Reliance Industries: An Emerging Player in Global Petrochemicals and Energy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reliance Industries: An Emerging Player in Global Petrochemicals and Energy
Reliance Industries had evolved into a major player in the Asia Pacific region and had begun to make its presence felt in the global petrochemicals and refining business segments. It had also made forays into exploration and production for oil and gas in multiple regions worldwide. This case study addresses the evolution of the company from a fairly small-scale textile manufacturer to a global powerhouse. It provides insights into how the company was able to trade on its competitive advantages at home in building a global strategy. The case allows for a rich thematic discussion around understanding the modes of competition adopted by companies from newly industrializing contexts.
Swot Analysis of "Reliance Industries: An Emerging Player in Global Petrochemicals and Energy" written by Kannan Ramaswamy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Petrochemicals Reliance facing as an external strategic factors. Some of the topics covered in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy case study are - Strategic Management Strategies, Globalization and Global Business.
Some of the macro environment factors that can be used to understand the Reliance Industries: An Emerging Player in Global Petrochemicals and Energy casestudy better are - – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Reliance Industries: An Emerging Player in Global Petrochemicals and Energy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Petrochemicals Reliance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Petrochemicals Reliance operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Reliance Industries: An Emerging Player in Global Petrochemicals and Energy can be done for the following purposes –
1. Strategic planning using facts provided in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy case study
2. Improving business portfolio management of Petrochemicals Reliance
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Petrochemicals Reliance
Strengths Reliance Industries: An Emerging Player in Global Petrochemicals and Energy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Petrochemicals Reliance in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Petrochemicals Reliance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Petrochemicals Reliance has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Petrochemicals Reliance is one of the leading recruiters in the industry. Managers in the Reliance Industries: An Emerging Player in Global Petrochemicals and Energy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Petrochemicals Reliance is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Petrochemicals Reliance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Petrochemicals Reliance has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Petrochemicals Reliance has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Global Business field
– Petrochemicals Reliance is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Petrochemicals Reliance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Petrochemicals Reliance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Petrochemicals Reliance has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Petrochemicals Reliance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Petrochemicals Reliance has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Global Business industry
– Reliance Industries: An Emerging Player in Global Petrochemicals and Energy firm has clearly differentiated products in the market place. This has enabled Petrochemicals Reliance to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Petrochemicals Reliance to invest into research and development (R&D) and innovation.
Innovation driven organization
– Petrochemicals Reliance is one of the most innovative firm in sector. Manager in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Petrochemicals Reliance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Petrochemicals Reliance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Reliance Industries: An Emerging Player in Global Petrochemicals and Energy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reliance Industries: An Emerging Player in Global Petrochemicals and Energy are -
Workers concerns about automation
– As automation is fast increasing in the segment, Petrochemicals Reliance needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Petrochemicals Reliance supply chain. Even after few cautionary changes mentioned in the HBR case study - Reliance Industries: An Emerging Player in Global Petrochemicals and Energy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Petrochemicals Reliance vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy, it seems that the employees of Petrochemicals Reliance don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Petrochemicals Reliance has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Petrochemicals Reliance even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Petrochemicals Reliance has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Petrochemicals Reliance has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Petrochemicals Reliance is dominated by functional specialists. It is not different from other players in the Global Business segment. Petrochemicals Reliance needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Petrochemicals Reliance to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Petrochemicals Reliance 's lucrative customers.
Slow to strategic competitive environment developments
– As Reliance Industries: An Emerging Player in Global Petrochemicals and Energy HBR case study mentions - Petrochemicals Reliance takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Petrochemicals Reliance has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Reliance Industries: An Emerging Player in Global Petrochemicals and Energy should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Petrochemicals Reliance has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Reliance Industries: An Emerging Player in Global Petrochemicals and Energy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Petrochemicals Reliance in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Loyalty marketing
– Petrochemicals Reliance has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Petrochemicals Reliance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reliance Industries: An Emerging Player in Global Petrochemicals and Energy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Petrochemicals Reliance to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Petrochemicals Reliance to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Petrochemicals Reliance can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Petrochemicals Reliance can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Petrochemicals Reliance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Petrochemicals Reliance can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Petrochemicals Reliance has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Petrochemicals Reliance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Petrochemicals Reliance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Petrochemicals Reliance can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Petrochemicals Reliance is facing challenges because of the dominance of functional experts in the organization. Reliance Industries: An Emerging Player in Global Petrochemicals and Energy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Petrochemicals Reliance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Reliance Industries: An Emerging Player in Global Petrochemicals and Energy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Petrochemicals Reliance
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Petrochemicals Reliance.
Consumer confidence and its impact on Petrochemicals Reliance demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Petrochemicals Reliance business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Petrochemicals Reliance in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Petrochemicals Reliance needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Petrochemicals Reliance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Petrochemicals Reliance has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Petrochemicals Reliance needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Petrochemicals Reliance in the Global Business sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Petrochemicals Reliance can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy .
Stagnating economy with rate increase
– Petrochemicals Reliance can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Petrochemicals Reliance will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Petrochemicals Reliance needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Petrochemicals Reliance can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of Reliance Industries: An Emerging Player in Global Petrochemicals and Energy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Reliance Industries: An Emerging Player in Global Petrochemicals and Energy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Petrochemicals Reliance needs to make to build a sustainable competitive advantage.
