Reliance Industries : An Emerging Player In

Global Petrochemicals & Energy.

By Group 6

Amey K Patil
Vinayak Parmar
Mukesh Chandra Kumar
Praveen Chava
Saptarshi Mondal

What do you think are the factors that led to the emergence of RIL?
Do you think these factors still exist?
Ans:
Initial factors were quality and control over value chain.
Unique vision of RIL which redefined the potential of the Indian corporate sector as RIL
challenged conventional wisdom in several areas.
Inability of other companies to recognize the strategic significance of investors.
Inability of other companies to discover the vast untapped potential of the capital markets and
channelising it for the growth and development of industry.
Absence of new competitor due to high entry barriers courtesy license quota raj.
Close working relationship of RIL with top to bottom governmental set up.

We dont think these factors still exist
As post 1991 economic reforms those high entry barriers no longer exists and Indian economy has
transformed into market economy.
Due to abolishing of license raj any organization can import and adapt new technology.
Most of the organisations have understood the importance of investors which can be seen from the no of
IPOs that have been issued post 1991.

Excess capacity seems to be a norm in many of the RIL
developments? Do you think it is good to build large capacity
especially in areas where prior knowledge for the organization is
scanty? What are the risks? How did (does) Reliance managed
(manages) it
ANS:
We think it is appropriate or feasible to company like RIL to build large or excess capacity as it already
has high brand value and strong financial muscle. But for a upcoming organization to build large capacity
especially in areas where prior knowledge is scanty will not be good.
Following are the risks:
Higher fixed costs per unit mean reduced profitability; if prices were raised to cover these costs, this
would probably lead to reduced sales unless the product was price inelastic
Spare capacity can portray a negative image, particularly in a business where it can be seen that it is no
longer busy such as a shop or a health club - signifying loss of popularity
Abundance of hazards at single location


Cont.
Excess capacity seems to be a norm in many of the RIL
developments? Do you think it is good to build large capacity
especially in areas where prior knowledge for the organization is
scanty? What are the risks? How did (does) Reliance managed
(manages) it
ANS:
RILs Management of Large/excess capacity:
Excess capacity was acquired with the purpose to reduce cost per unit production and compete with
global top players instead of domestic competitors.
Implemented latest Technology available in Market.
Fast project execution which had started earning profit in record time leading to positive image of RIL
on Market, Customer and shareholders.
Efficient Operation with target of minimum wastage.
Committed Manpower.

As a manufacturing (or a tehno commercial) professional employee
of RIL, what do you think are your major challenges in realising the
Vision of RIL to be a leading global player? What are your
immediate drivers and obstacles
ANS:
Major challenges in realising the Vision of RIL to be a leading global player are as follows:
Upcoming refineries in middle east.
Competition from low cost Chinese players.
Reliances image of predominantly B to B player.
Drivers :
Emergence of India as a major economy.
Core competency in Project execution.
Strong financial base.
Experience in working in diverse businesses.
Obstacles:
1. Fluctuation in Crude prices.
2. Geo political situation in middle east.
3. High attrition rate of competent personnel
4. Cultural change.

Do you think the success of RIL is sustainable- in India? in other
parts of the world? in other domains? Why?
ANS:
1. In India & World, RIL success is sustainable.

2. In other domain also it is sustainable.

3. RIL growth can be sustainable in India, in the world and in other domain because of
Fast project execution capability,
Committed manpower,
Open environment for building competency,
Environment friendly efficient operations
References:
1) Reliance Industries: An Emerging Player in Global Petrochemicals and Energy,
By-Kannan Ramaswamy

2) Reliance website.