Book Report

Abhishek Shah

The Polyester Prince

Hamish McDonald

This book is an unauthorized biography of Indian business tycoon Dhirubhai Ambani (DB Ambani). Dhirubhai Ambani founded Reliance industries limited, one of Indias largest organizations by market capitalization. Ambani started his business in 1969 with a capital of $500 and his fortune, at the time of his death, in 2002 was worth $6 billion. This book offers some insight into how he achieved this phenomenal growth. Along with the dramatic expansion of the Reliance Group have come intricate political connections, corruption charges, and an abundance of booms and crashes for Ambani and his company. The textile giant continues to realize his dream to be known as the outsider who took on India's business establishment and won, establishing a world-class company in the process. There are 3 key messages in this book one for individual entrepreneurs and two for organizations in general. From individual perspective Apart from having the vision and hard work it is the ability to energize masses to have a shared vision that drives individual and organizational growth. Ambani successfully convinced common man i.e. mum and dad investors to put their life savings in reliance shares in return for expected high rate of return. His company had the largest number of shareholders for any company in the world during the 70s before the privatization of British Telecom. Hence, Ambani is often credited with starting the equity cult in India. For organizations this books highlights reliance as a test case for backward integration as a growth strategy. Reliance started off as a company trading in polyester yarn, then it started manufacturing polyester, then it went into petroleum to manufacture DMT (a key ingredient in polyester manufacturing). Backward integration strategy provided almost monopolist control to reliance in polyester market. Additionally, the book highlights the importance of external factors for an organization growth. In its early years, Reliance realized that the Government of India was number 1 external factor affecting business growth in India. It employed the strategy of effectively lobbying the

government to get favorable support. This government support coupled with backward integration strategy was the key driver of Reliance growth over the years. Now Reliance activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles, retail, infotel and special economic zones.