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Reliance Power
Reliance Power
Reliance Power
Mission
• To attain global best practices and become a leading power generating company.
• To achieve excellence in project execution, quality, reliability, safety and operational
efficiency.
• To relentlessly pursue new opportunities, capitalizing on synergies in the power
generation sector.
• To consistently enhance our competitiveness and deliver profitable growth.
• To practice highest standards of corporate governance and be a financially sound
company.
• To be a responsible corporate citizen nurturing human values and concern for society.
• To improve the lives of local community in all our projects.
• To be a partner in nation building and contribute towards India’s economic growth.
• To promote a work culture that fosters learning, individual growth, team spirit and
creativity to overcome challenges and attain goals.
• To encourage ideas, talent and value systems and become the employer of choice.
• To earn the trust and confidence of all stakeholders, exceeding their expectations.
• To uphold the guiding principles of trust, integrity and transparency in all aspects of
interactions and dealings.
Vision
• To build a global enterprise for all our stakeholders
• To be the largest private sector power generation company in India
• To be the largest hydro power generation company in India
• To be the largest green power company in India
• To be the largest coal mining company in India
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Reliance Power
Strategy
Reduction of Cost of Power Generation
We intend to continue our focus on reducing the cost of power generation by acquiring and
developing captive fuel sources that will insulate us from the volatility in the market price of fuel
and can thus leverage our operating efficiencies. Such a move is pursuing economies of scale,
securing favorable financing and sharing resources among our various power projects and with
our affiliates.
SWOT ANALYSIS
Strength:-
Weakness:-
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Reliance Power
• Reliance dynamic approach with creating “total consumer experience” could
complicate the process
Opportunities:-
• Setting up largest thermal plant in Orissa , which has huge deposits of Coal
Reserves.
Threats:-
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Reliance Power
Political Forces:
The Government of India has a mission of “Power to all” by 2012. Government is having very
ambitious plans for increasing the capacity of the power sector and hence is encouraging power
sector companies like RPower.
Economic Factors
India is in the rising phase of its economy curve, the economy of the country was growing at 9 %
before it is affected by recession in 2008. Even during recession also it managed to touch 7.9%
while developed countries suffering from negative growth. The per capita consumption is
expected to increase 1000 KWH. So, this provides huge opportunity for Reliance Power
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Reliance Power
Socio cultural factors
With a population of India increasing and the scenario of the country is changing from survival
to consumption mode, the demand for electricity continue to be on increase. As a result of which
power generation sector promises increasing returns to those who have already positioned
themselves strongly in this sector
Technological factors:
The operational efficiency of a thermal power plant is only 30% that is very poor Also, the
advantages of low installation cost is disserted with the invention of nuclear power.
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Reliance Power
With the government deregulation there is always a threat of new entrants into the market.
Reliance power and other companies in the power sector always face the threat and as such they
have to prepare themselves for the competition against the new entrants.
Reliance power has competition against already established players like NTPC, Tata, Jindal,
Adani NHPC, Jaiprakash Power Ventures Ltd, etc . So the company has to prepare itself for
competition against them. The company should formulate its strategy in a way that it minimizes
its costs and quotes less price for the different bids.
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Reliance Power
The generators, solar energy are the main substitutes for the electricity. The company has to
formulate its strategy accordingly.
This factor does not affect the company a lot because the company supplies electricity in a
particular area and there is no other player in the same area, so the buyers cannot bargain.
The bargaining power of sellers which include suppliers of coal, technology, manpower has a
impact on reliance power and they should formulate their strategy accordingly.
Market Growth
Low
Dogs(SBU’s) Cash cows
Low
Market Share
High
Reliance power comes in the category of question mark as they have a low market share and the
market growth is very high.
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Reliance Power
• Low costs
• Good profits
• Large-scale capacity
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Reliance Power
A value chain is a chain of activities for a firm operating in a specific industry. The business unit
is the appropriate level for construction of a value chain, not the divisional level or corporate
level. Products pass through all activities of the chain in order, and at each activity the product
gains some value. The chain of activities gives the products more added value than the sum of
added values of all activities. It is important not to mix the concept of the value chain with the
costs occurring throughout the activities.
Reliance Power Plans to span over entire value chain in the power business.
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Reliance Power
Generation of power
Transmission of power
Distribution of power
Trading of power
Generation of power
Transmission Utilities :
Distribution Utilities
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Reliance Power
Ultimate Consumer
Agricultural Consumers
Industrial Consumers
Retail Consumers
Supporting Activities
Acquired 3 coal mines from Sugico Group, Indonesia with capacity to generate
10 GW in 2010
Large reserves
Strengths
An aid to overcome
S 1: Huge Capacity generation in
.10 4.0 competitor’s threat
0.40
pipeline
.10 3.5 Will attract potential
0.35 investors
S2: Growth in EPC division
.25 3.0 0.75 Creation of goodwill
S3: Established and good
Image
.10 4.0 0.4 A reliable Company
S4: Reliance – Long term
Investment
.05 0.15 A preference factor for
3.0
S5: BSES – part of Reliance customers
.05 3.0 An aid to overcome
S6: Strategically Located 0.15
competitors
Power Projects
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Reliance Power
Weaknesses
W1: Effect on balance sheet due 0.10 3.5 0.35 Threat of having not
adequate working
to funding of new project
capital
W2: Distribution- something new Threat of potential
0.10 3.0 0.30
losses
for Reliance.
Threat of losing
W3: Reliance dynamic 0.10 3.5 0.35 potential customers
approach with creating
“total consumer
experience” could
0.05 3.0 0.15 Threat of not
complicate the process
completing the project
W4: Financing Dadri project on time
a big liability
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Reliance Power
Opportunities
Threats
T1: Any delay in project Need to quickly
0.05 3.5 0.175 implement the projects
implementation.
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Reliance Power
T2: Increase in interest rate. 0.10 3.0 0.3 Need to find cheaper
sources of finance
T3: Other players in the 0.05 3.5 0.175
Need to decrease costs
market, like Tata to outplay their
competitors
T4: Future plans depend on
0.05 3.0 0.15 Need to maintain good
government policy amicable relationship
with the government
T5: Dealing with state
Lower costs of
regulators who 0.10 3.75 0.375 operations to absorb
their bargaining
determine tariff rates
powers
T6: Remote possibility Need to have alternate
0.05 2.25 0.1375 strategies
opportunities back
firing
T3: Other players in the market, like Tata 0.07 2.5 0.175
TOWS MATRIX
SO
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Reliance Power
It reflects how strengths can be used to take advantage of opportunities. Reliance power has a
established and good image, therefore it can skim the huge scope in power sector.
WO
It implies how you overcome your weaknesses to take advantage of your opportunities. The
distribution which is something new for the company can be used to cover and reach the places
where there is no electricity, therefore distribution opportunities arise.
ST
It implies how the strengths can be used to overcome threats. The strategically located power
projects of the reliance power can be used to deal with the threats of the other players in the
market like Tata Power etc.
WT
It implies you overcome your weaknesses to avoid threats. The financing of the Dadri project
which is a big liability should be prevailed over to tackle any delay in the implementation of
other projects.
TOWS MATRIX
ROLE OF STRATEGY
Every company on a small level with very low risk or a multinational company with much more
to lose than just money on the line has to have a strategy to make its name in the world with
other companies in mind. Strategy is as important in an organization like walking for a human.
Behind every successful organization there is a strategy.
“It may be hard for an egg to turn into a bird: it would be a jolly sight harder for it to learn to
fly while remaining an egg. We are like eggs at present. And you cannot go on indefinitely being
just an ordinary, decent egg. We must be hatched or go bad.”-C.S.Lewis
The idea from above statement says in strategy you cannot just attempt something that you
have to or will do just like that you need to take small and control in sometimes brave steps to
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Reliance Power
achieve what you desire and have to be patient because in planned strategy to work time is your
biggest friend and sometimes the worst enemy. Sometime it takes years to be where you want
your organization to stand.
In a competitive business environment you have to realize the brutal facts of Market
environment, Financial and Economic conditions. You need to ask yourself the hard questions
before making a strategic plan weather it can be achieved or not and have to make sub small
plans those will help you. You have to think of the value added to the organization after the
completion of your strategy.
CONCLUSION
After completing this assignment, which was more of a research, I came to a conclusion that in
any business, successful or a newly established, if not managed well and unable to take
advantage of its opportunities can come to its knees. So for a business to run successfully we
have to manage its Competitors and threats that may affect the performance of a business. The
power generation and transmission industry, being Reliance Power’s most significant market
area, continues to undergo significant changes as more users in growth markets gain access to
power generation, the importance of end-to-end solutions increases and technology continues to
evolve. Another trend is an increased emphasis on the role of distribution of power. These
changes have demanded agility and flexibility from industry players to adapt to new market
conditions rapidly. Thus, Reliance Power aims at capitalizing on efficiency and its skill in
execution as well as demand supply chain management to respond to these requirements.
REFERENCES
• www.google.com
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Reliance Power
• www.wikipedia.com
• www.reliancepower.co.in
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