A Success Story of Reliance Infocomm in a Mature Market

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  • Topic: Reliance Anil Dhirubhai Ambani Group, Dhirubhai Ambani, Anil Ambani
  • Pages : 8 (2477 words )
  • Download(s) : 132
  • Published : July 9, 2008
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1. INTRODUCTION

What kind of a company enters an industry with competitors already entrenched? Which ones actually succeed? The answer to both the questions is Reliance Infocomm now known as Reliance Communication. Reliance Infocomm is a confident and smart company that was able to enter a saturated and highly competitive industry, and emerge at the top. The cut-throat competition in the telecommunication sector of India posed a great threat to the development of Reliance Infocomm. Many other cellular service providers who tried to enter the market have failed miserably. So, what helped Reliance Infocomm in emerging at the top? How did it manage to compete in the industry though it entered late in the race?

This paper tries to offer the answers to the above questions. It discusses the innovative strategies adopted by Reliance Infocomm to revolutionize telecommunication in India. Specifically the paper takes a look at the new exemplars in cost competence, marketing and organization development which helped Reliance Infocomm to reduce costs and increase volumes. The first part of the paper discusses the scale and complexity involved in shaping the Reliance Infocomm vision into reality. The second part looks at the cost strategies adopted by the company, while the third part looks at the steps taken by the organization to lay its foundation and expand into various fields of telecommunication. 2. HISTORY

Dhirubhai Ambani (1932-2002) started the Reliance Commercial Corporation in a 350 Sq. Ft. room with a telephone, one table and three chairs. The primary business of Reliance Commercial Corporation was to import polyester yarn and export spices. He started his first textile mill at Naroda, in Ahmedabad in the year 1966 (The Origin Of 2007) . After success in the textile industry Reliance slowly ventured into petroleum, petrochemicals, energy, finance, engineering and telecommunication sectors. Reliance was the first Indian company to be listed in the Fortune Global 500 list in 2003. RIL emerged featured in the 2007 Fortune Global 500 list of the world's largest corporations at rank 269 (500 2007) .

Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999. He saw that information technology had the capacity to accelerate the growth of Indian economy leaving behind its backwardness and underdevelopment. From 1999 to 2002 Reliance Infocomm built the fiber backbone for India — 60,000 kilometers of fiber optic spreading across the entire country. Reliance Infocomm was started on December 28, 2002 (Communications, Reliance Communications 2006) .

After the death of Dirubhai Ambani, there was a rift between his sons, Mukesh and Anil Ambani. Finally the company was split between the two brothers. Anil Ambani acquired Reliance Infocomm, which is now known as Reliance Communications. Reliance Communication is now a part of Anil Dhirubhai Ambani Group (ADAG).

3. THE DREAM, VISION & MISSION

3.1 THE DREAM

The Late Dhirubhai Ambani had a dream of a digital India, an India where the common man would have access to affordable means of information and communication. He was of the view that if a telephone call could be made cheaper than a postcard, it would transform every home, empower every Indian, remove every obstacle to opportunity and growth, and tear apart every barrier that divides Indian society. Dhirubhai had stated: “Make the tools of information and communication available to people at an affordable cost. They will overcome the handicaps of illiteracy and lack of mobility” (Ambani 1999) . He was convinced that infocomm could create new paradigms in enterprise, entrepreneurship and engagement. True to his conviction, Reliance Communications is committed to transform Dhirubhai’s dream into a reality. It was his dream that every Indian has at least one cellular phone.

3.2 THE VISION

The vision of the company is as follows:

We will leverage our strengths to execute complex...
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