Strategic Management Coursework: Reliance Fresh and Amazon Comparison

This report provides a comprehensive analysis of strategic management concepts and practices, focusing on the retail and e-commerce sectors in India. The study compares two major players: Reliance Fresh and Amazon. The analysis utilizes several strategic tools, including SWOT analysis, PESTLE analysis, and Porter's Five Forces framework, to evaluate the internal and external factors influencing these companies. The report examines the strengths, weaknesses, opportunities, and threats (SWOT) of each company, along with the political, economic, social, technological, legal, and environmental (PESTLE) factors affecting their operations. Furthermore, it assesses the competitive environment using Porter's Five Forces, examining the threat of new entrants, the threat of competitors, the bargaining power of buyers and suppliers, and the threat of substitutes. Through this comparative analysis, the report aims to provide insights into the strategic decisions and challenges faced by Reliance Fresh and Amazon, culminating in a critical analysis of their respective business environments and concluding with recommendations for strategic improvement. The report is a student contribution for Desklib, a platform offering AI-based study tools.

Strategic Management

STRATEGIC MANAGEMENT 1
Contents
Introduction.................................................................................................................................................2
Background.................................................................................................................................................2
Strategic Management Concepts.................................................................................................................4
SWOT Analysis.......................................................................................................................................4
PESTLE Analysis....................................................................................................................................5
Porters Five Forces Framework...............................................................................................................6
Application of theories in Retail Industry vs ecommerce............................................................................7
Reliance Fresh.........................................................................................................................................7
SWOT Analysis...................................................................................................................................7
PESTLE Analysis................................................................................................................................9
Porters Five Forces Framework.........................................................................................................10
Amazon.................................................................................................................................................11
SWOT Analysis.................................................................................................................................11
PESTLE Analysis..............................................................................................................................13
Porters Five Forces Framework.........................................................................................................15
Critical Analysis........................................................................................................................................16
Conclusion.................................................................................................................................................16
References.................................................................................................................................................18

STRATEGIC MANAGEMENT 2
Introduction
Strategic Management describes the procedure of planning, analyzing and monitoring the all
actions of an organization that helps to meet all the goals and objectives. It is observed that
business environment of the firm are fluctuated due to which the firm faces the challenges while
operating the business. It is required for the firm to analyze the business environment so that it
develops the strategies to reduce the challenges and to attain the advantage in the competitive
market (Ansoff, Kipley, Lewis, Helm-Stevens, and Ansoff, 2018). There are many strategic
practices and framework that an organization has to use to evaluate the business environment
such as SWOT Analysis, PESTLE Analysis, Porters Five Forces Framework and many others
tool. These tools help to study the internal and external factors that affect the organization. The
firm can develop the strategies according to the business environment with the motive to operate
the business smoothly in the market. It is required to maintain the strategies on continuous basis
by analyzing the environment to attain the competitive advantage and grab the market share. In
this paper, the discussion is made on the topic “strategic management concepts and practices”.
In this paper, Reliance fresh and Amazon in India have been taken into consideration to analyze
the macro and micro environment factors. In this report, the strategic analysis will be done on
both the companies by consuming the different tools such as Porters Five Forces Framework,
SWOT Analysis, and PESTLE Analysis. At the end of paper, the critical analysis of both the
business environment will be done.
Background
Reliance Fresh

STRATEGIC MANAGEMENT 3
Reliance Fresh is a convenience store that provides the retail services to consumers. The
company operates the business in India. It operates the business under its subsidiary firm which
is known with the name of “Reliance Retail Limited”. It was established in the year 2006 under
the Retail industry. It is one of the most profitable companies of India as it is a largest publicly
traded firm in terms of market capitalization. It is also most profitable firm in terms of revenue.
There are 700 or more store of Reliance Fresh in India with the same format and similar services.
It serves in 93 cities of India to grab the market with the high share. It offers the consumers
goods services to consumers through physical stores (Reliance Retail, 2018).
Amazon
Amazon India is a multinational technology firm. It was established in 1994-95 in America. It
mainly focuses on cloud computing, e-commerce, digital streaming, and artificial intelligence. It
is famous for its distraction of well-established industries with the help of technological
innovation and mass scale. It is recognized as one of the big four tech companies along with
Google, Apple and Facebook. It is also one of the largest firms related to revenue and market
capitalization. It is a world leading Internet Company in terms of revenue. The company
expanded the business in various fields such as video games, software, electronics, apparel, toys,
food, furniture and jewelry. In the year 2015, Amazon expanded the business with Walmart as it
is the greatest valued retailer in the United States market in terms of market capitalization. It also
serves the consumers good and services through internet (Amazon, 2019).
It has been seen that both the companies supplies the similar services through different ways.
Both the companies have their own benefits and challenges those these can face while operating
the business. In order to find the challenges and compare the companies operation, the strategic

STRATEGIC MANAGEMENT 4
tools are used to examine such as SWOT Analysis, Porters Five Forces Framework, and
PESTLE Analysis.
Strategic Management Concepts
SWOT Analysis
SWOT Analysis is a strategic management tool that has been used to assess the external and
internal factors. This tool contains four elements such as strength, weaknesses, opportunity and
threat those are essential to examine to operate the business for long time (Gürel, and Tat, 2017).
It also helps to examine the current and future potential that helps to operate the business at the
global level. This tool is designed to facilitate a realistic, data-driven, and fact-based at the
strengths and weaknesses of the company or the industry.
Strength: Strength defines the factors those are different from the competitors and also helps to
achieve the objective in the market such as loyal customer base, strong brand, strong balance
sheet and the others.
Weaknesses: Weaknesses describes the factors that affects the business of the company and stop
them to perform its performance at its best level. There are some areas where the organization
has to improve to gain competitive advantage in the market.
Opportunity: It defines the external factors that the firm can grab to achieve the competitive
advantage.
Threat: It defines the factors that affect the organization performance. It is essential for the
company to identify the threat so that it can implement the strategies and to attain the objective
(Chernev, 2018).

STRATEGIC MANAGEMENT 5
PESTLE Analysis
PESTLE Analysis is also a technique of strategic management which is used to determine the
macro environment factors such as political, economic, social, technology, legal and
environmental. These factors effect the organization from the outside. This is the best tool to
evaluate the business environment and implement the strategies (PESTLE Analysis, 2019). It is
also a flexible tool as it can easily implement by the company to get the effective result. These
factors define the company in different segments those are describing below:
Political: Political describes the government decision and step towards the industry or the
economy. It contains foreign trade policy, political stability, labor law, corruption, tax policy and
environmental law.
Economic: Economic states the nation performance. It includes the different factors such as
interest rates, economic growth, inflation rate, disposable income, exchange rate (Frue, 2016).
Social: It contains the general environment factors that describe the demographic characteristics,
customs, norms and number of population. It contains the trends such as safety emphasis, career
attitudes, health consciousness, cultural barriers and lifestyle attitudes.
Technology: It defines the innovation and creation of the economy. It defines the research and
development (R&D) activity, technological change, the level of innovation, technology
incentives, automation and the amount of technological awareness that a market possesses
(Morschett, Schramm-Klein, and Zentes, 2015).
Legal: It defines the legal actions that the government takes to perform the activities. It contains
consumer protection laws, employment laws, discrimination laws, antitrust laws, patent laws and
copyright, health and safety laws.

STRATEGIC MANAGEMENT 6
Environmental: Environmental defines the atmosphere factors that affect the business. It
includes the weather, pollution and the other factors related to environmental (Rothaermel, 2015)
Porters Five Forces Framework
It is a strategic framework which is used to examine the competitive environment in the industry.
It contains the fives forces that explain the competition in the industry or the challenges the
company face in the coming future. The five forces are customers, suppliers, substitute, new
entrants and the competitors. These five forces completely define the industry structure that can
use to operate the business or it also helps to determine the corporate strategy. It is applied to any
segment. It helps to enhance the company long term profitability with time (Avery, and
Steenburgh, 2010).
The threat of new entrants: The threat of new entrants defines the new companies who enter
the market can gives the high competition to the company. The entrance of large number of
companies also a biggest threat for the existing or new entrants.
The threat of competitors: The threat of competitors defines the competition among the
companies under an industry. Competitors are those who offer the similar services to consumers
and offer the different facilities in order to compete with each other’s.
Bargaining Power of Buyers: Bargaining power of customers defines negotiation of customers
as it affects the demand and sales of the company. If there are large number of companies
operates the business and supplies the similar services with the discount then the negotiation
power of consumers has been increases and vice-versa (Dobbs, 2014).
Bargaining Power of Suppliers: If there is large (huge) number of supplier in the industry then
the switching fee is less due to which the negotiation power is low and vice versa.

STRATEGIC MANAGEMENT 7
The threat of substitute
The threat of substitute defines the product or services that can replace the goods and services of
the company. If there is any goods that can replace the product or services of the company then
the threat of competitors has been increases and vice-versa.
These three tools will be implemented in the organization that helps to assess the internal and
external factors. These tools help to compare both the industries and their operations in the
market (Morden, 2016).
Application of theories in Retail Industry vs ecommerce
Reliance Fresh
SWOT Analysis
Strength:
Brand Image: Reliance fresh is a leading company in retail industry of India. It has high brand
value in the Indian market. It has been seen that Reliance Fresh is a largest company in the
market that provides the consumers goods as per their needs and wants. As the demands of
consumers are highly satisfied due to which the consumers have high trust on it. The high moral
value enhances the brand value of the firm. Apart from it, it is also observed that Reliance fresh
is number one trading firm in retail industry which makes the brand image stronger (Mind Tools,
2018a).
Wide Range: It has been found that the company provides the different goods to consumers as
per their requirements such as household goods, pet food, and beauty products. It also offers the

STRATEGIC MANAGEMENT 8
daily routine products such as vegetables and fruits. Wide variety of goods and services helps to
enhance the volume of sale.
Strong financial position: Reliance Fresh has strong financial position in the market. As the
firm has high market value due to more or more people getting attracted towards it. It enhances
the amount of revenue as the volume of sales has been increases. The company also earned the
high profit due to which the financial position is getting strong (The Economic Times, 2015c).
Weaknesses:
Variation in prices of products: The main weakness of Reliance Fresh is that there is huge
price difference in products as it supplies the wide range of goods to customers. Different good
have different values according to their availability and demand. Variation in different prices
affects the customer’s demand which is not beneficial for the business in long terms.
More time in billing: It has been found that the firm makes the bills on purchasing the product
for consumers. The billing consumes more time to make the payment due to which the
consumers think twice to purchase the goods (Reliance Retail, 2018).
Opportunity
Fastest Growing: As discussed above, it has been observed that Reliance Fresh have high brand
image in the operating market due to which it has the opportunity to expand the business. It also
have a fast growing system that helps to grow in the market.
E-Retailing: The firm has the opportunity to enlarge the business in e-retailing so that the large
number of customers attracted towards it and grap the market share (Lasserre, 2017).
Threat:

STRATEGIC MANAGEMENT 9
Social Issue: It has been analyzed that company offers the different services due to which it can
face the social challenges such as taste, choices, culture and the others.
New entrants and local retailer: The Company faces the challenges related to new entrants as
the large numbers of companies enter this business.
PESTLE Analysis
Political: Indian supermarket is growing with the high market share. It has been noticed that
Indian government allowed the foreign businesses to enter the Indian market in order to do the
business (Ghosh, 2018). The Indian economy or supermarket industry has been growing with
this initiative but it is observed that foreign chain cause the unemployment and exploit the small
producers. This step also affects the Reliance Fresh in operating the business in the market.
Economic: Indian is a developing market economy. Indian economy ranked at the 5th number in
the world in terms of GDP and it is also recognized as the third largest purchasing power parity
(The Economic Times, 2015). As it is a developing market due to which the willing power of
consumers is moderate. The moderate demand of consumers affects the supermarket business.
Social: The lifestyle of consumers has been change and their demands are also fluctuating
according to trends due to which the retail companies face the challenges related to changing the
choices. It is difficult for the companies to satisfy the consumers demand by providing them all
services according to their requirements (Singh, 2018).
Technology: The Indian government takes initiative to develop the market by changing the
whole work or payment system on technology. It is observed that E-commerce industry growing
rapidly in the country. Customers have the opportunity to buy the products at the lowest rates as

STRATEGIC MANAGEMENT 10
per their own choices. This factor affects the business of retail industry especially physical retail
stores (IBEF, 2019a).
Legal: The government of India developed the numerous laws to protect the consumers. A new
Consumer Protection Bill has been permitted by the Government of India, Union Cabinet that
makes the existing laws more efficient with a wider scope. The government of India allowed
100% FDI. The percentage of FDI into single brand retail has been increases from 51 per cent to
100 per cent but now the government of India is also planning to hike FDI limit in multi-brand
retail by 51 % (IBEF, 2019a). It affects the business of retail industry as the FDI has been
increases in Indian market.
Environmental: The government banned the polythene for packing’s those are used by the retail
stores. The companies offer the paper and clothing bags with charges due to which the
environmental has been affected.
Porters Five Forces Framework
The threat of new entrants: The degree of threat of new entrants is also high as the numbers of
companies attracted toward this industry due to its high demand. The companies enter the
industry that increases due to which the threat of existing companies have been increases. Apart
from it, the less capital is essential to found the business in this industry that also enhances the
threat of new entrants.
The threat of competitors:
The threat level of competitors is high in the retail industry as there are large number of firms
enter in the retail industry such as Grofers, Tokri, Dmart and the others. It has been found that

STRATEGIC MANAGEMENT 11
these firms also gives the high competition to the company as these offers the similar services
with the different price rates which helps to grow in the market (IBEF, 2019d).
Bargaining Power of Consumers:
Bargaining power of buyers is high as there are many competitors that supply the similar
services to customers. Each and every company offers the different price and provides the
different facilities as services due to which the consumers have many options to purchase the
product. Many options increase the negotiation power of consumers to purchase the goods.
Bargaining Power of Suppliers:
Negotiation power of suppliers is low as it offers the wide range of services those can easily
available in the market. The high availability of raw material decreases the negotiation power of
suppliers as its switching cost is less. Less switching cost reduces the bargaining power of
suppliers.
The threat of substitute:
The threat level of substitute is low as it offers the household or consumers goods that cannot be
replace. As it does not able to replace the product due to which the threat of substitute is low
(Wheelen, Hunger, Hoffman, and Bamford, 2017).
Amazon
SWOT Analysis
Strength: