CASE STUDY:-

Business Environment

Q.1. Examine the internal and external factors behind Reliance’s decision for the
swap deal. 
Ans.
Internal Factors:-

 For the availability of the petrochemical Naphtha for its Hazira facility
which was not produced by Reliance Industries.
 Another grade of naphtha provided for the international markets.
 Establishing better relationship with the Japanese players.

External Factors:-
 Relaxation of sales tax by 24%.
 Freight advantage against near competitor so to quote better prices.
 Entering into the large Japanese Market.
 Getting know-how about the latest technological up-gradation,
political, legal & cultural aspects.
 Getting international recognition.

Q.2. What environmental changes could make swap deal unattractive in future? 
Ans.2:-

 Abolition of sales tax benefit.

 Price change in the respective national markets.
 Gap of freight advantage get lessen.
 Un-stability in the political & legal environment of respective nations.
 Change in the competitive prices in the Japanese markets.
Q.3. Could there be any strategic reason behind the decision to import & export
naphtha.
Ans.3.

 Business expansion.
 Entry to the large international market
 Diversification of the business.
 Global customer base.
 Globalised operations.
 Access to the globalised man power.
 Getting the tax advantage over the local resources.