Reliance Industries PESTLE Analysis

Published in Companies category by MBA Skool Team

Reliance Industries PESTLE (or PESTEL) Analysis assesses the brand on its business tactics across various parameters. PESTLE Analysis of Reliance Industries examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Let us start the Reliance Industries PESTLE Analysis:

Political Factors:

The political factors in the Reliance Industries PESTLE Analysis can be explained as follows:

Reliance Industries Limited is the biggest Indian conglomerate. Its business is varied in multiple sectors including telecom, power, retail, cash and carry, petroleum, fashion, mobile etc. Political stability is essential for flow of raw materials and to maintain best in class supply chain efficiency. With political instability the laws change more frequently. It becomes difficult for Reliance Industries to adjust to such frequent law changes considering the massive size of business. Also, the countries in which Reliance Industries has setup its product base in the form of supermarket, product development etc.

should not be prone to military invasion. The government laws related to contract, taxation, intellectual property protection is necessary to be in place. Some of the laws that are launched to promote the telecom sector like the unified access services scheme and 100% foreign direct investment in some of the business fragments that Reliance Industries operates in helps to scale the business profitably. Level of government intervention in free market and capital goods is also a decisive political factor.

Image: company website

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Reliance Industries:

There are multiple economic factors that impact business of Reliance Industries Limited. Inflation rate in the country decides as to buying capacity of the public in the market.

Too high inflation rate is not preferred for business to be profitable because then the raw material procurement becomes costly resulting in rise in the final product. High interest rates are bad for both business and the customer. Business like Reliance Industries take up loan from various banks to support their financials over the year and the customer to buy high end quality products takes up loans. But when the interest rates shoot up both the level of production and buying strength hampers. The stability in the economic market and exchange rates is important factor to grow the business at desired pace. GDP of the country reflects how the business is going to grow in future.

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Social Factors:

Following are the social factors impacting Reliance Industries PESTLE Analysis:

This 21st century has seen tremendous increase in the spending power of consumer. That has led to business like Reliance Industries to give a large variety of product base with both extreme end of pricing. People these days are society conscious and thus they are inclined towards fashionable brands in apparel, technology fields. Internet these days has become a necessity. Providing the most accessible, reliable and affordable internet was the opportunity that Reliance Industries fetched via Jio product launch. The economic class distribution in that respective area needs to be taken care of. There is no point in promoting premium product to the public who do not have the capability to pay for it. The public these days is more aware of the hazardous effects of consumables on their health as well as on environment.

Technological Factors:

The technological factors in the PESTLE Analysis of Reliance Industries are mentioned below:

Technology is ever changing. The involvement of technology is effective in every business of Reliance Industries limited. Be it retail and the improved ERP functioning, advance social media marketing or be it advancements in telecom sector like 5G network and fibrenet broadband. The operations and supply chain are getting disrupted with advanced technology.

The huge cash and carry stores of Reliance Industries have robots and machine in place to move huge and heavy chunk of material.

Following are the legal factors in the Reliance Industries PESTLE Analysis:

There are strict laws that govern Reliance Industries’ business in every field. Labor laws which protect basic rights of every labor including minimum wages are to be aligned with the company’s legal framework. Environment protection laws for the manufacturing units and their industrial waste disposal standards govern their overall activity. Contract laws, corporate laws and their adherence with company’s rules is mandatory. There is separate legal team which looks after all kinds of laws which are to be aligned and incorporated in their business. Health and safety laws are strict these days since along with the government the public is also becoming conscious about consumables content and quality.

Environmental Factors:

In the Reliance Industries PESTLE Analysis, the environmental elements affecting its business are as below:

Reliance Industries Limited has diverse business. But each of those businesses, be it petroleum, fashion retail outlet, agricultural products, foot ware have to be monitored in terms of its environmental factors. The emissions that are given out into the air has to be regulated under the norms prescribed by the government. Excess of carbon emissions add to the ozone layer depletion and resulting in global warming in the world. The plastic waste generated cannot be dumped in the water bodies.

All of India is running ‘Swatch Bharat Abhyan’ where in the cleanliness of India is restored back to its original state. The carbon footprints generated by the company are to be minimized as much as possible. There are laws which protect animal life from being killed for business purpose.

To conclude, the above Reliance Industries PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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