Ambani outpaces

Biyani (Reliance
buying Big Bazaar)
PRESENTED BY -
OSD Group 9
 Introduction

Issues of Future Group that lead

to its downfall

Contents
Factors that made Reliance
invincible

Organizational Structure and Design of

Future Group

Organizational Structure and Design of

Reliance Industries

How Reliance handled the situation

Introduction
In August 2020, Reliance signed an agreement to buy Future Group's retail, wholesale, logistics,
and warehousing businesses for $3.4 billion. This acquisition allowed Reliance to expand its
retail footprint in India and strengthened its position as the country's largest retailer.

Prior to the acquisition, Biyani's Future Group had been struggling with debt and was in talks to
sell its businesses to Reliance. However, the deal was challenged by Amazon, which had
invested in Future Coupons, a Future Group entity. Amazon argued that the deal violated its
agreement with Future Coupons, which gave it the right of first refusal if Future Group were to
sell its businesses to a third party. The case is still ongoing.

In contrast, Reliance has been expanding rapidly in recent years through various acquisitions
and partnerships. It has diversified into sectors such as telecommunications, digital services,
and energy, and has become one of India's most valuable companies.

Overall, Ambani's Reliance has outpaced Biyani's Future Group due to its strong financial
position, strategic acquisitions, and diversification into various sectors.
Issues of Future Group
that lead to its downfall
Heavy debt
burden
Future Group had accumulated
a significant amount of debt,
which had been a concern for
investors for several years. This
was mainly due to the
acquisition of Bharti Retail,
which added to the company's
debt burden. The high debt
levels made it challenging for
the company to invest in
growth initiatives and generate
profits.
Over-expansion
Future Group had expanded
rapidly in the past, opening
several new stores and launching
new businesses. However, this
expansion was not always
profitable, and the company
struggled to generate enough
revenue to cover its costs. In
some cases, Future Group had to
shut down stores that were not
performing well, which affected
the company's financial
performance.
Inability to
compete with
online retailers
Online retailers such as Amazon
and Flipkart had captured a
significant portion of the Indian
retail market. Future Group was
slow to adapt to the changing
market conditions and did not
invest enough in its online
presence. As a result, the company
faced intense competition from
online retailers, which affected its
revenue and profitability.
COVID-19
pandemic
The COVID-19 pandemic had
a significant impact on the
Indian economy and the
retail sector. Future Group
was forced to shut down its
stores during the lockdown,
resulting in a significant
decline in revenue. The
company had to lay off
several employees and
renegotiate rent agreements
with landlords to survive.
Factors that made Reliance
invincible

Diversification

Strong financial position

Innovation

Leadership
Organizational Structure
and Design of Future Group

Decentralized
Slow adoption of
Organizational
technology
Structure

While this can be an advantage in terms of flexibility Future Group was slow to adopt new technologies
and innovation, it can also lead to a lack of and e-commerce. While other retailers were investing
coordination and consistency across the in online platforms and digitizing their operations,
organization. This structure may have led to Future Group was slow to react. This led to a decline
communication gaps, siloed decision-making, and a in sales and market share as more consumers shifted
lack of cohesion across the company. towards online shopping.
Organizational Centralized organizational structure
Reliance Industries Limited (RIL) has a highly centralized organizational

Structure and structure, with a clear chain of command and a well-defined hierarchy.
This ensures that decisions are made quickly and efficiently, and that
everyone in the organization knows their roles and responsibilities.

Design of
Acquisition Strategy
Reliance The company has acquired several companies in recent years, including

Industries
Jio, Netmeds, and Hamleys, among others. These acquisitions have
helped Reliance to expand its reach in the telecommunications, e-
commerce, and retail sectors, among others.

Technology & Innovation

The company has implemented several technological solutions across
its supply chain, including advanced data analytics, AI-powered
Back to Agenda Page inventory management systems, and blockchain-based traceability
systems.
How Reliance handled
the situation
Pursuing the deal Confidence in its legal position

Negotiating with Amazon Seeking regulatory approval

Building public support Engaging with stakeholders