RELIANCE COMMUNICATION

Reliance
Growth through Vision

"Growth has no limit at Reliance. I keep revising my vision.

Only when you can dream it, you can do it."

Dhirubhai H. Ambani
Founder Chairman
Reliance Group of Companies

Reliance
 RELIANCE COMMUNICATION

Water tower 1920-21 Reliance Main Street looking south

History
The Milwaukee Land Company purchased land from C.C. and Anna
Herron for a town site in 1905 and the town was named Herron, but
changed to Reliance when it was decided that the name Herron
sounded too much like Huron. To the southwest stood a town site
named Dirkstown and all of the buildings from there were moved into
Reliance once it was learned the railroad would not be going through
Dirkstown. Town sites were set up by the railroad company at about
10-mile intervals.

Businesses, of the day, were set up immediately, probably the land

office being the first. That and the first bank and the newspaper to
advertise the land transactions. The lots sold for $200 for corner lots,
$150 for inside business lots, $150 for residential corner lots and $100
for inside residential lots. Peter B. Dirks and a Mr. Montgomery, of the
Farmers and Merchants State Bank from Dirkstown, purchased the
first corner lot. Dirks' Trust and Title Company also opened
a hardware and general store. Lafferty and Schoessler also had general
stores. The school was built in 1921; high school was discontinued in
 RELIANCE COMMUNICATION

1972 and the school was finally closed in 1996. All children now go to
Kennebec and Lyman High School in Presho. The community has had
three churches: Catholic, Methodist and Lutheran, almost since its
beginning.

The first residence built in Reliance was the two and one half story
home most of us remember as the Andy and Florence (Dirks) Anderson
home until 1972. This home has been purchased by Wade and Chyree
Hamiel and now sits on their land north of Reliance.

In 1910 the west side of Reliance's Main Street was almost

completely wiped out by fire. Businesses were rebuilt and along with
the railroad came two lumberyards, a creamery, livery, blacksmith,
taverns, hotels, restaurants, meat market, two banks, etc. Reliance
reached its population peak in the 1920s when it was at 317 and
according to the census, continued to decline until it was at 183
in 1945. The construction of Big Bend Dam at Fort Thompson in the
1960s caused the population in Reliance, Chamberlain and Oacoma to
increase. In 1960, Reliance had 72 homes housing 201 people. Today
(1999) Reliance is feeling a small growth as the communities of
Chamberlain, Oacoma and Lower Brule fill up and the overflow moves
to Reliance, and also to Pukwana in Brule County.

Many Reliance natives can still remember the parades and Indian
dances by the Lower Brule Sioux Tribe and the Fourth of July
celebrations at the Fred Fletcher home with horseshoe, baseball,
fishing, swimming, picnics, fireworks and homemade ice cream made
with ice that had been harvested in the winter and stored in ice
houses. In the late 1940s, early 1950s, Albert Stallman harvested ice
and sold it from his ice house west of the Stallman Cafe on Reliance's
west side of Main Street. Stallmans bought the two-story hotel/cafe
from George Husman. Also behind the cafe stood the Water tower as
seen in the photo, winter 1921-'22 ... Many of us will also remember
the gas station in the far SE corner of town owned and operated by
Jobe and Violet Marsden.

A gymnasium was built in 1949 with all volunteer help. Fundraisers

were held to help pay for the building. The American Legion purchased
the building in 1973 and it continues to be used today for community
functions and high school reunions. We all remember the amateur
shows, dances, carnivals, roller-skating with the Neugebauers, the
proms, etc.
 RELIANCE COMMUNICATION

Reliance basketball game provides thrills galore ...

Reprinted from the Chamberlain Register Feb. 1950

A basketball game which might well be called "the game of the

decade", was staged at the Reliance auditorium Friday night to
standing room only.

The two competing teams were the "Pensioners" (nothing over

seventy-one), and the "Imported Amazons (no one over thirty). The
Amazons were none other than Fritz Draphal, Lloyd Husman, Clete
Lester, Paul Burke and Roger J. Yates, dressed in garb second only to
Hollywood's Lana Turner and California's fruit crop.

The Pensioners had a larger roster of talent claiming Roy Fletcher,

John Hodgin, Abner Vehle, George Kentch, Babe Cullen, France Cullen,
Hank Sattler, Pete Erickson and Clyde Norton. Clyde, who since has
acquired the name of "Speed", put on quite a show for the crowd. He
kept them in a constant state of hysteria with his brilliant display of
basket shooting.

The referees were also local talent, billed as George "Ling" Husman
and Fritz, "Man Mountain" Hoffer. To say that they did they duties
would, well, be too modest for they made decisions which were so
popular with the crowd, they nearly rolled in the aisles (if there had
been any) with laughter.

The cheerleading was taken care of by such reliable hands as Esther

Black, Violet Marsden and Lena Huntsman, ably assisted by Ray
Stallman, Ray Kistler and Clyde Hickey. Clyde got into the act quite
often and proved very popular with the feminine fans.

After a furious battle of wits and brawn, the game ended in a 21-21
deadlock. It ended to be renewed at a future date.

It was a true example of the cooperation between all participants,

who were such good sports and the public, who so faithfully attended.
It created a general era of good feeling between the people of the
community. It was the main topic of conversation for many days
afterward

All proceeds were given to the March of Dimes

 RELIANCE COMMUNICATION

In 1975, the 12-man Reliance Development Association was

organized to renovate several old homes to rent or for resale as well as
paint up and fix up homes for the elderly. The Reliance Jaycees formed
in 1982 and have done a remarkable job in the community by creating
a beautiful park, keeping the cemeteries cleaned and mowed, helping
local residents in disaster or illness, to name a few of their projects.
They perform at an annual dinner theater as their major fundraiser of
the year and also sponsor the annual Christmas Carousel, a craft
fair/bake sale.

In 1999, Reliance has a municipal liquor store, the Farmers Union Co-
op and the Farmer's Union Elevator, Anderson Greenhouses, J&R Bait
Shop, Town and Country Super Valu, Hieb's Standard, Choal
Construction, Berg Construction, Heiman Construction, Zimmerman's
Auto sales, the fairly new fire department and post office. Jolene and
Ray Norton have added a much-needed snack bar in their bait shop to
accommodate the coffee drinkers, etc.

In 2000, Hiebs began remodeling their Standard station/garage to

include a convenience store.

RELIANCE
 RELIANCE COMMUNICATION

The Times of India reported on 5th May that [[Reliance]] Mutual Fund has kept its
position as India’s largest fund house with assets crossing INR 48,000 crores.
Reliance has the distinction of being the first Indian company to be named among the
five hundred listed in Forbes. How did all this come about? Let us dig into the rags to
riches story of Reliance. The one name associated with it from its foundations is
Dhirubhai Ambani.
Â
What is Reliance? The Reliance Group is India’s largest business house with total
revenues being more than $22.6 billion. This is equal to 3.5% of India’s GDP.
Reliance contributes to 10% of India’s total indirect tax and 6% of her total exports.
Reliance network of exports spread out to more than one hundred countries across
the globe.Â
What are the activities of Reliance? It is involved in oil exploration and production, gas
refining and marketing, petrochemicals, textiles, financial services, insurance, power,
telecommunications and infocom initiatives.Â
The names of Reliance and Dhirubhai Ambani go hand in hand. He was born on 28th
December 1932, in Chorwad, Gujarat. He belonged to the Hindu Modh Bania
community. Dhirubhai built India’s largest private sector empire, Reliance, and
created an equity cult. His father was a schoolteacher. Dhirubhai started off by selling
fried snacks to pilgrims in Mount Girnar during weekends. After school he became a
dispatch clerk at A.Besse & Company. The latter became distributors of Shell and
Dhirubhai was sent to manage an oil filling station at Aden. For sometime he also worked
in Dubai. In 1958 he returned to India with INR 50,000/- in his pocket. With this he set
up a textile trading company.Â
This was the first chapter of the story of Reliance. Aptly helped by his wife and two sons
Dhirubhai diversified his interests to petrochemicals, telecommunications and
information, technology, energy, power, finance, capital markets and logistics. Reliance
gave new dimensions to India’s equity culture. Till then the market had been
dominated by financial institutions but with Reliance coming into the picture
thousands of retail investors jumped into the fray by putting their trust in the name of
Reliance. With innovative instruments like convertible debentures from the 1980’s
Reliance became a hot favorite in the Stock Market. Reliance was the pioneer Indian
company to raise funds in the international markets. Only India’s sovereign rating
restricted its high credit taking in international markets.
The Federation of Indian Chambers of Commerce and Industry named Dhirubhai Ambani
of Reliance The Indian Entrepreneur of the 20th century. The Times of India
conducted a poll in which he was acclaimed to be the greatest creator of wealth in the
20th century.Â
Thus we see that Reliance Industries Ltd was the brainchild and product of the labors
of Indian business tycoon, Dhirubhai Ambani alias Dhirajlal Hirachand Ambani.
The story of Reliance makes fascinating reading. During the 1950’s the
administrators of Yemen discovered that a lot of their currency, the Rial, was
 RELIANCE COMMUNICATION

disappearing through Aden because of a young man placing unlimited buy orders for
Rials. The Rials, at that time, were made of pure silver and was greatly in demand in the
London Bullion Exchange. Dhirubhai bought and melted the Rials and sold it to the
London bullion traders. Within three months his work came to a halt but by that time he
had made few lacs.Â
In the 60’s Dhirubhai returned to India and started Reliance Commercial Corporation
with a humble capital. The business was related to the import of polyester yarn and
export of spices.Â
The first address of Reliance was in Narsinathan Street in Masjid Bunder – a small 350
sq ft joint with a telephone, table and three chairs and only two assistants. The family too
managed in a one room flat.Â
The fortunes of Reliance soon began to change. In 1966 the first textile mill was set up at
Naroda using polyester fibre. He branded his products Vimal and thanks to intensive
marketing, Vimal became a household name. Financial retail outlets were set up where
only Vimal brands were sold. In 1975 a visiting World Bank team certified it to be
excellent even by the standards of the developed world.Â
The next step of Reliance was to enter the equity world. An equity cult came to be
created. Nearly 60,000 investors from all parts of India placed their trust in Reliance IPO
in 1977. Rural India and first time investors learnt to place its trust and money in the
name of Reliance.
In 1982 Reliance Industries came up against a rights issue about partly convertible
debentures. It was rumored that Reliance was making all efforts to see that their stock
prices did not fall by even an inch. Ready to strike, a Bear cartel consisting of a group of
stockbrokers from Calcutta began to short sell Reliance shares. Another group, friendly
towards Reliance began to buy the short sold shares on the Bombay Exchange. The Bears
were confident that the Bulls would soon run out of cash and be prepared for an
understanding under the ‘badla’-trading scheme prevalent in the Bombay Stock
during that time. But the tables came to be turned in favor of Reliance. Dhirubhai himself
provided the required cash when the Bulls demanded a physical delivery of shares. The
net result was that Reliance shares shot up from INR 152/- to 180/- within a few minutes.
The market was in uproar with Dhirubhai as the uncrowned king. The Bombay Stock
Exchange came to be closed for three full days. Authorities intervened and brought down
the unbadla rate to 2/- with a ruling that the Bear cartel would have to deliver the shares
within the next few days. The Bears bought Reliance shares from the market at higher
price levels and most probably Dhirubhai himself supplied these shares and earned a
healthy profit from the great adventure.Â
Questions naturally arose around Reliance. How could a yarn trader within a few years
cough up such huge amounts of cash during a crisis? Parliament began to face queries.
The Finance Minister gave the information that a non-resident Indian had invested nearly
220/- million INR in Reliance from 1982/83. These had been channelized through many
companies – all registered in the Isle of Man. The peculiarity was that all the owners
had the common surname or Shah. However, Reserve Bank investigations did not find
anything wrong done by Reliance and its friends.
Keeping its core in petrochemicals – Reliance soon diversified its activities to
telecommunications, information technology, energy, power, retail, textiles, infrastructure
services, capital markets and logistics. BBC described it as ‘a business empire with an
 RELIANCE COMMUNICATION

estimated annual turnover of $12bn, and an 85,000- strong workforce’. Reliance has
the distinction of being the only public limited company whose many annual general
meetings had to be held in stadiums with more than 350,000 shareholders in attendance.
Success creates jealousy. Reliance had to suffer its share. Nusli Wadia of Bombay Dyeing
group was once the biggest competitor of Reliance. Wadia was known for his clout in
political circles during the time when the economy had not been liberalized. Competition
took an ugly turn when during the seventies Wadia got a permission from the then Janata
Party ruled government to build a DMT (Dimethyl Terephthalate) plant. Then Ramnath
Goenka of Indian Express turned his pen against Reliance. It seemed that Goenka was
using a national newspaper for his own personal vendetta. But despite everything people
did not lose faith in Reliance. Reliance ran into rough weather also with the V.P.Singh
government. The license for importing Purified Terephthalic Acid was cancelled. This
was essential as a raw material for manufacturing polyester yarn.
The first stroke had paralyzed Dhirubhai but the second stroke spelt out the death
sentence for him. He died in 2nd July 2002 leaving behind at the helm of Reliance his
two sons Mukesh and Anil, wife and two daughters. His funeral was attended not only by
big business and politicians but also by thousands of ordinary folks. He is an example of
what a common person can do to help himself as well as the economy of his country.Â
At the time of his death the Reliance group had a gross turn over of INR 75,000 crores
from 70 crores in 1976/77. In 20003 Government of India issued a postal stamp
(denomination 5/- INR) in Dhirubhai’s honour.Â
Reliance began to flow through two channels after the death of Dhirubhai. Differences
broke out between his two sons over ownership issues as well as private matters. It was
expressed that this would have no impact on the functioning of the company – it being
a company managed aggressively by professionals. This is of great importance to the
Indian economy as a whole. The wife of Dhirubhai, Kokilaben mediated for her sons.
Mukesh was awarded Reliance Industries and IPCL and this group came to be known, as
Reliance Industries Ltd. Anil became head of Infocomm, Reliance Energy and Reliance
Capital known as the Anil Dhirubhai Ambani Group (ADAG).Â
The pages of the book called Reliance thus continue to be written as it meanders through
Time.
 RELIANCE COMMUNICATION

DhirajlalHirachand Ambani,
one of the leading Indian
businessmen, was born on
December 28, 1932 in
Chorwad,Gujarat. opularly
known as Dhirubhai
Ambani, he heads The
Reliance Industries, India's
largest private enterprise.

Dhirubhai started off as a

small time worker with
Arab merchants in the
1950s and moved to
Mumbai in 1958 to start
his own business in spices.
After making modest
profits, he moved into
textiles and opened his mill
ne Ahmedabad. Dhirubhai
founded Reliance
Industries in 1958. After
that it was a saga of
expansions and successes.

Reliance, acknowledged as one of the best-run companies in the world has various sectors like
petrochemicals, textiles and is involved in the production of crude oil and gas, to polyester and
polymer products. The companies refinery at Jamnagar accounts for over 25% of India's total
refining capacity and their plant at Hazira is the biggest chemical complex in India. The
company has further diversified into Telecom, Insurance and Internet Businesses, the Power
Sector and so on. Now the Reliance group with over 85,000 employees provides almost 5% of
the Central Government's total revenue.

Dhirubhai has been one among the select Forbes billionaires and has also figured in the
Sunday Times list of top 50 businessmen in Asia. His industrious nature and willingness to
take on any risk has made him what he is. In 1986 after a heart attack he has handed over his
empire to his two sons Anil and Mukesh. His sons are carrying on the successful tradition of
their illustrious father.

Early life

'Dhirajlal Hirachand Ambani' was born on 28 December 1932, at Chorwad, Junagadh in the
state of Gujarat, India, into a Modh family of very moderate means. He was the second son of
 RELIANCE COMMUNICATION

a school teacher. When he was 16 years old, he moved to Aden, Yemen. Initially, Dhirubhai
worked as a dispatch clerk with A. Besse & Co. Two years later A. Besse & Co. became the
distributors for Shell products and Dhirubhai was promoted to manage the company’s oil-filling
station at the port of Aden.

He was married to Kokilaben and had two sons and two daughters. He also worked in Dubai
for some time during his early years.

Life in Aden

Kokilaben and Dhirubhai Ambani, In the 1950s, the Yemini administration realized that their
main unit of currency, the Rial, was disappearing fast. Upon launching an investigation, they
realized that a lot of Rials were being routed to the Port City of Aden. It was found that a
young man in his twenties was placing unlimited buy orders for Yemini Rials.

During those days, the Yemini Rial was made of pure silver coins and was in much demand at
the London Bullion Exchange. Young Dhirubhai bought the Rials, melted them into pure silver
and sold it to the bullion traders in London. During the latter part of his life, while talking to
reporters, it is believed that he said “The margins were small but it was money for jam. After
three months, it was stopped. But I made a few lakhs. In short, I was a manipulator. A very
good manipulator. But I don’t believe in not taking opportunities.

Reliance Commercial Corporation

Ten years later, Dhirubai returned to India and started the Reliance Commercial Corporation
with a capital of Rs. 15,000.00. The primary business of Reliance Commercial Corporation was
to import polyester yarn and export spices.

The business was setup in partnership with Champaklal Damani, his second cousin, who used
to be with him in Aden, Yemen. The first office of the Reliance Commercial Corporation was set
up at the Narsinathan Street in Masjid Bunder. It was a 350 Sq. Ft. room with a telephone,
one table and three chairs. Initially, they had two assistants to help them with their business.
In 1965, Champaklal Damani and Dhirubhai Ambani ended their partnership and Dhirubhai
started on his own. It is believed that both had different temperaments and a different take on
how to conduct business. While Mr. Damani was a cautious trader and did not believe in
building yarn inventories, Dhirubhai was a known risk taker and he considered that building
inventories, anticipating a price rise, and making profits through that was good for growth.

During this period, Dhirubhai and his family used to stay in an one bedroom apartment at the
Jaihind Estate in Bhuleshwar. Mumbai. In 1968, he moved to an up market apartment at
Altamount Road in South Mumbai.
 RELIANCE COMMUNICATION

Reliance Textiles

Sensing a good opportunity in the textile business, Dhirubhai started his first textile mill at
Naroda, near Ahmedabad in the year 1966. Textiles were manufactured using polyester fibre
yarn. Dhirubhai started the brand "Vimal", which was named after his elder brother Ramaniklal
Ambani's son, Vimal Ambani. Extensive marketing of the brand "Vimal" in the interiors of India
made it a household name. Franchise retail outlets were started and they used to sell "only
Vimal" brand of textiles. In the year 1975, a Technical team from the World Bank visited the
Reliance Textiles' Manufacturing unit. This unit has the rare distinction of being certified as
"excellent even by developed country standards" during that period.

Death

Dhirubhai Ambani was admitted to the Breach Candy Hospital in Mumbai on June 24, 2002
after he suffered a major "brain stroke". This was his second stroke, the first one had occurred
in February 1986 and had kept his right hand paralyzed. He was in a state of coma for more
than a week. A battery of doctors were unable to save his life. He breathed his last on July 6,
2002, at around 11:50 P.M. (Indian Standard Time).

His funeral procession was not only attended by business people, politicians and celebrities but
also by thousands of ordinary people. His elder son, Mukesh Ambani, performed the last rites
as per Hindu traditions. He was cremated at the Chandanwadi Crematorium in Mumbai at
around 4:30 PM (Indian Standard Time) on July 7, 2002.

He is survived by Kokilaben Ambani, his wife, two sons, Mukesh Ambani and Anil Ambani, and
two daughters, Nina Kothari and Deepti Salgaoca
Dhirubhai Ambani started his long journey in Bombay from the Mulji-Jetha Textile Market,
where he started as a small-trader. As a mark of respect to this great businessman, The
Mumbai Textile Merchants' decided to keep the market closed on July 8, 2002. At the time of
Dhirubhai's death, Reliance Group had a gross turnover of Rs. 75,000 Crore or USD $ 15
Billion. In 1976-77, the Reliance group had an annual turnover of Rs 70 crore and Dhirubhai
had started the business with Rs.15,000.

Dhirubhai Ambani rewrote

India's corporate history

Dhirajlal Hirachand Ambani is not just the usual rags-to-riches story.

He will be remembered as the one who rewrote Indian corporate history
and built a truly global corporate group. Popularly known as Dhirubhai,
the 69-year-old Ambani Sr., changed the rules of the game in the
industry in an era when the private sector was hampered by the licence
 RELIANCE COMMUNICATION

regime. In the process, he attracted criticism that he did not always play fair. There is also
the story of how the Ambanis blocked publication of a biography titled The Polyester
Prince written by a foreign writer by threatening legal action for anything they perceived
as defamatory in the book. Ambani's huge success, however, dwarfed the controversies
that surrounded him. A matriculate, he started his career as a worker at a Shell service
station in Aden (Yemen) but returned to the country to build an empire that now boasts of
a net worth of over Rs 300 billion with a net profit of over Rs 2,800 crore. Now
employing a workforce of 85,000, the group's Rs 25,000 crore integrated Jamnagar
refinery complex in Gujarat houses the world's largest greenfield project with a capacity
to refine 27 million tonnes of crude every year. Born in Chorvad in Junagadh in 1932 as
the third son to a village school teacher, Ambani embarked on an entrepreneurial career
by selling "bhajias" to pilgrims in Mount Girnar over the weekends. Armed with a
matriculation certificate, he went to Aden only to return with a big idea of building a
petroleum company. He returned to India in 1958 with Rs 50,000 and set up a textile
trading company. Starting from a scratch in 1966, Ambani and his two US-educated sons
- Mukesh and Anil -- have built brick by brick an empire that has outstripped older
venerable groups like the Tatas and the Birlas. Ambani is also credited with shaping
India's equity culture, attracting millions of retail investors in a market till then
dominated by financial institutions. More than the fact that he built India's largest private
sector company from a scratch, Ambani will be remembered for revolutionising capital
markets. From nothing, he generated billions of rupees in wealth for those who put their
trust in his companies. Over a period of two decades, Ambani's millions of investors
lifted him from being owners of a fledgeling Rs 2-3 million firm in the 1970s to a
situation, according to last count, the total revenues were more than Rs 600 billion. The
group flagship Reliance Industries is valued by the market at nearly Rs 300 billion, while
Reliance Petroleum commands a figure of nearly Rs 170 billion. And the group's assets
add up to over Rs 520 billion. Backward and forward
'integration' became the buzzwords in the Ambani group's
strategy of growth. Today, the group straddles every link in
the petroleum and petrochemicals value chain, beginning
with oil and gas production to refining, to making
intermediates and finished products like fabrics. Ambani is
also credited with being the man whose efforts helped
create an 'equity cult' in the Indian capital market. with innovative instruments like the
convertible debenture, Reliance quickly became a darling of the stock market in the
1980s. Today, the group has close to five million individual shareholders. In 1992,
Reliance became the first Indian company to raise money in global markets, its high
credit-taking in international markets limited only by India's sovereign rating. With the
meteoric rise of the Ambanis came formidable power and clout. What distinguishes
Reliance's growth is that much of it came not during the post-liberalisation 1990s but in
the days of the 'License Raj' when there were stifling controls on the industry. Dhirubhai
managed to get his way and created his empire with remarkable ease, a way his business
rivals could not digest easily. They accuse the group of subverting the system in its
penchant for growth. Critics accuse the group of resorting to all tricks of the trade and
breaking all rules of the game. The corridors of power in Delhi and elsewhere are replete
with stories of what the Ambani influence could do to the careers of politicians and
 RELIANCE COMMUNICATION

bureaucrats. Every Cabinet and bureaucratic reshuffle spurred a string of such stories. But
the Ambanis were not bothered about these reports and ascribe such writings to the
campaign by rivals inspired by jealousy. While the Ambanis inspire admiration and serve
as role models, they are also controversial. Back in the mid-1980s, stories used to do
rounds of their clout in the power corridor when they were locked in a bitter spat with
Bombay Dyeing's Nusli Wadia. The Reliance group is also often the target of campaign
by adversaries.In his relentless run to the pinnacle, Dhirubhai became the highest-paid
chief executive officer with a salary at Rs 88.5 million leaving Wipro's Azim Premji far
behind at Rs 42 million. Both are among the world's top 500 billionaires

SWOT analysis method and examples, with free SWOT template

The SWOT analysis is an extremely useful tool for

understanding and decision-making for all sorts of situations in
business and organizations. SWOT is an acronym for
Strengths, Weaknesses, Opportunities, Threats. Information
about the origins and inventors of SWOT analysis is below. The
SWOT analysis headings provide a good framework for
reviewing strategy, position and direction of a company or
business proposition, or any other idea. Completing a SWOT
analysis is very simple, and is a good subject for workshop
sessions. SWOT analysis also works well in brainstorming
meetings. Use SWOT analysis for business planning, strategic
planning, competitor evaluation, marketing, business and
product development and research reports. You can also use
SWOT analysis exercises for team building games. See also
PEST analysis, which measures a business's market and
potential according to external factors; Political, Economic,
Social and Technological. It is often helpful to complete a PEST
analysis prior to a SWOT analysis. See also Porter's Five Forces
model, which is used to analyse competitive position.

A SWOT analysis measures a business unit, a proposition or idea; a

PEST analysis measures a market.

A SWOT analysis is a subjective assessment of data which is organized

by the SWOT format into a logical order that helps understanding,
presentation, discussion and decision-making. The four dimensions are
a useful extension of a basic two heading list of pro's and con's .

SWOT analysis can be used for all sorts of decision-making, and the
SWOT template enables proactive thinking, rather than relying on
habitual or instinctive reactions.
 RELIANCE COMMUNICATION

The SWOT analysis template is normally presented as a grid,

comprising four sections, one for each of the SWOT headings:
Strengths, Weaknesses, Opportunities, and Threats. The free SWOT
template below includes sample questions, whose answers are
inserted into the relevant section of the SWOT grid. The questions are
examples, or discussion points, and obviously can be altered
depending on the subject of the SWOT analysis. Note that many of the
SWOT questions are also talking points for other headings - use them
as you find most helpful, and make up your own to suit the issue being
analysed. It is important to clearly identify the subject of a SWOT
analysis, because a SWOT analysis is a perspective of one thing, be it a
company, a product, a proposition, and idea, a method, or option, etc.

Here are some examples of what a SWOT analysis can be used to

assess:

• a company (its position in the market, commercial viability, etc)

• a method of sales distribution
• a product or brand
• a business idea
• a strategic option, such as entering a new market or launching a
new product
• a opportunity to make an acquisition
• a potential partnership
• changing a supplier
• outsourcing a service, activity or resource
• an investment opportunity

Be sure to describe the subject for the SWOT analysis clearly so that
people contributing to the analysis, and those seeing the finished
SWOT analysis, properly understand the purpose of the SWOT
assessment and implications.

Subject of SWOT analysis:
Strengths
• Advantages of proposition?
• Capabilities?
• Competitive advantages?
• USP's (unique selling points)?
• Resources, Assets, People?
• Experience, knowledge, data?
• Financial reserves, likely
returns?
• Marketing - reach, distribution,
awareness?
• Innovative aspects?
• Location and geographical?
• Price, value, quality?
• Accreditations, qualifications,
certifications?
• Processes, systems, IT,
communications?
• Cultural, attitudinal,
behavioral?
• Management cover,
succession?
opportunities
• Market developments?
RELIANCE COMMUNICATION
Weaknesses
• Disadvantages of proposition?
• Gaps in capabilities?
• Lack of competitive strength?
• Reputation, presence and
reach?
• Financials?
• Own known vulnerabilities?
• Timescales, deadlines and
pressures?
• Cash flow, start-up cash-drain?
• Continuity, supply chain
robustness?
• Effects on core activities,
distraction?
• Reliability of data, plan
predictability?
• Morale, commitment,
leadership?
• Accreditations, etc?
• Processes and systems, etc?
• Management cover,
succession?
threats
• Political effects?
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• Competitors' vulnerabilities? • Legislative effects?

• Industry or lifestyle trends?
• Technology development and
innovation?
• Global influences?
• New markets, vertical,
horizontal?
• Niche target markets?
• Geographical, export, import?
• New USP's?
• Tactics - surprise, major
contracts, etc?
• Business and product
development?
• Information and research?
• Partnerships, agencies,
distribution?
• Volumes, production,
economies?
• Environmental effects?
• IT developments?
• Competitor intentions -
various?
• Market demand?
• New technologies, services,
ideas?
• Vital contracts and partners?
• Sustaining internal capabilities?
• Obstacles faced?
• Insurmountable weaknesses?
• Loss of key staff?
• Sustainable financial backing?
• Economy - home, abroad?
• Seasonality, weather effects?

• Seasonal, weather, fashion

influences?

This SWOT analysis example is based on an imaginary situation. The

scenario is based on a business-to-business manufacturing company,
who historically rely on distributors to take their products to the end
user market. The opportunity, and therefore the subject for the SWOT
analysis, is for the manufacturer to create a new company of its own to
distribute its products direct to certain end-user sectors, which are not
being covered or developed by its normal distributors.

Subject of SWOT analysis example: the creation of own

distributor company to access new end-user sectors not
currently being developed.

strengths
• End-user sales control and
direction.
• Right products, quality and
reliability.
• Superior product performance
vs competitors.
• Better product life and
durability.
• Spare manufacturing capacity.
• Some staff have experience of
end-user sector.
• Have customer lists.
• Direct delivery capability.
• Product innovations ongoing.
• Can serve from existing sites.
• Products have required
accreditations.
• Processes and IT should cope.
• Management is committed
and confident.
opportunities
• Could develop new products.
• Local competitors have poor
products.
• Profit margins will be good.
• End-users respond to new
ideas.
• Could extend to overseas.
• New specialist applications.
• Can surprise competitors.
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weaknesses
• Customer lists not tested.
• Some gaps in range for certain
sectors.
• We would be a small player.
• No direct marketing
experience.
• We cannot supply end-users
abroad.
• Need more sales people.
• Limited budget.
• No pilot or trial done yet.
• Don't have a detailed plan yet.
• Delivery-staff need training.
• Customer service staff need
training.
• Processes and systems, etc
• Management cover insufficient.
threats
• Legislation could impact.
• Environmental effects would
favour larger competitors.
• Existing core business
distribution risk.
• Market demand very seasonal.
• Retention of key staff critical.
• Could distract from core
business.
 RELIANCE COMMUNICATION

• Support core business

• Possible negative publicity.
economies.
• Vulnerable to reactive attack by
• Could seek better supplier
major competitors.
deals.

See also the free PEST analysis template and method, which measures
a business according to external factors; Political, Economic, Social and
Technological. It is often helpful to complete a PEST analysis prior to
competing a SWOT analysis.

See also Porter's Five Forces model.

more on the difference and relationship between

PEST and SWOT

PEST is useful before SWOT - not generally vice-versa - PEST definitely

helps to identify SWOT factors. There is overlap between PEST and
SWOT, in that similar factors would appear in each. That said, PEST
and SWOT are certainly two different perspectives:

PEST assesses a market, including competitors, from the standpoint of

a particular proposition or a business.

SWOT is an assessment of a business or a proposition, whether your

own or a competitor's.

Strategic planning is not a precise science - no tool is mandatory - it's a

matter of pragmatic choice as to what helps best to identify and
explain the issues.

PEST becomes more useful and relevant the larger and more complex
the business or proposition, but even for a very small local businesses
a PEST analysis can still throw up one or two very significant issues
that might otherwise be missed.

The four quadrants in PEST vary in significance depending on the type

of business, eg., social factors are more obviously relevant to
consumer businesses or a B2B business close to the consumer-end of
 RELIANCE COMMUNICATION

the supply chain, whereas political factors are more obviously relevant
to a global munitions supplier or aerosol propellant manufacturer.

All businesses benefit from a SWOT analysis, and all businesses benefit
from completing a SWOT analysis of their main competitors, which
interestingly can then provide some feed back into the economic
aspects of the PEST analysis.

the origins of the SWOT analysis model

This remarkable piece of history as to the origins of SWOT analysis was

provided by Albert S Humphrey, one of the founding fathers of what we
know today as SWOT analysis. I am indebted to him for sharing this
fascinating contribution. Albert Humphrey died on 31 October 2005. He
was one of the good guys.

SWOT analysis came from the research conducted at Stanford

Research Institute from 1960-1970. The background to SWOT stemmed
from the need to find out why corporate planning failed. The research
was funded by the fortune 500 companies to find out what could be
done about this failure. The Research Team were Marion Dosher, Dr
Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie.

It all began with the corporate planning trend, which seemed to appear
first at Du Pont in 1949. By 1960 every Fortune 500 company had a
'corporate planning manager' (or equivalent) and 'associations of long
range corporate planners' had sprung up in both the USA and the UK.

However a unanimous opinion developed in all of these companies that

corporate planning in the shape of long range planning was not
working, did not pay off, and was an expensive investment in futility.

It was widely held that managing change and setting realistic

objectives which carry the conviction of those responsible was difficult
and often resulted in questionable compromises.

The fact remained, despite the corporate and long range planners, that
the one and only missing link was how to get the management team
agreed and committed to a comprehensive set of action programmes.

To create this link, starting in 1960, Robert F Stewart at SRI in Menlo

Park California lead a research team to discover what was going wrong
with corporate planning, and then to find some sort of solution, or to
 RELIANCE COMMUNICATION

create a system for enabling management teams agreed and

committed to development work, which today we call 'managing
change'.

The research carried on from 1960 through 1969. 1100 companies and
organizations were interviewed and a 250-item questionnaire was
designed and completed by over 5,000 executives. Seven key findings
lead to the conclusion that in corporations chief executive should be
the chief planner and that his immediate functional directors should be
the planning team. Dr Otis Benepe defined the 'Chain of Logic' which
became the core of system designed to fix the link for obtaining
agreement and commitment.

1. Values
2. Appraise
3. Motivation
4. Search
5. Select
6. Programme
7. Act
8. Monitor and repeat steps 1 2 and 3

We discovered that we could not change the values of the team nor set
the objectives for the team so we started as the first step by asking the
appraisal question ie what's good and bad about the operation. We
began the system by asking what is good and bad about the present
and the future. What is good in the present is Satisfactory, good in the
future is an Opportunity; bad in the present is a Fault and bad in the
future is a Threat. This was called the SOFT analysis.

When this was presented to Urick and Orr in 1964 at the Seminar in
Long Range Planning at the Dolder Grand in Zurich Switzerland they
changed the F to a W and called it SWOT Analysis.

SWOT was then promoted in Britain by Urick and Orr as an exercise in

and of itself. As such it has no benefit. What was necessary was the
sorting of the issues into the programme planning categories of:

1. Product (what are we selling?)

2. Process (how are we selling it?)
3. Customer (to whom are we selling it?)
4. Distribution (how does it reach them?)
5. Finance (what are the prices, costs and investments?)
6. Administration (and how do we manage all this?)
 RELIANCE COMMUNICATION

The second step then becomes 'what shall the team do' about the
issues in each of these categories. The planning process was then
designed through trial and error and resulted finally in a 17 step
process beginning with SOFT/SWOT with each issue recorded
separately on a single page called a planning issue.

The first prototype was tested and published in 1966 based on the
work done at 'Erie Technological Corp' in Erie Pa. In 1970 the prototype
was brought to the UK, under the sponsorship of W H Smith & Sons plc,
and completed by 1973. The operational programme was used to
merge the CWS milling and baking operations with those of J W French
Ltd.

The process has been used successfully ever since. By 2004, now, this system has been
fully developed, and proven to cope with today's problems of setting and agreeing
realistic annual objectives without depending on outside consultants or expensive staff
resources.

the seven key research findings

The key findings were never published because it was felt they were
too controversial. This is what was found:

1) A business was divided into two parts. The base business plus the
development business. This was re-discovered by Dr Peter Senge at
MIT in 1998 and published in his book the 5th Dimension. The amount
of development business which become operational is equal to or
greater than that business on the books within a period of 5 to 7 years.
This was a major surprise and urged the need for discovering a better
method for planning and managing change.

2) Dr Hal Eyring published his findings on 'Distributive Justice' and

pointed out that all people measure what they get from their work and
divide it by what they give to the work and this ratio is compared to
others. If it is not equal then the person first re-perceives and secondly
slows down if added demands are not met. (See for interest Adams
Equity Theory and the Equity Theory Diagram pdf)

3) The introduction of a corporate planner upset the sense of fair play

at senior level, making the job of the corporate planner impossible.

4) The gap between what could be done by the organisation and what
was actually done was about 35%.
 RELIANCE COMMUNICATION

5) The senior man will over-supervise the area he comes from. Finance-
Finance, Engineering-Engineering etc.

6) There are 3 factors which separate excellence from mediocrity:

a. Overt attention to purchasing

b. Short-term written down departmental plans for improvement

c. Continued education of the Senior Executive

7) Some form of formal documentation is required to obtain approval

for development work. In short we could not solve the problem by
stopping planning.

in conclusion

By sorting the SWOT issues into the 6 planning categories one can
obtain a system which presents a practical way of assimilating the
internal and external information about the business unit, delineating
short and long term priorities, and allowing an easy way to build the
management team which can achieve the objectives of profit growth.

This approach captures the collective agreement and commitment of

those who will ultimately have to do the work of meeting or exceeding
the objectives finally set. It permits the team leader to define and
develop co-ordinated, goal-directed actions, which underpin the overall
agreed objectives between levels of the business hierarchy.

translating SWOT issues into actions under the six

categories

Albert Humphrey advocated that the six categories:

1. Product (what are we selling?)

2. Process (how are we selling it?)
3. Customer (to whom are we selling it?)
4. Distribution (how does it reach them?)
5. Finance (what are the prices, costs and investments?)
6. Administration (and how do we manage all this?)
 RELIANCE COMMUNICATION

provide a framework by which SWOT issues can be developed into

actions and managed using teams.

This can be something of a 'leap', and so the stage warrants further

explanation. Translating the SWOT issues into actions, are best sorted
into (or if necessary broken down into) the six categories, because in
the context of the way that business and organizations work, this
makes them more quantifiable and measurable, responsible teams
more accountable, and therefore the activities more manageable. The
other pivotal part in the process is of course achieving the commitment
from the team(s) involved, which is partly explained in the item
summarising Humphrey's TAM® model and process.

As far as identifying actions from SWOT issues is concerned, it all very

much depends on your reasons and aims for using SWOT, and also
your authority/ability to manage others, whom by implication of
SWOT's breadth and depth, are likely to be involved in the agreement
and delivery of actions.

Depending on pretext and situation, a SWOT analysis can produce

issues which very readily translate into (one of the six) category
actions, or a SWOT analysis can produce issues which overlay a
number of categories. Or a mixture. Whatever, SWOT essentially tells
you what is good and bad about a business or a particular proposition.
If it's a business, and the aim is to improve it, then work on translating:

strengths (maintain, build and leverage),

opportunities (prioritise and optimise),
weaknesses (remedy or exit),
threats (counter)

into actions (each within one of the six categories) that can be agreed
and owned by a team or number of teams.

If the SWOT analysis is being used to assess a proposition, then it could

be that the analysis shows that the proposition is too weak (especially
if compared with other SWOT's for alternative propositions) to warrant
further investment, in which case further action planning, other than
exit, is not required.

If the proposition is clearly strong (presumably you will have indicated

this using other methods as well), then proceed as for a business, and
translate issues into category actions with suitable ownership by
team(s).
 RELIANCE COMMUNICATION

This is my understanding of Albert Humphrey's theory relating to

developing SWOT issues into organizational change actions and
accountabilities. (I'm pleased to say that Albert kindly confirmed that
this is indeed correct.)

There are other ways of applying SWOT of course, depending on your

circumstances and aims, for instance if concentrating on a department
rather than a whole business, then it could make sense to revise the
six categories to reflect the functional parts of the department, or
whatever will enable the issues to be translatable into manageable,
accountable and owned aims.

Here is a summary of Albert Humphrey's impressive TAM® (Team

Action Management) model, developed and used to speed up the
process of initiating and controlling organizational change

Reliance - ADA Group

 RELIANCE COMMUNICATION
and the future. What is good in the present is Satisfactory, good in the future is an
Opportunity; bad in the present is a Fault and bad in the future is a Threat. This was calle
SOFT analysis.

When this was presented to Urick and Orr in 1964 at the Seminar in Long Range Planning
the Dolder Grand in Zurich Switzerland they changed the F to a W and called it SWOT Ana

SWOT was then promoted in Britain by Urick and Orr as an exercise in and of itself. As suc
has no benefit. What was necessary was the sorting of the issues into the programme pla
categories of:

1. Product (what are we selling?)

2. Process (how are we selling it?)
3. Customer (to whom are we selling it?)
4. Distribution (how does it reach them?)
5. Finance (what are the prices, costs and investments?)
6. Administration (and how do we manage all this?)

The second step then becomes 'what shall the team do' about the issues in each of these
categories. The planning process was then designed through trial and error and resulted f
in a 17 step process beginning with SOFT/SWOT with each issue recorded separately on a
single page called a planning issue.

The first prototype was tested and published in 1966 based on the work done at 'Erie
Technological Corp' in Erie Pa. In 1970 the prototype was brought to the UK, under the
sponsorship of W H Smith & Sons plc, and completed by 1973. The operational programm
used to merge the CWS milling and baking operations with those of J W French Ltd.

The process has been used successfully ever since. By 2004, now, this system has been f
developed, and proven to cope with today's problems of setting and agreeing realistic an
objectives without depending on outside consultants or expensive staff resources.

the seve
key research findings

The key findings were never published because it was felt they were too controversial. Th
what was found:

1) A business was divided into two parts. The base business plus the development busine
This was re-discovered by Dr Peter Senge at MIT in 1998 and published in his book the 5t
Dimension. The amount of development business which become operational is equal to o
greater than that business on the books within a period of 5 to 7 years. This was a major
surprise and urged the need for discovering a better method for planning and managing
RELIANCE COMMUNICATION