Reliance Industry Sm Project

Introduction

The Reliance Industries India group is India's largest private sector conglomerate. The Reliance Industries Limited was started by the legendary
Late Dhirubhai H. Ambani
After a humble start in the late 1970’s as a textile company its success skyrocketed and now covers almost all industry verticals. Today, Reliance Industries generates revenues in excess of USD22 billion and exports products worth USD 7 billion to more than 100 countries. The Reliance Industries Limited is a ‘Fortune Global 500 company’ and employs more than 25,000 professionals across the world. Reliance enjoys leadership in polyester yarn & fiber produce and is among the top 5 players in the world in major petrochemical products. Reliance Industries Limited holds largest Oil & Gas exploration area in India and has achieved 74 % success rate in terms of discoveries. Reliance Industries India has been a pioneer in the equity culture and is highly respected for its corporate transparency, deep market penetration ability, innovations and above all for its ability to generate ‘products & services’ for all sections of the society. Its guardianship for India inc. stupendous growth has been felicitated with no. of awards in areas like quality, Energy Management, Health Safety & Environment, Exports and Retail and franchising. It also bagged ‘Golden peacock Award’ for Corporate Management in 2005-2006 and enjoys high corporate ranking in Fortune Global 500 Company.

History

From a humble textile company to Fortune 500 Company
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India’s largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 28 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with Textiles in the late seventies, Reliance pursued a strategy of backward vertical integration- in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiber producer in the world and among the top five toten producers in the world in major petrochemical products. Group Profile
Major Subsidiaries -
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Reliance Petroleum Limited
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Reliance Netherlands BV (including Trevira)
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Reliance Retail Limited
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Ranger Farms Private Limited
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Retail Concepts and Services Private Limited
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Reliance Retail Insurance Broking Limited
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Reliance Dairy Foods Limited
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Reliance Retail Finance Limited
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Reliance Jamnagar Infrastructure Limited
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Reliance Haryana SEZ Limited
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Reliance Industrial Investment & Holdings Limited
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Reliance Ventures Limited
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Reliance Strategic Investments Limited
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Reliance Exploration & Production - DMCC
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Reliance Industries (Middle East) DMCC
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Reliance Global Management Services (P) LimitedMajor Associates -
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Indian Petrochemicals Corporation Limited
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Reliance Industrial Infrastructure Limited

Vision & Mission
Mukesh Ambani,
Chairman of Reliance Industries Ltd,
India’s largest private company laid down a road map for business transformation and value creation for the company at its 35th annual general meeting. This has been a truly transformational year at Reliance Industries (RIL).The successful commissioning of the
KG-D6 oil and gas production fields and the safe start-up of the world-class, complex refinery in the Special Economic Zone at Jamnagar catapults RIL into the league of
Integrated energy Companies globally. RIL is now among the ten largest Non-states owned refining companies and one of the largest deepwater oil and gas operators in the world. Through these path-breaking initiatives, RIL is set to radically change India’s energy landscape. Gas production from KG-D6 will double India’s indigenous production while the new refinery will make India a major supplier of ‘green-fuels’ to the world. Over the years, our initiatives have enabled the enrichment of millions of lives in India. We focused on improving efficiency, leveraging on the quality of our assets and remaining nimble. This reflects the strength of our business model, robustness of our systems and processes, farsighted planning, meticulous execution and above all, our indomitable will to succeed. While staying focused on our long-term strategy, we have remained committed to protecting our employees, ensuring their safety, supporting local communities and safeguarding the environment. Looking forward, we see exciting opportunities for growth in the energy sector. At RIL, we have always invested aggressively into businesses of the future. Our recent investments in the oil and gas and refining businesses have created a strong growth platform.
RIL is on its way to becoming a competitive, integrated, global energy company.

Awards and honors
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Shri Mukesh Ambani was awarded the Defense India Excellence Award2007. The Award is a salute to those who have made the country proud.
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Shri Mukesh Ambani was conferred the Leadership Award for GlobalVision by the United States India Business Council.
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Shri Mukesh Ambani was elected to be a member of the Honorary Fellowsof The Institution of Chemical Engineers, UK.
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Dr. R. A. Mashelkar received 'Foreign Fellow' from Australian Academyof Technological Sciences and Engineering (ATSE) in 2008.
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RIL continues to be featured, for the fifth consecutive year, in the FortuneGlobal 500 list of 'World's largest corporations'; ranking for 2009 is asfollows: o Ranked 264th in terms of sales o Ranked 117th in terms of profits
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RIL won the Golden Peacock Global Award for Excellence in CorporateGovernance for the year 2008.
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Jamnagar Manufacturing Division bagged the 'Refinery of the Year Awardfor 2008', for second successive year from 'Petroleum Federation of India'.
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Shri Mukesh Ambani received the American India Foundation's (AIF),USA, 'The 2008 Annual Spring Gala Award' in 2008.
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Shri Mukesh Ambani was conferred the Leadership Award for GlobalVision by the United States India Business Council.

BUSINESS ENVIRONMENT FOR RELIANCE INDUSTRIES LIMITED.

Business environment is the constraints and opportunities that surround our businesses. This is about exploring the nature of the business in which it is being carried out.

The analysis in this essay will be on business environment in which Reliance Industries Limited operates.

Reliance Industries Limited or RIL is commonly known as Reliance. The company was founded by Shri. Dhirubhai H. Ambani in 1977 the company was initially started as a textile company and led its evolution as a world leader in materials and the energy value chain

The Company's operations can be classified into four segments namely:

Petroleum Refining and Marketing business

Petrochemicals business

Oil and Gas Exploration & Production business

Others

There are two types of business environment INTERNAL and EXTERNAL environment

Before coming on to the external forces, the internal forces should be made clear.

The internal forces are those forces which are controlled by the organisation itself such as the resources knowledge and decision making

Reliance in the above context has a wide variety of resources such as well qualified employees and infrastructure

As far as knowledge and decision making is concerned Because Reliance recruits very well qualified persons thereby it reflects when it comes to the decision making process of the company

External business environment comprises of Political, Economic, Social and Technological factors. These factors can have appositive as well as a negative impact on the company. There are two types of external business environment i.e. micro and macro

External micro factors are company’s suppliers, transporters, agents, distributers, and wholesalers.

External macro factors comprises of Political, Economic, Social and Technological factors.

The external micro factors can be influenced by the organisation whereas macro factors cannot be influenced by the organisation

Polypropylene market in India

Over the past forty years polypropylene growth has exceeded that of other major plastics and has become the largest volume commodity resin. Throughout the history of PP through research efforts of various companies, PP has continued to rapidly evolve with new generation of catalyst and post reactor technology. Because of the improvements made to process and application technology, this polymer has developed into one of the cost-effective bulk thermoplastic. Polypropylene is the world’s fastest growing polymer with an average growth rate of about 7-8%.

It is very important for a company to understand and try to manage the external micro factors i.e. PEST forces as discussed above

POLITICAL FACTORS

Political factors include government policies relating to the industry, tax policies, laws and regulations, trade restrictions and tariffs etc. As in any part of the world, political influence is highly essential to start a business in India. Especially if you are planning to start a multi-billion business, some sort of political patronage is an absolute necessity. Not only for safeguarding the interest of the company but even to begin the process of getting the required sanctions, one requires hold in the high echelons of politics and administrative circles.

Reliance industries also hold a high echelon of political and administrative circles so as to safeguard the interest of a company and for getting the required sanctions.

ECONOMICAL FACTORS

The economic factors relate to changes in the wider economy such as economic growth, interest rates, exchange rates and inflation rate, etc. These factors comprise of Government intervention in the free market, infrastructure quality, economic growth rate, availability of labour, wage rate of labour.

SOCIAL FACTORS

Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, changes in tastes and buying patterns, etc.

Safety of a person overrides all the production targets' is the Health, Safety and Environment Policy of Reliance.

Occupational Health Centres (OHCs) have been established to provide education on health and awareness issues, diagnostic camps and health exhibitions are also arranged. RIL also offers periodic medical examination of all the employees (including Contractors' employees) along with their family members. In case of any hospitalisation RIL employees are supported by consistent co-operation and cashless hospitalisation amenities from one corner of a country to another. The company also provides fully equipped hospitals in all its major townships. The company also helps conduct Periodic potable water sampling analysis and health audits for the canteens and guest houses.

A new initiative was launched by RIL called (CASHe) programme i.e. Change Agents for Safety, Health & workplace Environment. This initiative was launched to promote healthy workplaces and reduce health and safety risks. It has also facilitated the Syndicate to advance its enactment on the occupational health and safety front.

The company’s long term objective is to address all environmental initiatives as they want to become more positive about water conservation, carbon neutral and conduct the maximum possible recycling and reuse of wastes. The company has further been reinforced in context of company’s management framework with roles responsibilities, group standards and defined structures.

RIL’s Patlganga plant has changed over to use of a cleaner fuel. This resulted in substantial reduction of suspended particulate substance and sulphur dioxide releases in the air.

RIL has indoctrinated a practice to be in coordination with nature and in this circumstance, afforestation, upkeep of green belts and promoting lush green surroundings as they have decided to planted around 1,00,000 plants at the OT, gardens, vermin-compost of waste and its use as manure, they also reuse treated water for horticulture activities as a routine.

TECHNOLOGICAL FACTORS

The technological factors relate to the application of new inventions and ideas such as R&D activity, automation, technology incentives and the rate of technological change.

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RIL has always laid emphasis on R&D, technology development and innovation. The reliance Group (RTG) undergoes various research and technology functions which help them produce improved value supply by leveraging all the abilities, and creating new prospects at the interfaces.

At the time of recession also RIL did not even step back their zeal to innovate helped them convert the adversity into an opportunity. The company launched a ground-breaking initiative called “mission kurukshetra” which was aimed at emerging the organisation to rise to the occasion and also help the company to emerge stronger.

This initiative not only helped in combatting the challenges with a win but also identified serial ideators; the enterprise facilitated them by rewarding them for their leadership. The Leading Expert Access Programme (LEAP). The people at RIL are inspired by leaders and also provide them access to global thought.

The RIL draws an agenda on innovation with the help of The Reliance Innovation Leadership Centre (RILC) which helps the company to stay amongst one of the most innovative companies in the world. RIL continues its journey to make improvement a way of life and want to confirm that the growth of the next generation are led by innovation.

Advantages of PEST analysis:

PEST analysis is an effective and efficient tool, which provides a framework to an organisation for effective decision making. By making effective use of PEST analysis, one can ensure affirmative orientation of the business organisation. PEST analysis also helps an organisation in avoiding decisions which should not be taken. PEST analysis helps in making lawful decisions for the companies which are willing to enter into a new market.

Disadvantages of PEST analysis:

PEST analysis considers only the external business factors, but in reality all the factors should be considered in order to make effective decisions for an organisation. Most of the data gathered through this analysis is based on assumptions, which sometimes may not prove to be fruitful for an organisation. The rapid changes in the world economy can also make it difficult in analysing PEST factors for an organisation.

Another factor which comes under consideration is the SWOT analysis of the company SWOT stands for strengths weakness opportunities and threats.

RIL’s SWOT analysis is as follows:

STRENGHTS

Consolidations:

There are only two main players of in petrochemicals and a solid consolidation has been seen in last few years as 85% of polymer capacity is with these companies namely reliance and haldia

WEAKNESS

Low bargaining power from the suppliers:

The input prices form nearly 50-60% of the raw material costs. Reliance being a petrochemical player does not have much of a negotiating power counter to the suppliers. Therefore they always remain unprotected to the prices of the raw material.

Low bargaining to from the customers:

As there is an increase in the input cost therefore the companies are not able to offer any price reductions or bargains to the customers.

OPPERTUNITIES

Low per capita income:

Currently, domestic per person polymer consumption is nearly 4 kgs while if we see the global average it is nearly 20 kgs. This tells the fact that there is huge scope of volume expansion in INDIA as the market to be selected is very massive.therefore there is a massive scope of product development. Also, currently, India has a chemicals trade deficit of about US$ 1.5 bn a year, which leaves enough investment opportunities in the industry.

Threats

Customs duties:

The polymer industry has a protection from overseas competition by leveraging high import duties imposed by the government. However, of late, Import duty on polymers has been

steadily reduced and is currently at 20%. As part of its commitment to various multilateral and bilateral trade agreements, the government is likely to reduce duties.