Porter Five models Threats to New Entrants With the government deregulation there is always a threat of new entrants

into the market. Reliance power and other companies in the power sector always face the threat and as such they have to prepare themselves for the competition against the new entrants. Rivalry among existing firms:

Reliance power has competition against already established players like NTPC, Tata, Jindal, Adani NHPC, Jaiprakash Power Ventures Ltd, etc . So the company has to prepare itself for competition against them. The company should formulate its strategy in a way that it minimizes its costs and quotes less price for the different bids Threat of Substitute products The generators, solar energy are the main substitutes for th e electricity. The company has to formulate its strategy accordingly Bargaining power of Buyers This factor does not affect the company a lot because the company supplies electricity in a particular area and there is no other player in the same area, so the buyers cannot bargain Bargaining power of Sellers The bargaining power of sellers which include suppliers of coal, technology, manpower has a impact on reliance power and they should formulate their strategy accordingly Strategic Advantage Profile Critical Success Factors Factors:1) Engineering: Advance technology is available to the company .Use expertise will help reduce over dependence on imported technology. The entire gas-fired capacity will employ fuel and cost efficient advanced class turbines. Impact on firm is positive. (4) 2) Largest Portfolio Reliance portfolio of projects includes those in operation, those under construction and projects under development. Together, it constitutes an installed capacity of over 35,000 MW which is nearly 20% of Indias current installed generation capacity. They are the largest and the only private sector power generation company in India to have bagged three of the four Ultra Mega Power Projects (UMPP) awarded by the Government of India till date. So it has positive impact on the firms success. (3) 3) Diversification

They are developing a portfolio of power projects utilizing a variety of fuel sources and technologies. Upon completion our power projects will produce almost 20,000 MW of coal-fired capacity, 10,000 MW of gas-fired capacity and 4,620 MW of hydroelectric capacity. Positive effect (4) 4) Carbon Credits Most of the coal-fired power projects will employ supercritical or ultra-supercritical technology, which will entitle the company to earn carbon credits. Positive (5) 5) Strategically Located Power Projects Our projects are situated in close proximity to the sources of fuel or load centers. In addition the geographic spread of power projects in Western, Southern, Eastern and North-Eastern parts of India across seven states will enable us to supply power to different load centers. This geographic proximity to load centers and sources of fuel helps us to minimize the added costs of fuel transport and power transmission. Also this geographic spread and fuel diversification mitigates the dependence on a particular region and fuel type or source. Positive (4) 6) Fuel Access Security With substantial captive coal reserves in India and Indonesia, we expect to meet most of our fuel needs for our coal fired capacity. The four captive coal mines in India that have been allocated have coal reserves of almost 2 billion tones. We have also acquired economic interest in three Indonesian coal mines, from which we will import coal for some of our coal-fired power projects. Positive (5) 7) Diversified Power Off-take Arrangements We have entered into a variety of long-term and medium-term power off-take arrangements which will ensure stable and committed revenues and short-term off-take arrangements which will allow generation of higher returns from the premium on power sold in the spot market. Positive (4) 8) Focusing on Power Deficit Regions They intend to locate our power projects and enter into off-take arrangements in power deficit regions that typically support higher market-wide tariffs. We will continue to concentrate our off-take arrangements on the Western and Northern regions of India, which we believe will comprise the bulk of power demand in India. Positive (3) 9) Electricity prices They also intend to focus our merchant off-take sales in these two regions to derive better returns on power generated from our projects. Positive (3)