A case study on dhirubhai ambani and reliance

A case study on

Dhirubhai ambani and Reliance

Introduction of the team members

Sai kumar chinthaDebojyoti ChattopadhyayDipayan goswamiBhaskar Abhishek dubeyAishwaryaAshokDinesh prabhuBasavarajVamsiB.Md. ShahidJagadishAnsar

FAMILY OF DHIRUBHAI AMBANI

INTRODUCTIONDhirubhai Ambani was born on December 28, 1932, to Hirachand Govardhandas Ambani and Jamunaben Hirachand Ambani. He was middle of five children, three boys and two girls. He passed his matriculation in1949, Dhirubhai left for Aden (Yemen) at age of seventeen. His first job was to collect money at a Shell Petrol Station, earning three hundred per month. After a few years, he rose to the position of Sales Manager in the same company. After working eight years in Yemen, he decided to come back to India and on December 31, 1958, he came back to Mumbai and he started the RELIANCE COMMERCIAL CORPORATION (RCC) with a borrowed capital of Rs.15000. RCC mainly involved into the export of ginger, pepper, turmeric, cashewnut etc. using his connections in Yemen, he exported the materials to the same place.

Building of Reliance Dhirubhai Ambani, a successful businessman, was born on December 28, 1932 to his father Hirachand Govardhandas and his mother Jamunaben Hirachand Ambani.After his matriculation in 1949, Dhirubhai left India and he got his steps at Yemen where he used fill gas at a named gas station SHELL petrol station. This job was very beginning for the great businessman. He earned only an amount of Rs.300 per month. But his devotion to the complete job soon rose him up to the position of Sales Manager in the same company.Going through and crossing all the huddles of the life in Yemen, Dhirubhai Ambani now wanted to return to India and start something of his own.

On December 31, 1958, he came back to Mumbai and incorporated the Reliance Commercial Corporation which is abbreviated as RCC.This company was incorporated with a capital of Rs.15000 which was also a borrowed capital.This company was mainly associated with exporting the commodities like ginger, cardamom, pepper, turmeric and cashewnut. He also initiated the wide range of exports and mainly to Yemen because he had a lots of connections to that place.Yemen was a center of attractions for the exports because of Yemen being the free port. Under the export promotion schemes that were laid down by Indian Government also helped RCC to start the trade in Rayon Fabrics.

Such a scheme by the Indian Government attracted the attention of the growing businessman. He then switched from the spices to textiles.In the year of 1966, he started a spinning mill at Naroda, Ahmedabad with a borrowed capital of Rs.2,80,000 and named it as Reliance Textile Industries.The scheme of Government of India, benefited RCC the most and its export constituted 60% of the exports under this scheme. There were rumors that the scheme was totally designed and initiated for Dhirubhai Ambani and to support his companies. But to protect this hoax, Dhirubhai came as a shield who stated that no one can blame that Reliance was only the company which was benefited by the scheme, there were many competitors who shut their eyes and were sitting those days.

The High Unit Value Scheme ended in 1978. For this Dhirubhai laid his focus to the domestic market.Till that time Reliance Textiles was not doing much in the market but Dhirubhai Ambani wanted to establish VIMAL brand in the market and trade it. This was that brand under which Reliance traded its fabrics.He came up with all the marketing plans and strategies to help support the sale of fabrics in Indian markets.As a part of the business strategy, Dhirubhai knew, that it is essential to grab the consumers confidence prior to sell the fabrics in the market. Thus they emphasized on the quality and focused to make the quality of every brand superior.

As the part of the marketing strategies, he framed the distribution channels as the existing marketing channels were inefficient and inadequate. It was not easy for Reliance to grab the market. It faced a lot of competition from the traditional merchants also. Dhirubhai, to exist in the cut-throat competition, shifted his eagle eye view from the traditional way to showroom distributions. This was another strategy to pierce the market and stuff his products.Somewhere Dhirubhai, adopted the concept of Bombay Dyeing, and implemented it on his business. He travelled the entire country to offer the franchises to share holders.

This searching resulted in the discovery of non-metro urban segment. By 1980, Reliance fabrics were almost available throughout India.20 companies owned retail outlets, 1000 franchised outlets, and over 20,000 retail stores.Thus the overall market for the Reliance started too boom. The advertisements styles, marketing strategies have also changed since the period of Dhirubhai Ambani. This was a step that the biggest businessman took to make his business flourish all over the world. He has made a sensation of building Entrepreneurs until todays dynamic scenario. He has helped in the increments of Indian economy as his business contributed 5% to Gross Domestic Product (GDP).

THE ADVERTISEMENT FOR VIMAL

Background integrationTo strengthen his position further, Dhirubhai decided to integrate backwards and produce fibers.He planned to setup a polyester filament yarn (PFY) manufacturing plant at patalganga and he started work on plant in 1981.The technology for the production of PFY was sourced from USAs DU POINT DE NEMOURS.

In 1984, Dhirubhai got license to manufacture purified terephthalic acid (PTA).In 1991, Dhirubhai embarked on his most cherished project at Hazira (Gujarat)-to build the largest single multi-feed ethylene cracker plant in the world.In 1999 refinery plant commissioned at Jamnagar and it is the world largest refinery with a capacity of 27 million tonnes per annum, was the Single largest investment ever made at a single location in India.

STock market adventureDhirubhais biggest contribution to the nation was the development of an equity culture.Reliance went public in1977 and had its first A.G.M in 1977In the first seven public share issues, minimum subscription level was exceeded.Reliance industries had 58000 investors in 1997. Reliance holds the record for bringing out the single largest domestic issue of more than Rs.21 billion convertible bonds for Reliance petroleum in 1993.

The market capitalization of Reliance was 1.2 billion in 1995 making Dhirubhai richest men in the world.In 1982 issue generated Rs.500 million, it was the biggest issue in those days, Dhirubhai faced threat from a Calcutta based bear syndicate sold 1.1 million Reliance shares worth of Rs.160 million on march 18, 1982. On may 10th, the crisis ended and finally Dhirubhai succeeded in taming the bulls.

Corporate battles of Dhirubhai ambaniThe fight between Nusli wadia, the Bombay dyeing chief and Dhirubhai is well known in business circles.During the Janata party rule (1977-1979), Nusli wadia obtain permission to build a 60000 tpa di-methyl terephthalate (DMT) plant. However, before his letter converted in to license, GOVT was changed and his license was delayed.At that time Dhirubhai obtain license and also contemplating on building a paraxylene facility this infuriated Nusli wadia and marked the beginning of one of the major battles in history of Indian business.

In 1980s Ramnath Goenka proprietor of Indian express group which was in to news publication, tried to act as a mediator to solve the conflict between two corporate giants.In the late 1980s, Larsen and Toubro ltd (L&T) chairman N.M.DESAI, discovering that Manu Chhabra (right) had acquired a stake in the firm, presumably to launch a hostile bid, gotreliance industries ltd.'s (RIL).

Political battles of Dhirubhai ambaniHe maintained good relations with Mrs. Indira Gandhi and obtain several licenses & permissions during her primeministership.However, after her assassination in 1984, her son Rajiv Gandhi became prime minister and things changed and in may 1985, vishwanath pratap Singh (V.P.Singh), finance minister in Rajiv Gandhis cabinet.They decided to shift P.T.A imports from OGL category to limited permissible list.

This could be new problem for Reliance and by sniffed the news about the imminent change Dhirubhai moved very fast and on between may 27th-29th he tied up with a host banks like S.B.I, canara bank etc., To issue LCs for all most a year supply of PTA of APX 60000 tonnes worth of 1.1 billion and last LC was opened just before the GOVT announced the change in the policy.In 1986 quite favorable to Reliance and a secret meeting held between Rajiv and Dhirubhai and cleared all pending licenses & customs on PTA Rs.3 per KG was abolished.

Death of an iconDhirubhai Ambhani was admitted to the breach candy hospital on 24th June 2002 after he suffered a major stroke, this was his second stroke. First one had occurred in February 1986 and had kept his right hand paralyzed. state of coma for more than a week.The founder and chairman of the Reliance group of industries Dhirajlal Hirachand Ambani died after a 13 days battle for survival

The 6th of July 2002 was a black day in the Indian corporate history. As mark of respect, the Mumbai textile merchants' decided to keep the market closed on July 8, 2002.He played his efficient role in the transformation of the Reliance from a company with a turnover of 640 million in 1976, to one with a turnover of 620 billion in 2002.He began his entrepreneurial journey incorporating a small textile mill in Naroda and he took Reliance into various areas like petrochemicals, polyester filament yarn, oil and gas exploration etc.,

He never followed text book style of management. Instead, he evolved a unique style, which was the great combination of the developed American style of entrepreneurship, with the Japanese focus on the latest technology. And finally Dhirubhai started reliance at a time when most companies in India were owned by the government.

Reliance with out DhirubhaiAfter the death of Dhirubhai on 6th July 2002 , the Reliance group was take over by Mukesh and Anil Ambani with a turnover ofRs.620 billion , assets worth Rs.564.85 billion, and work force of over 85,000 people accounted for 5% of total revenue of GOVT & contribute 3% of GDP, 5% of total exports & 25% of India's total private sectors profit.By 2004, it plans to take over more than 35% of global market and this would make Reliance the 11th largest polymer producer and in 2016 2nd largest polymer producer in the world.According to the global fortune 500 ranking Reliance ranks 158 with revenue of 62 billion in 2015.

Dhirubhai provided to his sons with a strategic vision and his sons always considered themselves as co-builders rather than inheritors of Reliance after his demise, Mukesh was appointed as chairman and MD of the Reliance group while Anil become the vise-chairman.In 2004, Mukesh Ambani, admitted to having difference with his brother Anil over ownership issues.On June 2005, Kokilaben Ambani (mother of Mukesh & Anil) announced the settlement through a press release.

Reliance empire was split between the Ambani brothers for Mukesh: RIL, IPCL and Anil :Reliance capital, Reliance energy and Reliance infocomm.Mukesh become 1st Trillionaire of India and richest man in Asia with a Net Worth of 22.9 USD billion as per Forbes and recently on 5th sept 2016 he launched Reliance JIO which is subsidiary of RIL.More over in addition to the all above information, Dhirubhai was also admired by todays film industry and his role was enacted by famous Aishwarya Rai Bachhan and Abhishek Bachhan in the film GURU.

conclusionFor those who dare to dream there is a whole world to win.As Dhirubhai Ambani returned from Yemen to India and started Majin in partnership with Damini, his cousin.He started to import polyester yarn and export spices and sugar products to Yemen.He started his first office of reliance commercial corporation was set up at Narsinatha street in masjid bunder.Ambanis great achievement was he showed Indians what was possible.With no Oxford Or Yele degree and no family support, no capital.

A SMALL VIDEO ON DHIRUBHAI AMBANI

Thank you"Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our efforts greater. This is my dream for Reliance and for India.

- DHIRUBHAI AMBANI