Reliance industries is the private limited corporation listed in the Fortune 500 and known to be the biggest private sector organization in India. The moto of the company is “Growth is Life” and this aptly captures ever-evolving objectives and spirit of the corporation. The corporation has evolved itself from being only polyester and textile company to integrated player of energy, retail, digital services, entertainment, materials, and telecommunication. It is committed in every single area and led innovation for the exponential growth. The vision of the company has pushed itself to achieve the global leadership across various businesses. The products of reliance and its services portfolio has been touching the Indians clients daily in both social and economic spectrums. The company is focused on building the platforms which will herald the industrial revolution and bring more opportunities and different avenues for Indians (Reliance industries, 2019). Reliance industries is working in different industries and its every segment has to compete with rivals in order to stay in the market. For determining the competition level in the industry, it is essential for the company to use Porter five forces model, which helps in identifying the strategic position of the industry and helps in making effective decisions. Here is the porter five forces analysis of Reliance industries.
Bargaining Power of Buyers
The bargaining power of buyers in case of reliance industries is moderate on aggregate level, but its different in individual basis. For example, bargaining power of buyer is high in telecommunication industry of reliance, because of multiple options available, and so in the textile industry. However, on the aggregate level it is gaining cost advantage and have control on prices, because of the largest corporation of India, and this means more customers than rivals. It is necessary for the corporation to decrease the bargaining power of buyers on segment basis and increase the customer base (Manoj, 2012).
Bargaining Power of Suppliers
The suppliers of the Reliance industry are many as compared t buyers. For example, in the telecommunication industries, there are Samsung, LG, etc. who are providing the services also, which lowers the price control of Reliance in telecommunication industry. However, in case of not achieving the cost advantage, Reliance industries supply chain is very efficient and can switch the suppliers. Reliance industries has to work on the supplier contractual relationship, to achieve benefits and economies of scales (Murphy, 2018).
Threats of New Entrants
Threats of new entrants for reliance industries is low as the corporation is a big giant of India, and it is hard to compete with it for the newcomer. It requires huge capital and numerous marketing strategies to build a good customer base for the new entrant. However, the reliance industries should work more on building huge customer base of loyal customers and work on customer relationship management. This will increase the switching cost psychologically. The corporation should also develop the long-term contracts with the distributors for broadening the access of target market (Henry, 2018).
Threats from the Substitute Products
Threats from the substitute products for the Reliance industries is moderate however on the individual basis it will be different, because there are many substitutes available for the textile, telecommunication, etc. It is necessary for the reliance industries to increase the switching cost of the products so that customers will not switch to the alternatives. Moreover, consumers must not derive the same utility in terms of quality and prices from the substitute products as per reliance industries products. The corporation should reduce the threats from substitutes by offering more differentiated products and increase the switching costs (Henry, 2018).
Rivalry of Existing Players
Rivals do exist in the industry of textile, materials, telecommunication etc. and hence Reliance industries compete with them at individual basis. It is important for the corporation on implicit needs and the customers’ expectations for strengthening the differentiation. It is necessary for the corporation to increase the switching cost to develop good customer relationship. The corporation must spend more in R&D to open new doors for the company and look more for mergers and acquisition to reduce the competition in the industry (Henry, 2018).
References
Henry, Z. 2018. Reliance Industries Porter Five Forces Analysis. [Online], Available at: https://www.case48.com/porter-analysis/13986-Reliance-Industries, [Accessed on: 16th July, 2019].
Manoj, 2012. Reliance. [Online], Available at: https://www.slideshare.net/manojkumawat330/reliance-12030987, [Accessed on: 16th July, 2019].
Murphy, E. 2018. Reliance Industries Porter Five Forces Analysis. [Online], Available at: https://www.essay48.com/term-paper/13986-Reliance-Industries-Porter-Five-Forces, [Accessed on: 16th July, 2019].
Reliance industries, 2019. About our company. [Online], Available at: https://www.ril.com/OurCompany/About.aspx, [Accessed on: 16th July, 2019].