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 - – digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, there is backlash against globalization, challanges to central banks by blockchain based private currencies, wage bills are increasing, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
Operational resilience
– The operational resilience strategy in the Reliance Industries: An Emerging Player in Global Petrochemicals and Energy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
Analytics focus
– Petrochemicals Reliance is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Kannan Ramaswamy can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
Diverse revenue streams
– Petrochemicals Reliance is present in almost all the verticals within the industry. This has provided firm in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Petrochemicals Reliance has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Reliance Industries: An Emerging Player in Global Petrochemicals and Energy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Low bargaining power of suppliers
– Suppliers of Petrochemicals Reliance in the sector have low bargaining power. Reliance Industries: An Emerging Player in Global Petrochemicals and Energy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Petrochemicals Reliance to manage not only supply disruptions but also source products at highly competitive prices.
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.
Aligning sales with marketing
– It come across in the case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Reliance Industries: An Emerging Player in Global Petrochemicals and Energy can leverage the sales team experience to cultivate customer relationships as Petrochemicals Reliance is planning to shift buying processes online.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Petrochemicals Reliance is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Need for greater diversity
– Petrochemicals Reliance has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy, in the dynamic environment Petrochemicals Reliance has struggled to respond to the nimble upstart competition. Petrochemicals Reliance has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 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.
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.
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 -
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.
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.
Creating value in data economy
– The success of analytics program of Petrochemicals Reliance has opened avenues for new revenue streams for the organization in the industry. This can help Petrochemicals Reliance to build a more holistic ecosystem as suggested in the Reliance Industries: An Emerging Player in Global Petrochemicals and Energy case study. Petrochemicals Reliance can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Learning at scale
– Online learning technologies has now opened space for Petrochemicals Reliance to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
Developing new processes and practices
– Petrochemicals Reliance can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Better consumer reach
– The expansion of the 5G network will help Petrochemicals Reliance to increase its market reach. Petrochemicals Reliance will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Petrochemicals Reliance can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Petrochemicals Reliance can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Petrochemicals Reliance can use these opportunities to build new business models that can help the communities that Petrochemicals Reliance operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 -
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.
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.
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.
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.
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.
High dependence on third party suppliers
– Petrochemicals Reliance high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Petrochemicals Reliance needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reliance Industries: An Emerging Player in Global Petrochemicals and Energy, Petrochemicals Reliance may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Petrochemicals Reliance.
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.