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 - – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, 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 -
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Petrochemicals Reliance are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of Petrochemicals Reliance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
Organizational Resilience of Petrochemicals Reliance
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Petrochemicals Reliance does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
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.
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.
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.
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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kannan Ramaswamy suggests that, Petrochemicals Reliance is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
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.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Petrochemicals Reliance can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Reliance Industries: An Emerging Player in Global Petrochemicals and Energy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Petrochemicals Reliance in the consumer business. Now Petrochemicals Reliance can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
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.
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.
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 -
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 .
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.