The document is a project report on conducting a SWOT analysis of Reliance Retail. It provides an executive summary and objectives. It then gives a company profile of Reliance Retail and its founder. The SWOT analysis identifies key strengths like brand equity, financial position, and backward/horizontal integration. Weaknesses included high costs from multi-format presence and prime locations. Opportunities and threats were also examined.

1. Project report
On
“SWOT analysis of Reliance retail”
Submitted By: Submitted To:
Mukesh Kumar Mr. Amit Sharma
Roll No. 27 Faculty Retail Strategy
PGDRM-2B FDDI
Table of Contents
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2. S. No. Topic Page No.
1.0. Executive Summary 03
2.0. Objectives 04
3.0. Company Profile 05
3.1. Founder Profile 06
3.2. Reliance Retail Ltd 06
4.0. The TOWS analysis 08
4.1. Strengths 08
4.2. Weaknesses 12
4.3. Opportunities 12
4.4. Threats 13
5.0. TOWS Matrix 14
6.0. Conclusion 14
1.0. Executive summary: -
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3. “Retailing is known to be the first point of customer contact”. Indian retail industry is very old,
that is the reason behind calling India a country of “Dukandaars”. In the last few years the
Indian Retail industry has grown by leaps and bounds. Big Indian and Foreign players have
entered the Indian market and some of them are planning to expand. The expansion is in the
terms of presence in different formats like Supermarket, Hypermarket, Discount and
Convenience Stores. The point of consideration is the working and performance of these
players in such formats.
In this report Reliance industries is taken as a sample and the TOWS analysis is done
after analyzing all the aspects of Reliance retail like Strengths, weaknesses, opportunities and
Threats. Here, endeavor is on the internal and external parametersas the strengths and
weaknesses are the internal factors and on the other hand the opportunities and weaknesses are
the external.
After analyzing all the aspects of TOWSanalysis I conclude that
the Reliance retail has more strength and is able to withstand with the competition and will able
to achieve its goal and objectives.
2.0. Objectives:
1. To understand Reliance retail Ltd.
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4. 2. To understand the Strengths, Weaknesses, Opportunities and Threats
3. To develop a TOWS matrix.
3.0. Company Profile:
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5. The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private
sector enterprise, with businesses in the energy and materials value chain. Group's annual
revenues are in excess of USD 27 billion. The flagship company, Reliance Industries Limited,
is a Fortune Global 500 company and is the largest private sector company in India.
Backward vertical integration has been the cornerstone of the evolution and growth of
Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward
vertical integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum
refining and oil and gas exploration and production - to be fully integrated along the materials
and energy value chain.
The Group's activities span exploration and production of oil and gas,
petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and
chemicals), textiles and retail. Reliance enjoys global leadership in its businesses; The Group
exports products in excess of USD 15 billion to more than 100 countries in the world. There are
more than 25,000 employees on the rolls of Group Companies. Major Group Companies are
Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and
Reliance Retail limited) and Reliance Industrial Infrastructure Limited.
3.1. Founder profile: -
quot;Growth has no limit at Reliance. I keep revising my vision. Only when you can dream it,
you can do it.quot;
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6. Dhirubhai H. Ambani
Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002
Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global
leader in the materials and energy value chain businesses.
3.2. Reliance Retail Limited: -
Reliance is gearing up to revolutionize the retailing industry in India. Towards this end,
Reliance is aggressively working on introducing a pan-India network of retail outlets in
multiple formats.
A world class shopping environment , state of art
technology, a seamless supply chain infrastructure , a host of
unique value-added services and above all, unmatched customer
experience, is what this initiative is all about.
The retail
initiative of Reliance will be without a parallel in size and spread
and make India proud. Ensuring better returns to Indian farmers
and manufacturers and greater value for the Indian consumer, both
in quality and quantity will be an integral feature of this project. By
Creating value at all levels, wewill actively endeavor to contribute to
India’s growth.
The project will boast of a seamless supply chain infrastructure, unprecedented even by world
standards. Through multiple formats and a wide range of categories, Reliance is aiming to
touch almost every Indian customer and supplier.
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7. Fig. The famous reliance retail wardrobe
4.0. The Threats-Opportunities-Weaknesses-Strengths (TOWS):
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8. The Threats-Opportunities-Weaknesses-Strengths (TOWS) is also named as SWOT analysis. A
TWOS Analysis is a strategic planning tool used to evaluate the Threats, Opportunities and
Strengths, Weaknesses, involved in a project or in a business venture or in any other situation
requiring a decision.
This is an important tool in order to formulate strategy. This Ma is an
trix
important matching tool that helps managers develops four types of strategies: SO Strategies
(strength-opportunities), WO Strategies (weakness- opportunities), ST Strategies (strength-
threats), and WT Strategies (weakness-threats).The mostdifficult part of TOWS matrix is to
match internal and external factor. Once the objective has been identified, TOWS are
discovered and listed. TOWS are defined precisely as follows:
» Strengths are attributes of the organization that are helpful to the achievement of the
objective.
» Weaknesses are attributes of the organization that are harmful to the achievement of
the objective.
» Opportunities are external conditions that are helpful to the achievement of the
objective.
» Threats are external conditions that are harmful to the achievement of the objective.
After analyzing all the aspects of Reliance retail the TOWS factors are
listed below and explained:
4.1. Strengths: The strengths of any organization lies in the different attributes that a
firm carries with itself and makes it a powerful standing in the market. Such attributes
of Reliance retail are discussed below:
a) Brand Equity: Reliance retail is a vertical of Reliance industries limited and one of the
leading firm in India. It is listed among the “Fortune 500 companies of world” by Forbes
magazine. A reliance industry Ltd apart from retail has many SBU’s (Strategic Business
Units). Starting with textiles in the late seventies, Reliance pursued a strategy of
backward vertical integration - in polyester, fiber intermediates, plastics, petrochemicals,
petroleum refining and oil and gas exploration and production - to be fully integrated
along the materials and energy value chain. So, the brand equity is one of its strength.
b) Good financial position: Reliance retail has a strong financial position in the market
because it is the only retail organization invested Rs.25000 Crores in retail. Apart from
that the Reliance industries Ltd the umbrella brand is the organization which is listed in
the “Fortune 500 companies” by Forbes magazine and the owner of Reliance industries
Ltd. Mr. Mukesh Dhirubhai Ambani” is among the richest peoples of India.
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9. c) Backward Integration: Reliance retail is among the few organizations which entered
Indian Retail sector with backward integration. Before discussing the aspect of backward
integration as per the Reliance Retail let’s discuss the concept of backward integration.
‘Seeking ownership or increased control of a
firm’s suppliers’ is backward integration. Both manufacturers and retailers purchase needed
materials from suppliers. Backward integration is a strategy of seeking ownership or increased
control of a firm's suppliers. This strategy can be especially appropriate when a firm's current
suppliers are unreliable, too costly, or cannot meet the firm's needs.
Reliance retail has conceptualized the concept of contract farming for their need of agricultural
products and for other identities like they have different SBU’s they are as follows:
Subsidiaries of Reliance retail Ltd Function
Reliance Dairy Foods Limited Producing dairy products under “Dairy
Pure” Label.
Reliance Integrated Agri Solutions Limited Producing Agri products under labels
‘Reliance Select and Value’.
Reliance Lifestyle Holdings Limited Producing Home furnishing products
under the ‘Home One’ Label.
Reliance F&B Services Limited Producing food and beverages under
the label ‘Reliance Select and Value’.
Reliance Food Processing Solutions Limited Producing processed food under
‘Reliance Select’ label.
The strategy of backward integration by Reliance retail endows it with much strength like:
» Minimizing the supplier’s power as explained in the ‘Michael Porter Five forces model.
» Able to meet the demand and supply.
» Reducing the cost of outsourcing.
d) Horizontal Integration: Reliance retail is among the few organizations which entered
Indian Retail sector with Horizontal integration. Before discussing the aspect of
Horizontal integration as per the Reliance Retail let’s discuss the concept of horizontal
integration.
‘Seeking ownership or increased control
over competitors. Horizontal integration refers to a strategy of seeking ownership of or
increased control over a firm's competitors. One of the most significant trends in strategic
management today is the increased use of horizontal integration as a growth strategy.
Mergers, acquisitions, and takeovers among competitors allow for increased economies
of scale and enhanced transfer of resources and competencies.
Before entering Indian market Reliance retail acquired ‘Adani
Retail’ a famous supermarket chain in Gujarat. Apart from that the multi-format presence
of Reliance fresh is also an example of horizontal integration. The different formats of
Reliance Retail are as follows:
Reliance Retail Limited Subsidiary of RIL
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10. Reliance Fresh Limited Subsidiary of Reliance Retail Limited
Retail Concepts and Services (India) Limited Subsidiary of Reliance Retail Limited
Reliance Retail Insurance Broking Limited Subsidiary of Reliance Retail Limited
Reliance Dairy Foods Limited Subsidiary of Reliance Retail Limited
Reliance Retail Finance Limited Subsidiary of Reliance Retail Limited
RESQ Limited Subsidiary of Reliance Retail Limited
Reliance digital Retail Limited Subsidiary of Reliance Retail Limited
Reliance Financial Distribution and Advisory Services Subsidiary of Reliance Retail Limited
Limited
Reliance Hypermarket Limited Subsidiary of Reliance Retail Limited
Reliance Retail Travel & Forex Services Limited Subsidiary of Reliance Retail Limited
Reliance Brands Limited Subsidiary of Reliance Retail Limited
Reliance Wellness Limited Subsidiary of Reliance Retail Limited
Reliance Footprint Limited Subsidiary of Reliance Retail Limited
Reliance Integrated Agri Solutions Limited Subsidiary of Reliance Retail Limited
Reliance Trends Limited Subsidiary of Reliance Retail Limited
Reliance Lifestyle Holdings Limited Subsidiary of Reliance Retail Limited
Reliance Universal Ventures Limited Subsidiary of Reliance Retail Limited
Reliance AutoZone Limited Subsidiary of Reliance Retail Limited
Strategic Manpower Solutions Limited Subsidiary of Reliance Retail Limited
Reliance Gems and Jewels Limited Subsidiary of Reliance Retail Limited
Delight Proteins Limited Subsidiary of Reliance Retail Limited
Reliance F&B Services Limited Subsidiary of Reliance Retail Limited
Reliance Agri Products Distribution Limited Subsidiary of Reliance Retail Limited
Reliance Leisures Limited Subsidiary of Reliance Retail Limited
Reliance Retail Securities and Broking Company Limited Subsidiary of Reliance Retail Limited
Reliance Home Store Limited Subsidiary of Reliance Retail Limited
Reliance Trade Services Centre Limited Subsidiary of Reliance Retail Limited
Reliance Food Processing Solutions Limited Subsidiary of Reliance Retail Limited
Reliance Supply Chain Solutions Limited Subsidiary of Reliance Retail Limited
Reliance Loyalty & Analylitics Limited Subsidiary of Reliance Retail Limited
Reliance Digital Media Limited Subsidiary of Reliance Retail Limited
Abcus Retail Private Limited Subsidiary of Reliance Retail Limited
Bigdeal Retail Private Limited Subsidiary of Reliance Retail Limited
Advantage Retail Private Limited Subsidiary of Reliance Retail Limited
Reliance Commercial Trading Private Limited Subsidiary of Reliance Retail Limited
This integration helping in following areas: -
» It helps in gaining increased economies of scale
» To gain composite market presence.
» It helps in Guerrilla warfare strategy.
» It helps in transfer of resources and competencies.
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11. » It helps in getting quantity discounts and hence reducing suppliers power.
e) Strong IT and Backend operations: In today’s world being functional is not important
the thing which is important is being efficient. The areas which make an organization
more efficient are the backend operations and usage of IT. Reliance retail Ltd entered
Indian market after doing a research for 2 Years. The backend operations are strengthen
by using specific interface of Information and technology. Reliance Fresh (the SBU of
Reliance retail) was the first retail firm to use SAP in retailing in India, it is an ERP
system helps in Warehouse, Vendor and Supply chain Management.Therefore making
backend operations more efficient.
The POS (Point of Sale) software which is used by reliance retail is
“RETALIX” it is one of the finest retail POS software worldwide and also used by many
global players.
f) Experienced Management team:
Reliance industries Ltd the umbrella company of Reliance industries Ltd. Is working in
Indian market from seventies have a team of experienced and qualified managers. There
are many examples which can be quoted to defend this statement. The examples are as
follows:
» Reliance retail entered Indian market with backward integration to reduce the cost
and suppliers dependency.
» Entered Indian market after a research and study of two years.
» When Reliance Fresh outlets are opposed by U.P. (Uttarpradesh) Govt. and were
being closed. The management reacted immediately and utilized the Space,
Distribution Centre for the other formats. For example Opening Reliance Jewel
store at Shopprix Mall; Sector-61; Noida.
4.2. Weaknesses: Weaknesses are attributes of the organization that are harmful to the
achievement of the objective. A weakness is a opposing forces to a company unable it
to achieve its goals and objectives. There is a quote that there is no success without
difficulties. The weaknesses are the areas which are developed to win because
sometime “Even dreaming for roses one has to through with the thorns’. I tried to find
as many as weaknesses I can collect and search but I am unable to find more than two
weaknesses. The weaknesses I am unable to understand are as follows:
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12. a) Multi-Format Presence: Presence of Reliance retail in horizontal integration is one
of the strength but same way it is weakness too. Having a big organization structure
increases following costs:
» Increase in the cost of operations.
» Increase in workforce management.
b) Presence at Prime Locations: Presence of Reliance retail at prime locations gives it
strength of visibility and awareness but the increasing realestate cost in India is
increasing the operating cost of Reliance retail store. Hence, reducing the profits
simultaneously.
c) Losses due to Joint ventures: Reliance retail has many joint ventures with the
foreign retail brands but due to the primecrisis in US market has slow down the
speed of expansions and new product offerings.
» Reliance Retail, Citibank tie up for consumer finance.
» Europe's Pearle tie up with Reliance Retail for optical products.
» Reliance Brands, a subsidiary of Reliance Retail, has entered into a 49:51 joint venture
with Italian fashion house, Sixty Group, to retail its brands in India.
4.3. Opportunities: Opportunities are external conditions that are helpful to the
achievement of the objective. Opportunities are the platforms where a firm can
perform and achieve its objectives and goals.
The opportunities in front of Reliance retail are as follows:
a) Growing retail market: Indian retail market is growing with a high speed Indian
market is heading the charts for the GRDI (Global Retail Development Index)as
per the AT Kearny. Indian Market is the most preferred market for retail
investments.
b) Increasing buying power of Indian consumers: the buying power of Indian
consumers is increasing. As per the research of Global Retailing 2006, IGD it is
around 414 US$ annually and it is increasing due to the increase in the number of
working women’s.
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13. c) Many Untapped Markets in India: There are many untapped markets which
are still waiting the entry of modern retailing. These areas include the Tier-2,
Tier-3 cities and rural India.
4.4. Threats: Threats are external conditions that are harmful to the achievement of the
objective. The threats involved in context to the Reliance retail are as follows:
a) Increasing competition: increasing competition due to the entry of many
national and global players (due to the entry of FDI). There are many players
like Pantaloons Retail, Aditya Birla group; Bharti, Tata, Subhiksha, RPG and
Shrilalmahal etc are some of the national players and some of the global players
like Wal-Mart, Metro, SPAR, Carrefour, and Woolworth etc.
b) Low Price Competition: It is facing Low-Price competition from players like
Subhiksha, Big-Bazaar etc because these store have low operating cost as
compared to reliance stores and are able to offer low price merchandise as
compared to Reliance.
c) Government restriction: Government restrictions on the concept of contract
farming in some states relicts the concept of backward integration opted by
Reliance retail. Apart from that entry of modern players in some of the states
and rural areas of India {Uttarpradesh (state)and Kerala (Rural)} hampering the
expansion plans of Reliance retail.
d) Increase in the operating costs: increase in the operating costs due to
increasing price of real estates, Sales tax and petrol directl increasing the
y
operating cost and hence a threat.
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14. 5.0. The TOWS matrix:
In this matrix only the related aspects ofTOWS are taken.
Strengths(S) Weaknesses(W)
1. Good Financial Position. 1. Multi-formats.
2. Backward Integration. 2. Prime location.
3. Experienced Mgmt.
4. Horizontal Integration.
Opportunities(O) SO WO
1. Untapped 1. Good Financial position 1. Multi-Formats.
Market (Expansion).
2. Increasing 2. Horizontal Integration 2. More sales.
buying power
Threats(T) ST WT
1. Increasing 1. Experienced Mgmt. and 1. Increasing
operating costs backward integration. operating costs.
2. Low price 2. Backward Integration 2. Low Price
competition and Good financial competition
position.
.
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15. 6.0. Conclusion: After analyzing all the aspects of TOWS analysis I conclude that the
Reliance retail has more strength and is able to withstand with the competition and will
able to achieve its goal and objectives.
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