Reliance Jio

Business Analysis
Strategic Management | XLRI

SUBMITTED BY:

Group 12 | Section B

Brahmendra B17076
Chandrapati B17080
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Gaurav Karmarkar B17084
Karneek Patel B17117
Tanuj Kukreti B17121
Table of Contents
1. Introduction – Reliance JIO ................................................................................................................... 3
1.1. History ........................................................................................................................................... 3
1.2. Growth and expansion .................................................................................................................. 3
1.3. Competitors .................................................................................................................................. 3
1.4. Financials ....................................................................................................................................... 3
2. Business Strategy .................................................................................................................................. 3
2.1. Competitive Strategy .................................................................................................................... 3
2.2. Industry Positioning ...................................................................................................................... 3
3. Resources and Capabilities Analysis (VRIN) .......................................................................................... 3
3.1. Resources ...................................................................................................................................... 3
3.2. Capabilities .................................................................................................................................... 3
4. Firm Level Analysis ................................................................................................................................ 3
5. Key Issues and Recommendation ......................................................................................................... 3

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1. Introduction – Reliance JIO
1.1. History
1.2. Growth and expansion
1.3. Competitors
1.4. Financials

2. Business Strategy
2.1. Competitive Strategy
2.2. Industry Positioning

3. Resources and Capabilities Analysis (VRIN)

3.1. Resources
3.2. Capabilities

4. Firm Level Analysis

5. Key Issues and Recommendation

Key issues:

Right now, Jio and its rival companies have a relatively peaceful existence in the 4G handsets, and this
is because majority of handsets have two sim slots, which enables the users to keep both the sims of
Jio as well as the rival companies. However, this will only be possible if Jio keeps its tariff low as is the
case now. The reason behind this is that Jio has not yet become the primary number for most its users.
Also the customers will be unwilling to change their primary number to Jio because their primary sim
card carriers have also brought down their tariffs to match Jio and are continuously enhancing and
expanding their 4G infrastructure.

Also, the possibility further increment in revenue by slashing the prices further is very narrow, because
already almost all the LTE subscribers are being served by the existing telecom companies at almost
the same tariff level.

Hence, this indicates that price increase is clearly not an option for Jio right now. Also, this would
mean that tariffs will remain competitive hurting the profitability of the industry overall. If this would
continue, there is a possibility there more and more consolidation will happen, which can lead to
introduction of several regulations from government authorities to protect the industry. Jio will have
to lookout as to how it can prevent this from happening alongside increasing its revenues.

Another front at which Jio is hoping to recoup its investment is through its app ecosystem. Its app
ecosystems include everything from JioCinema, Jio Music, JioTV, Jio Magazine to Jio Newspaper. Users
can access this application ecosystem from a Jio connection only, for free for the time being, making

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it a closed app ecosystem. However, according to Reliance, in future, Jio would charge a fee to users
for accessing this app ecosystem in an attempt to recover its investment.

However, as evident from history, from the case of failure of AOL, which was operating a similar closed
app ecosystem, it is quite possible that the Jio app ecosystem will meet the same failure. History
suggests that customers prefer an open app ecosystem with better third party application rather than
a closed app ecosystem.

Also one other issue that is facing Jio is the problem of customer loyalty. Right now, all of its
application services are free and it is giving a lot of cashback schemes for recharges through its apps.
However, Indian customers are not known for having a strong brand loyalty and it is a task in front of
Jio to retain the customers once they start to charge for their applications.

Jio is offering its services on 4G platform only. Although the number of 4G devices are increasing, its
penetration rate is still as low as 1.6%. This severely limits the scale at which Jio can operate and the
extent up to which it can utilize the capacity of the 4G infrastructure it has invested in. Hence, Jio will
have to look out for as to how it can penetrate the market and increase its subscriber base particularly
in rural areas with the help of its Jio Phone that it launched, which is primarily launched as a cheap
alternative to expensive smartphones for using its VoLTE calling services.

Recommendations:

Increase the penetration rate of Jio’s 4G devices:

With the Indian smartphone market in the urban area has got saturated in terms of smartphone users,
it will severely limit the capability of Jio to expand its 4G services and efficiently utilize its huge
infrastructure that it has built. So, the only option for Jio is to make efforts in increasing the number
of smartphone users in rural areas. Jio will have to start making people in rural areas switch from
feature phones to smartphones so as to increase the potential market for its 4G services. Jio can do
this by properly marketing its value for money LYF brand of smartphones as well as its 1500 INR Jio
4G phone as rural users will like to own a smartphone with all the essential smartphone features at a
lower price point. If Jio is able to market these smartphones well in rural areas, Jio can also capture a
large market share in rural areas by bundling their 4G services with their 4G smartphones.

App ecosystems:

Rather than going for a paid closed app ecosystem, Jio should focus on pursuing a strategy of a paid
open app ecosystem which will also be competitively priced which will be in the same line of the
strategy of Jio keeping low tariffs for its data plans. It should focus on improving its applications and
usability as well its compatibility on various fronts so as to attract not only Jio customers, but also non
Jio customers which will bring in additional revenue.

Entertainment content:

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 In an order to succeed in the online entertainment applications, Jio should follow the strategy of its
rivals in this category such as Amazon, Netflix and Hotstar, i.e. to start developing original content,
through partnership with Indian content makers, production houses, directors etc. This content will
be exclusively available on Jio applications thus adding a differentiating factors for its entertainment
applications.

Integrating offline and online:

Reliance Jio’s parent company, Reliance Industries Limited already has an extensive network of large
retail stores established all across the country. This retail stores provide are operating in categories
like grocery stores, apparel stores, jewelry stores, watch stores, supermarkets etc. thus serving a wide
array of customers. Attempts should be made to leverage the online capabilities of Jio and the offline
capabilities of Reliance Industries Limited to establishing a sync between both of these companies.
Both of these companies should sync their competencies to increase revenues for both Reliance
Industries Limited and Jio by banking upon the retail sales of the parent company.

Focusing on corporates:

Jio has already launched its broadband services on a trial basis for households. In addition to this, Jio
should focus on attacking one of the profit sanctuaries of its rival companies, i.e. to start providing
broadband internet services to corporates. This is highly feasible for the company as the company has
already laying down its fiber optic cables all over the country. It can make use of this fiber optic cables
to start providing services to corporates as well. And this will be particularly attractive for corporates
since the technology and infrastructure of Jio for providing this internet services is superior than the
present technology of the rival companies, which means that the corporate will be having a superior
access to internet.

6. Implementation

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