The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Amit Singh Bhadauriya, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur
After the death of Dhirubhai Ambani, both brother’s, Anil Ambani and Mukesh Ambani, separated, and Reliance group, which was the most valued company of India was broken into 2 parts in 2005, brokered by the Ambanis’ mother. Mukesh got the group’s petrochemicals flagship, Reliance Industries (RIL), Reliance Petroleum and Reliance Industrial Infrastructure Ltd (RIIL) ,Indian Petrochemicals Corp Limited, and kept the Reliance brand. While Anil formed the Anil Dhirubhai Ambani Group (ADAG) with Reliance Communications (RCOM), Reliance Energy (REL), Reliance Capital (RCL), and Reliance Natural Resources Ltd (RNRL) forming the group.
So, this was the history about them. Now the question is that after separation of Reliance industries in 2005, the value of ADAG group is declining, while other brother, Mukesh is moving up the ladder of success. In forbes rich list 2015, Mukesh Ambani is at 39th place globally while Anil is at 418th place. So, what has created this difference, while they have started from the same level after the death of his father in 2002, who was the founder Reliance Industries? And the answer is their focus and philosophy of doing business.
Mukesh Ambani, who has always been touted as next Dhirubhai Ambani, has the same skills and philosophy of doing business as his father. Even if he lives in a modern and unusually angular skyscraper towers above the hustle and bustle of the city, but the philosophy of doing business is quite traditional. He believes in doing business in large scale, for example you can take Reliance Retail and Reliance Petrochemical. He has excelled in business of petrochemical, oil and gas and has core competencies, thus competitive advantage in that business.
Anil Ambani, on the other hand, who has completed his MBA degree from The Wharton School, with expertise in Finance. He has a new style of doing business and believes to follow new age business principles in running his ADAG group companies. He has involved himself in more risky and glamorous businesses like media and telecommunication. His dependence on risky businesses has caused the decline in the market value of his asset, like he has 65 percent stake in Reliance Communication which contributes most in his business, is not doing well. He was not able to excel in any one business and tried to enter in all the businesses, which were riskier because of high competition in those businesses. Thus, he was not able to get the competitive edge over his competitors who were already well established in that filed.