL
    indirectly

    CSR at Reliance
    Health
    At its various project sites , Reliance
    industriessites runs medical facility
    center, physiotherapy center, and mobile
    medical vans that dispenses free
    medicines and provide free health checkups. Also periodically company come up
    with health camps like general health
    check up camps, gynaecology camps,
    eye check up camps andcorrective
    surgery camps for disabled children

    CSR at Reliance
    Drishti
    Project Drishti, a nation-wide
    grafting drive to bring light into
    the lives of visually challenged
    from the underprivileged segment
    of society, has restored the gift of
    sight to over 5,500 Indians. A
    unique joint initiative of Reliance
    Industries Limited and National
    Association of Blind (NAB), Project
    Drishti has undertaken over 5,500
    keroptoplasty surgeries in less
    than 4 years since it was started all free of cost. It is now the
    largest corneal grafting surgery
    project enabled by a single
    corporate entity in India.

    CSR at Reliance
    Environment
    Reliance further integrated its safety
    and environment performance in the
    overall business plan and strategy. A
    management
    system
    approach,
    consisting of gap analysis, planning,
    implementation,
    and
    review
    has
    percolated to all business plans through
    ISO 14001:2004 at all manufacturing
    locations.
    Through its annual environment plan
    and business targets, the Company
    identifies projects and takes action to
    achieve these targets with the ultimate
    goal of becoming water positive, carbon
    neutral, with maximum possible recycling
    and reuse of hazardous and other wastes.

    CSR at Reliance
    Reliance Kargil
    Scholarship Scheme

    The Scheme to support educational


    needs of the children of defence
    personnel who sacrificed their lives
    or were disabled during Kargil war,
    instituted with the generous
    contribution from Reliance
    employees. During the year 87
    children received financial support
    for their education from standard IV
    to XII under the scheme.

    CSR at Reliance
    Dhirubhai Ambani Hospital , Lodhivali
    Reliance also operates the Dhirubhai Ambani Hospital, Lodhivali and
    renders quality medical services to the rural population and highway
    accident victims

    Mobile Dispensaries
    Reliance also operates free medical diagnostic and therapeutic
    services at neighboring villages of several of its manufacturing
    locations.

    Blood Donation Drives


    The Companys employees organize and participate in blood
    donation campaigns every year across its manufacturing
    divisions and offices.

    Sports for the physically challenged


    Reliance has joined hands with the organizing team of Special
    Olympics Gujarat (Bharat) for the physically challenged
    children of Gujarat. Several hundred children participated in
    the events that were organized at the Reliance Sports
    Complex, at Vadodara.

    THANK YOU !!

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