STRATEGIC

ANALYSIS OF
RELIANCE
INDUSTRIES LTD.

GUIDE
jvh – Dr. NEERAJ
SINGHAL

By GROUP A4 -
 STRATEGY

CONTENTS

Organization
Introduction…………………………………….. 3-4

Vision and Mission of Reliance Industries Ltd

and Component of Vision &
Mission………………..…………..5-7

External Environment
Analysis………………………………8-9

Porter's Five Forces Analysis……………..

………………10-11

Internal Environment
Analysis…………………………………12

Value Chain Analysis………………………..

……………….13-15

Strategies Identified in Reliance Industries

Ltd…..16-17

PAGE 2
 STRATEGY

Strategy Analysis…………………..
…………………………..18-21

Conclusion…………………………….
………………………………22

ORGANIZATION INTRODUCTION

Reliance Industries Limited (RIL) is an Indian Multinational Conglomerate Company

headquartered in Mumbai, Maharashtra, India. Reliance owns businesses across India engaged in
energy, petrochemicals, textiles, natural resources, retail, and telecommunications. Reliance is
one of the most profitable companies in India, the largest Publicly Traded Company in India by
Market Capitalization, and the largest company in India as measured by revenue after recently
surpassing the government-controlled Indian Oil Corporation. On 10 September 2020, Reliance
Industries became the first Indian company to cross $200 billion in market capitalization.

The company is ranked 96th on the Fortune Global 500 list of the world's biggest corporations as
of 2020. It is ranked 8th among the Top 250 Global Energy Companies by Platts as of 2016.
Reliance continues to be India's largest exporter, accounting for 8% of India's total merchandise
exports with a value of ₹1,47,755 crore and access to markets in 108 countries. Reliance is
responsible for almost 5% of the government of India's total revenues from customs and excise
duty. It is also the highest income tax payer in the private sector in India.

PAGE 3
 STRATEGY

The company was co-founded by Dhirubhai Ambani and Champaklal Damani in 1960's as
Reliance Commercial Corporation. In 1965, the partnership ended and Dhirubhai continued the
polyester business of the firm. Dhirubhai Ambani (28 December 1932 – 6 July 2002) epitomized
the

dauntless entrepreneurial spirit of a visionary always on the march to change the destiny of a
nation. Acclaimed as the top businessman of the 20th century and lauded for his dynamic,
pioneering and innovative genius, Dhirubhai was an inspiring leader with sterling qualities. He
visualized the growth of Reliance as an integral part of his grand vision for India. He was
convinced that India could become an economic superpower within a short period of time and
wanted Reliance to play an important role in realizing this goal. Today, the Group's turnover
represents nearly 3 percent of India's GDP.

PAGE 4
 STRATEGY
The motto “Growth is Life” aptly captures the ever-evolving spirit of Reliance. They have
evolved from being a textiles and polyester company to an integrated player across energy,
materials, retail, entertainment and digital services. In each of these areas, they are committed to
innovation-led, exponential growth.

Their vision has pushed them to achieve global leadership in many of their businesses. Reliance's
products and services portfolio touches almost all Indians on a daily basis, across economic and
social spectrums. They are now focused on building platforms that will herald the Fourth
Industrial Revolution and will create opportunities and avenues for India and all its citizens to
realize their true potential.

Highlights of Financial Year 2019 - 20

PAGE 5
 STRATEGY

VISION AND MISSION OF RELIANCE

INDUSTRIES LTD.

VISION
A vision captures an organization’s aspiration and spells out what it ultimately wants to
accomplish. An effective vision pervades the organization with a sense of winning and motivates
employees at all levels to aim for the same target, while leaving room for individual and team
contributions. It spells out about what an organization ultimately wants to accomplish; it captures
the company’s aspiration.

Reliance Industries has the following vision –

“Through sustainable measures, create value for the nation, enhance quality of life across
the entire socio-economic spectrum and help spearhead India as a global leader in the
domains where we operate”

The vision statement for Reliance Industries is its strategic plan for the future – it defines what
and where Reliance Industries Company wants to be in the future. The vision statement for
Reliance Industries is a document identifying the goals of Reliance Industries to facilitate its
strategic, managerial, as well as general decision-making processes.

Components of the vision statement –

 Concise

The vision statement of Reliance Industries is brief and to the point. This means that the
company has not used long dialects and dialogues to delivers its opinion ad stance to the public
and relevant stakeholders. The vision statement should be brief and comprehensive – it should
communicate the essence of the business, and its future plans to help the stakeholders understand
its business philosophy and business strategy.

 Encompassing description

The vision statement of Reliance Industries should be brief but should be holistic in nature. This
means that the visions statement should be complete in its description and information of what
the company desires, and how it plans to achieve its long-term goals strategically. The vision
statement should be a comprehensive statement identifying the company’s core strengths, which
would enable it to achieve its futuristic goals.

PAGE 6
 STRATEGY

MISSION
Building on the vision, organizations establish a mission, which describes what an organization
actually does—that is, the products and services it plans to provide, and the markets in which it
will compete. People sometimes use the terms vision and mission interchangeably, but in the
strategy process they differ. Mission is a description of what an organization actually does—the
products and services it plans to provide, and the markets in which it will compete.

Reliance Industries has the following mission -

o Create value for all stakeholders

o Grow through innovation
o Lead in good governance practices
o Use sustainability to drive product development and enhance operational efficiencies
o Ensure energy security of the nation
o Foster rural prosperity

The mission statement for Reliance Industries is a public document that details the values and
strategic aims of Reliance Industries. The mission statement of Reliance Industries also identifies
the purpose of the organization existence, highlighting the services and the products it offers.
Further, the mission statement also identifies the organization’s operational goals for Reliance
Industries, the processes the company uses to achieve those, the target customer groups, and the
region where the company operates.

Components of a mission statement

 Customer satisfaction
The mission statement of Reliance Industries focuses on addressing issues of customer
satisfaction. The mission statement of Reliance Industries has identified its target customer
groups, and also identified their needs and demands. The mission statement reflects on how its
products and services work towards increasing customer satisfaction for its target customers.

 Based on core competencies

The mission statement of Reliance Industries is based on its integral strengths and competencies.
This is important for Reliance Industries as the mission statement will highlight the different
systems and processes as well as strategic tactics that the company uses to achieve its
organizational and strategic goals. The achievement of the goals will depend on how well
Reliance Industries makes use of its core competencies.

 Realistic and clear

The mission statement for Reliance Industries is also realistic and clear. This means that Reliance
Industries has used simple, string, and easily understood words and phrases in the drafting of its
mission statement. Clarity is important so that the mission statement is understood by all relevant
stakeholders of Reliance Industries Company. Reliance Industries’s mission statement is also
realistic, which makes it able to achieve various set goals and targets.

PAGE 7
 STRATEGY

 Motivational and inspirational

The mission statement of Reliance Industries is motivational in that it works towards inspiring
the employees and the workforce towards giving their optimal best performance towards the goal
achievement of Reliance Industries. The mission statement of Reliance Industries is also
inspirational in that it develops the need for growth and progress in individuals – for the
betterment of not only the company but also for their own selves.

 Specific and sharp

The mission statement of Reliance Industries is precise and to the point. It is easy to understand
and delivers what the audience must know about Reliance Industries’s offerings and operations.
It is important to keep the mission statement short, sharp and precise to be able to successfully
communicate the company’s standing to stakeholders, instead of dragging it on into long pages
with repetition and non-important aspects.

 Reflects the company’s offerings

The mission statement of a company should be based on what the company has to offer in terms
of products and services. This means that the mission statement for Reliance Industries
highlights its offerings, but ensures that this offering is in line with the values that the company
stands for. The mission statement for Reliance Industries, therefore, identifies the ethical grounds
through which the company systematically works to deliver its offering.

EXTERNAL ENVIRONMENT ANALYSIS

A. Opportunities for Reliance industries limited

 E- commerce and Digital space
 CMB as unconventional natural gas
 New strategic merger and acquisitions.
 Diversification from core energy business
 Infrastructure development in domestic and off shore operational units
 Expansion in untapped rural market

B. Threats to Reliance industries limited

 Intense competition
 Imitation of counterfeit and low-quality product in emerging markets
 Shifting sentiment towards electric vehicle
 Litigation may impact business expansion

C. External Factor Evaluation Matrix (EFE):

External Factor Evaluation (EFE) Matrix is a strategic analysis tool used to evaluate a firm’s
external environment and to reveal its strengths as well as weaknesses. This tool helps
evaluate external environment or macro environment of the firm include economic, social,
PAGE 8
 STRATEGY
technological, government, political, legal and competitive information. In case of Reliance
Industries Ltd., we have analyzed the opportunity and threats and will now prepare the matrix
to establish which factor impacts the airlines the most. The ratings in external matrix refer to
how effectively company’s current strategy responds to the opportunities and threats. The
numbers range from 4 to 1, where 4 means a superior response, 3 – above average response,
2 – average response and 1 – poor response. Ratings, as well as weights, are assigned
subjectively to each factor.

Interpretation of the Matrix Prepared

Reliance Industries has been able to look on to the upcoming opportunities and is placed perfect
to leverage upon the opportunities. E commerce and digital space is an area where it has great
future. creating strategic merger and acquisitions can bring up future glory the group. RIL has
been able to counter it competition pretty well over the years. the major threat which evolves
around the corner is of electric vehicles. electric vehicle can be a disrupter for it Petro business.
Looking at the total score of the external factor evaluation matrix 3.04. we can say that RIL is
placed pretty well to capitalize on opportunities eliminating almost all its weakness.

D. Competitor Profile Matrix (CPM):

The key competition that Reliance Industries Ltd. have faced over a decade has been
from Tata Group, Adani Group, Aditya Birla Group and Mahindra Group. The
Competitive Profile Matrix (CPM) is a tool that compares the firm and its rivals and
reveals their relative strengths and weaknesses. The matrix identifies a firm’s key
competitors and compares them using industry’s critical success factors [Critical success
factors (CSF) are the key areas that determine a company’s success in the industry. To
succeed in its industry, a company must perform at the highest possible level of
excellence]. The analysis also reveals company’s relative strengths and weaknesses
against its competitors, so a company would know, which areas it should improve and,
which areas to protect. They vary between different industries or even strategic groups
and include both internal and external factors. It is very much similar to the process of
benchmarking. The ratings in CPM refer to how well companies are doing in each area.
They range from 4 to 1, where 4 means a major strength, 3 – minor strength, 2 – minor
weakness and 1 – major weakness. Ratings, as well as weights, are to be assigned
subjectively to each company

Interpretation of the Matrix Prepared

The matrix gives us clear indication that RIL has been one of the major conglomerates in the
Indian market, all though all other big players are neck to neck and has great potential going
ahead. The results are totally subjective to individual perception and may vary from person to
person. According to the given matrix RIL manages these critical success factors most effectively
followed by tata group, Aditya Birla group,

PAGE 9
 STRATEGY

PORTER'S FIVE FORCES ANALYSIS

Porter's Five Forces is a simple but powerful tool for understanding the competitiveness of your
business environment, and for identifying your strategy's potential profitability. This is useful,
because, when you understand the forces in your environment or industry that can affect your
profitability, you'll be able to adjust your strategy accordingly. For example, you could take fair
advantage of a strong position or improve a weak one, and avoid taking wrong steps in future.
Porter recognized that organizations likely keep a close watch on their rivals, but he encouraged
them to look beyond the actions of their competitors and examine what other factors could
impact the business environment. He identified five forces that make up the competitive
environment, and which can erode your profitability.

Porter’s 5 forces analysis of Reliance Industries

–

A. Bargaining Power of Buyers

The bargaining power of buyers in case of
reliance industries is moderate on aggregate
level, but it’s different in individual basis.
For example, bargaining power of buyer is
high in telecommunication industry of
reliance, because of multiple options
available, and so in the textile industry.
However, on the aggregate level it is gaining
cost advantage and have control on prices,
because of the largest corporation of India,
and this means more customers than rivals. It
is necessary for the corporation to decrease
the bargaining power of buyers on segment
basis and increase the customer base.

B. Bargaining Power of Suppliers

The suppliers of the Reliance industry are many as compared to buyers. For example, in the
telecommunication industries, there are Samsung, LG, etc. who are providing the services
also, which lowers the price control of Reliance in telecommunication industry. However, in
case of not achieving the cost advantage, Reliance industries supply chain is very efficient
and can switch the suppliers. Reliance industries has to work on the supplier contractual
relationship, to achieve benefits and economies of scales.

C. Threats of New Entrants

Threats of new entrants for reliance industries is low as the corporation is a big giant of India,
and it is hard to compete with it for the newcomer. It requires huge capital and numerous
marketing strategies to build a good customer base for the new entrant. However, the reliance
industries should work more on building huge customer base of loyal customers and work on
customer relationship management. This will increase the switching cost psychologically.
The corporation should also develop the long-term contracts with the distributors for
broadening the access of target market.

PAGE 10
 STRATEGY

D. Threats from the Substitute Products

Threats from the substitute products for the Reliance industries is moderate however on the
individual basis it will be different, because there are many substitutes available for the
textile, telecommunication, etc. It is necessary for the reliance industries to increase the
switching cost of the products so that customers will not switch to the alternatives. Moreover,
consumers must not derive the same utility in terms of quality and prices from the substitute
products as per reliance industries products. The corporation should reduce the threats from
substitutes by offering more differentiated products and increase the switching costs.

E. Rivalry of Existing Players

Rivals do exist in the industry of textile, materials, telecommunication etc. and hence
Reliance industries compete with them at individual basis. It is important for the corporation
on implicit needs and the customers’ expectations for strengthening the differentiation. It is
necessary for the corporation to increase the switching cost to develop good customer
relationship. The corporation must spend more in R&D to open new doors for the company
and look more for mergers and acquisition to reduce the competition in the industry.

INTERNAL ENVIRONMENT ANALYSIS

A. Strengths of Reliance Industries
 First Indian company to cross 10 trillion by market capitalization
 Highest quality 5G ready digital platform
 Strong brand name
 Excellent financial position and strong profitability
 Highly automated operations
 Vast product portfolio

B. Weaknesses of Reliance Industries

 Less Investment on R&D compared to growing sectors
 Limited success outside core business
 Rigid organizational structure limiting expansion
 Inefficient use of shareholders fund - declining ROE

C. Internal Factor Evaluation Matrix (IFE):

Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing or
evaluating major strengths and weaknesses in functional areas of a business. IFE matrix also
provides a basis for identifying and evaluating relationships among those areas. The Internal
Factor Evaluation matrix or short IFE matrix is used in strategy formulation. In case of
Reliance Industries, we have analyzed the strengths and weakness and will now prepare the
matrix to establish which factor impacts the airlines the most. The ratings in internal matrix
refer to how effectively company’s current strategy responds to the Strengths and Weakness.
The numbers range from 4 to 1, where 4 means a Major Strength, 3 – Minor Strength, 2 –
Minor Weakness and 1 – Major Weakness. Ratings, as well as weights, are assigned
subjectively to each factor.

PAGE 11
 STRATEGY
Interpretation of the Matrix Prepared

RIL being the first company to cross 10 trillion mark by market capitalization and strong
brand name, is one of the biggest conglomerates of India. With it its highest quality 5G ready
digital plat form it is one of the few players in the market which can grow even faster rate
than at what it is growing right now. It enjoys great range of diversification. The major
weaknesses which come out here are its investment in R&D which is much lower when
compared to growing sector and furthermore all the it has many business verticals but it has
got limited success outside its core business. In the last 2 years RIL has not be able to
efficiently utilize shareholder’s fund. its return on equity has been declining. The total score
of the IFE matrix which is 3.30 is above average and show that RIL managed its internal
factors very soundly and that one of the reasons of its success.

VALUE CHAIN ANALYSIS

Value chain analysis is a way to visually analyze a company's business activities to see how the
company can create a competitive advantage for itself. Value chain analysis helps a company
understands how it adds value to something and subsequently how it can sell its product or
service for more than the cost of adding the value, thereby generating a profit margin. In other
words, if they are run efficiently the value obtained should exceed the costs of running them i.e.,
customers should return to the organization and transact freely and willingly.
Porter's Value chain model is extremely popular within the business world. However, Reliance
Industries should not take it as a rigid, standalone framework by distribution the equal
importance to all or any activities. The effective Value Chain Analysis needs Reliance Industries
to grasp that each one activity or functions don't need the same scrutiny level. Hence, the primary
step of adapting the Porter Value Chain framework is to spot the importance of activities per their
role in product/service delivery method.

Value Chain of Reliance Industries –

 Primary Activities
The primary value chain activities of Reliance Industries square measure directly concerned
in manufacturing and marketing the merchandise to targeted customers. Analysis of primary
value chain activities will improve the performance of Reliance Industries as explained
below.

 Inbound Logistics
It is vital to develop sturdy relationships with suppliers as their support is critical to
receive, store and distribute the merchandise. While not analyzing the in-bound
supplying, Reliance Industries will face varied challenges in development phases.
Analysis of in-bound supplying needs a corporation to target each facet of transformation
from material to finished product. Some samples of inward supplying square measure
retrieving material, storing the inputs and internally distributing the material and elements
to start
production.
PAGE 12
 STRATEGY

 Operations
The importance of analyzing operational activities rises once material arrives, and
Reliance Industries is prepared to method the material into the top product and launch it
within the market. Some samples of operational activities square measure machining,
packing, grouping and testing. Instrumentality repair and maintenance additionally falls
into this class. It includes both- producing and repair operations. Analysis of operational
activities is vital for up productivity, increasing the potency and making certain the
competitive success of Reliance Industries. The multiplied productivity will facilitate
Reliance Industries to realize the consistent economic process, increase profitableness
and set a strong basis for competitive advantage.

 Outbound logistics
Outbound supplying embraces the activities that deliver the merchandise to the client by
passing through totally different intermediaries. Some outward supplying activities
square measure material handling, deposition, scheduling, and order process, transporting
and
delivering to the destination. Reliance Industries will analyze and optimize the outward
supplying to explore competitive advantage sources and win its business growth
objectives. Because once outward activities square measure timely managed with best
prices and products delivery processes place a minimum negative impact on the standard,
it maximizes the client satisfaction and will increase growth opportunities for the firm.
Reliance Industries ought to pay specific importance o its outward Value chain activities
once its offered merchandise square measure biodegradable and need fast delivery to the
top client.

 Marketing & Sales

At this stage, Reliance Industries can highlight the advantages and differentiation points
of offered merchandise to steer the shoppers that its giving is best than competitors.
Solely manufacturing a prime quality product at reasonable prices and distinctive options
cannot produce Value until Reliance Industries invests on the selling and sales activities.
The sales agents and marketers play a crucial role here. Some samples of Reliance
Industries’ selling and sales activities are- sales department, advertising, promotional
activities, pricing, channel choice, quoting and building relations with channel members.
The corporate will use the selling funnel approach to structure its selling and sales
activities. The selling methods will either be push or pull in nature, counting on the
Reliance Industries’ business objectives, complete image, competitive dynamics and
current standing within the market. Effective and showing wisdom integrated selling
activities will develop the complete equity of Reliance Industries and facilitate it stand
out from the competition. However, Reliance Industries should avoid creating false
commitments concerning product options that can't be consummated by the assembly
department. It indicates the necessity to make sure coordination between totally different
Value chain activities.

 Services
The pre-sale and post-sale services offered by Reliance Industries can play a crucial role
in developing client loyalty. Trendy customers think about post-sale services as vital as
selling and promotional activities. The facility of negative WOM thanks to poor support
service can't be undermined within the current technologically advanced era. the
PAGE 13
 STRATEGY
corporate should analyze its support activities to avoid damaging complete name, and
instead use it as a tool to unfold the positive word of mouth thanks to fast, timely and
economical
support services.

 Secondary Activities
The support activities play a crucial role in coordinative and facilitating the first Value chain
activities. Reliance Industries can even enjoy the analysis of its support activities as
explained below.

 Firm infrastructure
The firm infrastructure denotes a spread of activities, such as- quality management, legal
matters handling, accounting, financing, designing and strategic management. Effective
infrastructure management will enable Reliance Industries to optimize of the entire value
chain. Reliance Industries will manage the infrastructure activities (or normally referred
to as overhead costs) to strengthen the competitive positioning within the market.

 Human resource management

Reliance Industries will analyze human resource management by evaluating different unit
of time aspects, including- recruiting, selecting, training, rewarding, performance
management and alternative personnel management activities. The effective unit of time
management will enable Reliance Industries to cut back competitive pressure supported
motivation, commitment and skills of its manpower. The corporate can even win its price
reduction objectives by analyzing hiring and coaching prices with their relative come.
The serious dependence of Reliance Industries on employees' talent can increase the
importance of this Value chain support activity.

 Technology development
In a trendy, technological advanced era, most value chain activities rely on technological
support. The technological integration in production, distribution, selling and human
resource activities needs Reliance Industries to grasp the importance of technology
development. It may be divided into product and method technological development
activities. Some examples are- automation software system, technology-supported client
service, and product style analysis and knowledge analytics. The analysis and
development department of Reliance Industries is classed during this class.

 Procurement
The procural in value chain denotes the processes concerned in getting the inputs which
will vary from instrumentality, machinery, material, supplies, material and alternative
things necessary for manufacturing the finished product. Thanks to its linkage with
multiple value chain activities, Reliance Industries ought to rigorously think about its
procural activities to optimize the inward, operational and outward value chain. As
mentioned on top of, the applying of the Porter value Chain model depends on
understanding the importance of all activities. When understanding the relative
PAGE 14
 STRATEGY
importance of known value chain activities, Reliance Industries ought to highlight areas
wherever value may be additional, price potency may be achieved, differentiation basis
may be set, or processes may be optimized.

STRATEGIES IDENTIFIED IN RIL

Strategy is an action that managers take to attain one or more of the organization’s goals.
Strategy can also be defined as “A general direction set for the company and its various
components to achieve a desired state in the future. Strategy results from the detailed strategic
planning process”. A strategy is all about integrating organizational activities and utilizing and
allocating the scarce resources within the organizational environment so as to meet the present
objectives.

With its diverse range of products and services varying from oil-to-telecom RIL caters the long
range of customers constituting in the age bracket of 5-60 years and even more with its retail
segment serving the wide range of customers as it has something for all. Its customers base
includes the lower middle class in rural to the high-class citizen living in metros.

Some of the identified strategies are –

 Product Strategy: Reliance Industries is one of the biggest conglomerates in India. Reliance
Industries has invested into several sectors and it contributes 20 % of India’s exports. Its
business is present in various sectors, which can be studied to understand Reliance’s product
strategy in its marketing mix. Retail sector includes Reliance Fresh, Big Bazaar, Reliance
Mart, Reliance Market, Reliance Home Kitchen, Reliance iStore and many more. In
production and selling of solar energy into rural areas, it introduced Reliance Solar. Reliance
Life Sciences is involved in Medical, Plant and biotechnology as it specializes in branding,
manufacturing and marketing Reliance industries products in bio pharmaceuticals. Reliance
logistics is involved in transportation, distribution, logistics, supply chain related activities
and telemetry solutions. Reliance Jio Infocomm ltd. is a broadband service provider, which
provides 4G services. Relicord is owned by Reliance Life Sciences and provides cord blood
banking services. Reliance Industrial Infrastructure Limited deals with construction and
operation of pipelines for transporting petroleum products. Hence, this gives an overview on
the offerings of Reliance Industries.

 Distribution strategy: With Pan-India distribution channel of over 1 Million retailers and
rapidly growing base of Reliance JIO Points and Reliance Retail Digital outlets also with
continuous enablement of various distribution channels through latest platforms and services
RIL holds the largest Distribution and Service Network in the country. With over 3,300 stores
pan India covering nearly13 million square feet of retail space and is growing rapidly
Reliance Retail operates over 3,300 stores pan India with nearly 13 million square feet of
retail space and is growing rapidly, Reliance has become the largest retailer in the country.

PAGE 15
 STRATEGY
 Price/Pricing Strategy: Reliance Industries follows different pricing strategy for different
sectors. Hence, the marketing mix pricing strategy of Reliance Industries is diverse, based on
competition and market leadership in some sectors. It follows penetration pricing for retail,
telecommunication and health. When the company launched Reliance Jio, it offered free Jio
services to its customers during the launch period to increase market share. However, the
retail and telecommunication sectors are at loss, but the company is providing offers to
customers to increase its customer base. The pricing decisions on petroleum sector largely
depends on the macro environment factors and global market scenario. Outlets such as
Reliance Fresh, procure its products directly from the source hence it has cut down on the
intermediaries thereby providing benefit to the consumer in terms of discount and price
reduction. Reliance Industries carries out thorough pricing analysis before coming to pricing
decisions and is influential factor for its rise in the competitive market.

 Promotional Strategy: Reliance, when compared with other companies, spends lesser in
promotions but believes in reducing prices to attract its customers. It sticks to more of BTL
advertising as compared to ATL as its costs less to the company, which it does mostly or its
retail sector and new launch products to create an initial buzz among the customers. RIL also
tries to make a social and emotional connection with its customers by holding various
rehabilitation programs and campaigns such as EFA (Education for All) which is Reliance
Foundation’s Social initiative through which RIL has been able to make education provision
for over 70,000 underprivileged kids over the last five years. RIL also invests heavily in
sports activities and events in the country with the company owning Mumbai Indians an IPL
cricket team and holding a stake of 65% in Indian Super League for football.

STRATEGY ANALYSIS
STAGE 2

Stage 2 of the strategy analysis of the company includes techniques like TOWS or SWOT
Analysis, BCG Matrix, SPACE Matrix and IE Matrix. To have a collective and unified strategy
we enter into the 3rd Stage using the QSPM Tool and help arrive at the best possible strategy for
the firm. In Stage 2 we will be analyzing the below techniques in detail w.r.t Reliance Industries
and help arrive at best possible strategy adaptation for the company.

A. SWOT or TOWS Matrix

SWOT Analysis (also known as SWOT Matrix) is a business framework that helps assessing
a wide variety of factors that may have a profound impact on a business’s performance.
These factors may either be internal to a company or external. Furthermore, these factors
may either be favorable/helpful or unfavorable/harmful to a company. By combining these
two dimensions one can draw a 2×2-matrix consisting of four quadrants: Strengths,
Weaknesses, Opportunities and Threats.
A TOWS Analysis is an extension of the SWOT Analysis framework that identifies your
Strengths, Weaknesses, Opportunities and Threats but then goes further in looking to match
up the Strengths with Opportunities and the Threats with Weaknesses. It’s a great next step
after completing your SWOT and allows for you to take action from the analysis. Adding the
PAGE 16
 STRATEGY
relationship between the internal and external factors makes TOWS a much more useful
matrix than a standalone SWOT and an obvious next step.

The relationship between the relative internal strengths and weaknesses of the company
have been prepared and noted in the matrix prepared.

Interpretation of the Matrix Prepared

With the incorporation of tows matrix, we have come up with possibilities which can be created
with the help of EFE and IFE. For the MAX MAX Strategy (SO) we came across that with its
highest quality 5G ready platform RIL can leverage in Ecommerce and digital space. Also, it
makes some innovation by using CMB as unconventional natural gas, with the help of its strong
financial position and highly automated operations. For the max mini strategy (ST) we can say
that competition can be tackled with the help of its strong brand name, vast product portfolio.
Mini Max Strategy (WO) provides with possible options of diversifying its business into more
verticals, which can eventually eliminate its one of the weakness of limited success outside the
core business. The MINI MIN Strategy (WT) brings up how the major concerns that RIL should
have a closer look at. Less investment in R&D can turn out to be edge provider for its
competitors. Also, some bit of organizational transformation is needed in terms of rigid
organizational structure.

B. BCG (Boston Consulting Group) Matrix:

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by
BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic
representation for an organization to examine different businesses in its portfolio on the basis
of their related market share and industry growth rates. It is a two-dimensional analysis on
management of SBU’s (Strategic Business Units). In other words, it is a comparative analysis
of business potential and the evaluation of environment. According to this matrix, business
could be classified as high or low according to their industry growth rate and relative market
share. Resources are allocated to the business units according to their situation on the grid.
The four cells of this matrix have been called as stars, cash cows, question marks and dogs.
Each of these cells represents a particular type of business.

o Stars- Stars represent business units having large market share in a fast-growing
industry. They may generate cash but because of fast growing market, stars require
huge investments to maintain their lead. If successful, a star will become a cash cow
when the industry matures.
o Cash Cows- Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and generate cash
that can be utilized for investment in other business units. When cash cows lose their
appeal and move towards deterioration, then a retrenchment policy may be pursued.
o Question Marks- Question marks represent business units having low relative market
share and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. They require attention to determine if the venture can
be viable. Question marks are generally new goods and services which have a good
commercial prospective. If ignored, then question marks may become dogs, while if
huge investment is made, then they have potential of becoming stars.
PAGE 17
 STRATEGY
o Dogs- Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. Due to low market
share, these business units face cost disadvantages. Unless a dog has some other
strategic aim, it should be liquidated if there are fewer prospects for it to gain market
share. Number of dogs should be avoided and minimized in an organization.

Interpretation of the Matrix Prepared

Looking at criteria under the BCG matrix, overall, we can place RIL into the star cell, as RIL
having one of the largest market-share in the Indian market. They are the undisputed leaders who
can grow more and more. But if we look into the sector wise, Reliance Jio, Reliance Fresh,
Reliance Trends, Jamnagar Refinery, Reliance Global Management Service, Reliance
Engineering Associates come under the star category; Reliance Petroleum under question mark;
Reliance Oil & Gas, Reliance Biopharmaceuticals and Rangers Farm Ltd. under cash cows and
Reliance Petrochemicals, Reliance Broadband and Reliance Digital under the dog category.

C. IE Matrix
The Internal-External (IE) Matrix positions an organization’s various divisions in a nine-cell
matrix. The IE Matrix is a strategic management tool which is used to analyze the current
position of the divisions and suggest the strategies for the future. The Internal-External (IE)
Matrix is based on an analysis of internal and external business factors which are combined
into one suggestive model. The IE matrix is a continuation of the EFE matrix and IFE matrix
models.

The Internal-External (IE) Matrix can be divided into three major regions that have different
strategy implications. First, the prescription for divisions that fall into cells I, II, or IV can be
described as grow and build. Intensive (market penetration, market development, and product
development) or integrative (backward integration, forward integration, and horizontal
integration) strategies can be most appropriate for these divisions. Second, divisions that fall
into cells III, V, or VII can be managed best withhold and maintain strategies; market
penetration and product development are two commonly employed strategies for these types
of divisions. Third, a common prescription for divisions that fall into cells VI, VIII, or IX is
harvest or divest. Successful organizations are able to achieve a portfolio of businesses
positioned in or around cell I in the IE Matrix.

Interpretation of the Matrix Prepared

As the matrix shows that the value lies in the 1s cell we can say RIL should move ahead with
Grow and build Strategy, intensive and aggressive tactical Strategy. RIL should focus market
penetration and market development.

D. SPACE Matrix
The SPACE matrix is a management tool used to analyze a company. It is used to determine
what type of a strategy a company should undertake. The Strategic Position & Action
Evaluation matrix or short a SPACE matrix is a strategic management tool that focuses on
strategy formulation especially as related to the competitive position of an organization. The

PAGE 18
 STRATEGY
SPACE matrix can be used as a basis for other analyses, such as the SWOT analysis, BCG
matrix model, industry analysis, or assessing strategic alternatives (IE matrix).

The analysis describes the external environment using two criteria:

o Environmental Stability (ES) - it is influenced by the following subfactors:
technological change, inflation rate, demand volatility, price range of competitive
products, price elasticity of demand, pressure from the substitutes
o Industry Attractiveness (IA) - it is influenced by the following subfactors: growth
potential, profit potential, financial stability, resource utilization, complexity of
entering the industry, labor productivity, capacity utilization, bargaining power of
manufacturers

The inside environment is also described by two criteria:

o Competitive advantage (CA) - it is influenced by the following factors: market share,
product quality, product lifecycle, innovation cycle, customer loyalty, vertical
integration

o Financial strength (FS) - it is influenced by the following indicators: return on

investment, liquidity, debt ratio, available versus required capital, cash flow,
inventory turnover

Interpretation of the Matrix Prepared

The pace matrix X axis and Y axis values provides us that RIL has adopted an Aggressive
Strategy and is looking to expand further more. As it holds a good position internally as well as
externally, we can see more aggressive business strategy coming up in future.

STAGE 3

E. QSPM Matrix
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic management
approach for evaluating possible strategies. Quantitative Strategic Planning Matrix or a
QSPM provides an analytical method for comparing feasible alternative actions.

When company executives think about what to do, and which way to go, they usually have a
prioritized list of strategies. If they like one strategy over another one, they move it up on the
list. This process is very much intuitive and subjective. The QSPM method introduces some
numbers into this approach making it a little more "expert" technique.

The QSPM comes under the third stage of strategy formulation which is called “The
Decision Stage” and also the final stage of this process. The best thing about QSPM is that it
never insists the strategist to enter the information on assumptions, it extract the information
from stage 1 The Input Stage and stage 2 the matching stage. The input stage is based on EFE
Matrix, IFE Matrix and CPM and stage 2 made up of TOWS matrix, SPACE Matrix, BCG
PAGE 19
 STRATEGY
Matrix, IE Matrix, Grand Strategy Matrix. The QSPM combine the intuitive thinking of
managers with the analytical process to decide the best strategy for the organization success.

Interpretation of the Matrix Prepared

By looking at the QSPM and all other matrix discussed earlier RIL should go ahead to
operate in more no. of business vertical, a more diversification is an apt strategy for RIL in
the prevailing scenario. The QSPM score for expansion in business verticals is 4.33 which is
more than 3.39 for use of CMB as unconventional natural gas. thus, the present moment it
would be much more efficient for RIL to diversify as it would be using all its strengths to
coup up with the underlying opportunities and removing all its Threats and weakness.

CONCLUSION
Reliance Industries Limited has been one of the biggest conglomerates of India which enjoys a
very large share in the Indian market and is one of the market leaders. By going through the
various matrices used in this report we have seen that it has covered all its internal as well as
external factors pretty well and enjoys a very good strategic position. it has created competitive
advantage over it big and small competitor. RIL has been able to leverage on its opportunities
pretty well and is in good position to grab all the opportunities which are in front. all though they
have certain threats, but with a good and sound strategic planning these can be eliminated. The
shifting sentiment towards EV can be a major threat to RIL. The stage two matrices suggest RIL
uses an aggressive strategy and should try to diversify its core businesses furthermore as it can
have a good advantage of its brand name and current excellent financial position. From the IE
matrix we came to know that RIL is in good position to move ahead with Grow and build
Strategy, intensive and aggressive tactical Strategy. Further these are confirmed with the help of
BCG and SPACE matrix, finally after the implementation of QSPM we came to the point that
diversifying its business vertical can be a better option compared to use of CMB as conventional
natural gas.

PAGE 20