Reliance Industries Limited Business Environment Analysis

cartel Industries Limited Business Environment AnalysisBusiness environs is the constraints and opportunities that surround our businesses. This is about exploring the nature of the business in which it is being carried out.The abstract in this essay will be on business milieu in which Reliance Industries Limited ope stride.Reliance Industries Limited or RIL is unremarkably known as Reliance. The social club was founded by Shri. Dhirubhai H. Ambani in 1977 the comp each was ab initio started as a textile union and led its evolution as a world leader in materials and the energy value d grossing stringThe Companys operations washstand be classified into four segments namelypetroleum Refining and Marketing businessPetrochemicals businessOil and Gas geographic expedition Production businessOthersThere are ii types of business environment INTERNAL and EXTERNAL environmentBefore coming on to the orthogonal forces, the internal forces should be made clear.The internal force s are those forces which are controlled by the plaque itself much(prenominal) as the resources knowledge and decision makingReliance in the above context has a wide variety of resources such as intumesce qualified employees and infrastructureAs far as knowledge and decision making is concerned Because Reliance recruits very well qualified somebodys thereby it reflects when it comes to the decision making process of the company outside(a) business environment comp springs of Political, Economic, soci sufficient and Technological work outs. These factors can permit appositional as well as a negative impact on the company. There are two types of external business environment i.e. micro and macroExternal micro factors are companys suppliers, transporters, agents, distributers, and wholesalers.External macro factors comprises of Political, Economic, mixer and Technological factors.The external micro factors can be influenced by the organisation whereas macro factors cannot be inf luenced by the organisationPolypropylene market in IndiaOver the past forty years polypropylene growth has exceeded that of opposite major p fitics and has become the largest good deal commodity resin. Throughout the history of PP by dint of research efforts of various companies, PP has continued to rapidly evolve with unused extension of catalyst and post reactor technology. Because of the services made to process and application technology, this polymer has passing-developed into unrivaled of the cost- telling bulk thermoplastic. Polypropylene is the worlds fastest growing polymer with an total growth rate of about 7-8%.It is very important for a company to understand and try to manage the external micro factors i.e. plague forces as discussed above(P)OLITICAL FACTORSPolitical factors include government policies relating to the industry, tax policies, laws and regulations, trade restrictions and tariffs and so on As in any burst of the world, political influence is hig hly essential to start a business in India. Especially if you are planning to start a multi-billion business, some sort of political shop at is an absolute necessity. Not only for safeguarding the engross of the company but til now to begin the process of getting the required sanctions, one requires hold in the high echelons of politics and administrative circles.Reliance industries also hold a high echelon of political and administrative circles so as to safeguard the interest of a company and for getting the required sanctions.(E)CONOMICAL FACTORSThe economic factors relate to changes in the wider economy such as economic growth, interest rates, exchange rates and inflation rate, etc. These factors comprise of Government intervention in the cede market, infrastructure quality, economic growth rate, availability of labour, wage rate of labour.(S)OCIAL FACTORSSocial factors often look at the cultural aspects and include wellness consciousness, people growth rate, age distributi on, changes in tastes and buying patterns, etc.Safety of a person overrides all the production targets is the wellness, Safety and Environment Policy of Reliance.occupational Health Centres (OHCs) welcome been established to provide education on health and awareness issues, diagnostic camps and health exhibitions are also arranged. RIL also offers hourly medical examination of all the employees (including Contractors employees) along with their family members. In case of any hospitalisation RIL employees are supported by consistent co-operation and cashless hospitalisation creature comforts from one corner of a country to another. The company also provides amply equipped hospitals in all its major townships. The company also helps give birth Periodic potable weewee sampling depth psychology and health audits for the canteens and guest houses.A new initiative was launched by RIL called (CASHe) programme i.e. Change Agents for Safety, Health workplace Environment. This initia tive was launched to promote healthy workplaces and reduce health and asylum risks. It has also facilitated the Syndicate to advance its enactment on the occupational health and safety front.The companys long term objective is to address all environmental initiatives as they want to become more positive about water conservation, carbon neutral and conduct the maximum possible recycling and utilize of wastes. The company has further been reinforced in context of companys management fabric with roles responsibilities, group standards and defined structures.RILs Patlganga plant has changed over to use of a unspotted fuel. This resulted in substantial reduction of suspended particulate substance and south dioxide releases in the air.RIL has indoctrinated a practice to be in coordination with nature and in this circumstance, afforestation, upkeep of green belts and promoting lush green surroundings as they have decided to planted around 1,00,000 plants at the OT, gardens, vermin-com post of waste and its use as manure, they also reuse treated water for horticulture activities as a routine.(T)ECHNOLOGICAL FACTORSThe proficient factors relate to the application of new inventions and ideas such as RD activity, automation, technology incentives and the rate of technological change.RIL has always laid emphasis on RD, technology organic evolution and variety. The credence Group (RTG) undergoes various research and technology functions which help them germinate im call downd value supply by supplement all the abilities, and creating new prospects at the interfaces.At the time of recession also RIL did not eventide step back their zeal to innovate helped them convert the adversity into an opportunity. The company launched a ground-breaking initiative called mission kurukshetra which was aimed at emerging the organisation to rise to the occasion and also help the company to emerge stronger.This initiative not only helped in combatting the challenges with a win bu t also determine serial ideators the enterprise facilitated them by rewarding them for their leadershiphip. The Leading Expert approaching Programme (LEAP). The people at RIL are inspired by leaders and also provide them access to global thought.The RIL draws an agenda on innovation with the help of The Reliance Innovation Leadership Centre (RILC) which helps the company to taking into custody amongst one of the most innovative companies in the world. RIL continues its journey to make improvement a way of life and want to confirm that the growth of the succeeding(prenominal) generation are led by innovation.Advantages of PEST digestPEST analysis is an effective and efficient tool, which provides a framework to an organisation for effective decision making. By making effective use of PEST analysis, one can ensure affirmative orientation of the business organisation. PEST analysis also helps an organisation in avoiding decisions which should not be taken. PEST analysis helps in making lawful decisions for the companies which are willing to enter into a new market.Disadvantages of PEST analysisPEST analysis considers only the external business factors, but in reality all the factors should be considered in order to make effective decisions for an organisation. Most of the data gathered by this analysis is based on assumptions, which sometimes may not prove to be fruitful for an organisation. The rapid changes in the world economy can also make it difficult in analysing PEST factors for an organisation.Another factor which comes under consideration is the SWOT analysis of the company SWOT stands for strengths flunk opportunities and threats.RILs SWOT analysis is as follows(S)TRENGTHSConsolidationsThere are only two main players of in petrochemicals and a solid consolidation has been seen in last few years as 85% of polymer capacity is with these companies namely reliance and haldia(W)EAKNESSLow bargaining power from the suppliersThe input prices form nearl y 50-60% of the raw material costs. Reliance being a petrochemical player does not have much of a negotiating power counter to the suppliers. Therefore they always dwell unprotected to the prices of the raw material.Low bargaining to from the customersAs there is an outgrowth in the input cost therefore the companies are not able to offer any price reductions or bargains to the customers.(O)PPORTUNITIESLow per capita incomeCurrently, domestic per person polymer consumption is nearly 4 kgs while if we see the global medium it is nearly 20 kgs. This tells the fact that there is huge scope of volume expansion in INDIA as the market to be selected is very massive.therefore there is a massive scope of product development. Also, currently, India has a chemicals trade shortfall of about US$ 1.5 bn a year, which leaves enough investment opportunities in the industry.(T)hreats tradition dutiesThe polymer industry has a protection from overseas competition by leveraging high import duties imposed by the government. However, of late, Import duty on polymers has been steadily reduced and is currently at 20%. As part of its commitment to various multilateral and bilateral trade agreements, the government is credibly to reduce duties.