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Marketing Management Assignment

Infosys Technologies Limited

Submitted by
Hariom Singh
Amrita School of Business
Cochin Kerala

Submitted on April 3rd 2010


Contents

Overview of IT Industry 03
Background of the Company 04
Offerings 05
Vision & Mission 07
Awards and Recognition 08
STP Analysis 09
Competition 10
S.W.O.T. Analysis 11
Porters Five Forces Model 12
Ansoff’s matrix 13
BCG Matrix 14
Marketing strategies 14
Future plans 16
Key Success Factors 17
Our Strategies 17
Conclusions 17
Headquarters & Branches 18

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OVERVIEW OF IT INDUSTRY
Information Technology is one of the most important industries in the Indian economy.
The IT industry of India has registered huge growth in recent years. India's IT industry
grew from 150 million US Dollars in 1990-1991 to a whopping 50 billion UD Dollars in
2006-2007. In the last ten years the Information Technology industry in India has grown
at an average annual rate of 30%.

The liberalization of the Indian economy in the early nineties has played a major role in
the growth of the IT industry of India. Deregulation policies adopted by the Government
of India have led to substantial domestic investment and inflow of foreign capital to this
industry. In 1970, high import duties had forced IBM to leave India. However, after the
early nineties, many multi-national IT companies, including IBM, have set up their
operations in India. During the ten year period 1992-2002, the Indian software industry
grew at double the rate as the US software industry.

Information Technology in India accounts for a substantial part of the country's GDP and
export earnings while providing employment to a significant number of its tertiary
sector workforce. The most prominent IT hubs are IT capital Bangalore and presently
growing Chennai. Technically proficient immigrants from India sought jobs in the
western world from the 1950s onwards as India's education system produced more
engineers than its industry could absorb. India's growing stature in the information age
enabled it to form close ties with both the United States of America and the European
Union.

Out of 400, 000 engineers produced per year in the country, 100, 000 possessed both
technical competency and English language skills. India developed a number of
outsourcing companies specializing in customer support via Internet or telephone
connections. By 2009, India also has a total of 37,160,000 telephone lines in use, a total
of 506,040,000 mobile phone connections, a total of 81,000,000 Internet users—

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comprising 7.0% of the country's population, and 7,570,000 people in the country have
access to broadband Internet— making it the 12th largest country in the world in terms
of broadband Internet users.[9] Total fixed-line and wireless subscribers reached 543.20
million as of November, 2009.

Some of the major companies in the IT industry of India are -

 Tata Consultancy Services (TCS)


 Infosys
 Wipro
 IBM
 HCL
 Patni
 Satyam
India's IT industry caters to both domestic and export markets. Exports contribute
around 75% of the total revenue of the IT industry in India. The IT industry can be
broadly divided into four segments -
 IT services
 Softwares (includes both engineering and Research and Development)
 ITES-BPO
 Hardware

Background of the Company


Infosys Technologies Ltd. (NASDAQ: INFY) was founded in 1981 by Shri N.R. Narayana
Murthy and six of his colleagues with US $250 with a software services firm in Bombay.
Today, this is global leader in the "next generation" of IT and consulting with revenues
of over US$ 4 billion.

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It is one of the most sought after companies in Indian. On its client list are a number of
Fortune 500 companies. It is the first Indian company to be listed on the NASDAQ. As of
31 August 2006, Infosys boasted a market capitalization of Rs 100,000 crore which has
increased from March 2004 market capitalization of Rs 32,900 crore, an increase of
300% in two and a half years. Infosys is now among the top five software services
companies in the world

Infosys defines designs and delivers technology-enabled business solutions that help
Global 2000 companies win in a Flat World. Infosys also provides a complete range of
services by leveraging our domain and business expertise and strategic alliances with
leading technology providers.

Our offerings span business and technology consulting, application services, systems
integration, product engineering, custom software development, maintenance, re-
engineering, independent testing and validation services, IT infrastructure services and
business process outsourcing.

Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive
force in the industry leading to the rise of offshore outsourcing. The GDM is based on
the principle of taking work to the location where the best talent is available, where it
makes the best economic sense, with the least amount of acceptable risk.

Infosys has a global footprint with over 50 offices and development centers in India,
China, Australia, the Czech Republic, Poland, the UK, Canada and Japan. Infosys and its
subsidiaries have 105,453 employees as on September 30, 2009

Infosys takes pride in building strategic long-term client relationships. Over 97% of
revenues come from existing customers.

Offerings
Business solutions and services help accelerate innovation, increase productivity, reduce
costs, and optimize asset utilization.

The services offered by Infosys are


IT Services
They create IT-enabled business solutions for their clients by leveraging their domain
and business expertise along with a complete range of services.

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Engineering Services
We provide concept-to-market R&D and engineering services to improve your product
operations. Our services address the complete engineering value chain spanning various
industry verticals.

Consulting Services
Our consulting services ensure that you become stronger, more competitive and
capable of managing global business.

BPO Services
Infosys BPO combines domain expertise, process skills and technology to deliver world-
class process outsourcing.

Other industries covered by them are Engineering Enterprises Financial Services


Healthcare Life Sciences Manufacturing Retail & Consumer Packaged Goods Banking and
Capital Markets Travel and Leisure Media and Entertainment Technology Telecom
Transportation¨ Aviation Utilities & Energy Enterprise Solutions Business process
Outsourcing (BPO).

Products and Platforms


The Transformation Solution, Banking Solutions and platforms provide a holistic and
integrated Our Transformation Solution, Banking Solutions and platforms provide a
holistic and integrated transformation approach, complete with solutions and services.

Collaborative Analytics

Infosys' solutions in Collaborative Analytics help Consumer Packaged Goods companies


and retailers achieve sales and marketing effectiveness by leveraging demand insights to
shape sense and respond profitably in time.
 

Finacle

It is our Universal Banking Solution addressing the core banking, e-banking, Islamic
banking, treasury, wealth management, and CRM requirements of retail, corporate and
global banks.

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Infosys Active Desk

It is a comprehensive optimization solution for Customer Service Representatives


enabling them to manage customer calls efficiently, enhance customer experience,
increase revenue per customer through cross-selling, and track their own performance
as well.
 
Infosys iProwe

Infosys iProwe is a patent-pending Web Accessibility Assessment Product from the Web
2.0 Research Lab of Infosys SET Labs. iProwe uses built-in intelligence to analyze and
address accessibility issues of websites for enhanced Web accessibility and usability.
 

Infosys mConnect

It is a context-aware, real-time mobile transaction middleware that enables mobile


services for websites and e Commerce platforms.

Infosys Unified Communications and Collaboration (UC)

This solution enables communication between a company’s employees, customers and


suppliers through e-mail, voice, chat, video, web and instant messaging.
Infosys also launched Customer Communications Management Portal for Enterprise
Communications. It launched it in Australia and New Zealand .Consumers can opt for
eco-friendly SMS, email and tweets potentially saving millions in printing costs for
corporate.

Vision & Mission


"To be a globally respected corporation that provides best-of-breed business solutions,
leveraging technology, delivered by best-in-class people."

"To achieve our objectives in an environment of fairness, honesty, and courtesy towards
our clients, employees, vendors and society at large."

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Values

We believe that the softest pillow is a clear conscience. The values that drive us
underscore our commitment to:

 Customer Delight: To surpass customer expectations consistently


 Leadership by Example: To set standards in our business and transactions and be an
exemplar for the industry and ourselves
 Integrity and Transparency: To be ethical, sincere and open in all our transactions
 Fairness: To be objective and transaction-oriented, and thereby earn trust and
respect
 Pursuit of Excellence: To strive relentlessly, constantly improve ourselves, our
teams, our services and products to become the best

A Magnet for the Best Global Talent


Fortune magazine identified Infosys among the top companies that "inspire, nurture and
empower a new generation of global leaders." We are committed to remain among the
industry's leading employers.

Awards and Recognition


Reputation Institute’s Global Reputation Pulse 2009 ranked Infosys among the world’s
top 50 most respected companies.

It has been rated the ‘Best Outsourcing Partner’ for the third consecutive year by the
readers of Waters magazine in its annual survey on best service providers to banking
and capital markets firms.

Infosys BPO won the ‘ASTD Excellence in Practice Award’ that honors a practice of
diversity for enhanced performance, and recognizes corporate programs to address
issues on intercultural, gender or sexual orientation .

Infosys BPO also earned the highest rating, Level 5, for the e-Sourcing Capability Model
(eSCM-SP: v2.0) from Carnegie Mellon University's IT Services Qualification Center.

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Key Milestones
 In 1987 Infosys got its first foreign client.
 In 1993, Infosys became a public limited company and received ISO 9001/TickIT
certification.
 In 1999, Infosys crossed $100 Million and was listed on NASDAQ.
 In 2006, Infosys completed 25 years of its existence and its revenues crossed $ 2
billion.
 Today Infosys has more than 1,03,078 employees and has presence in more than
 20 countries across the world. Its corporate headquarters is in Bangalore.

STP Analysis
Segmentation
Market segmentation is a process that segments a market into smaller submarkets,
called segments. Segments are to be homogeneous or have similar attributes.
Purchasing patterns and trends can appear prominently in certain segments. Good
market segmentation is to create segments where prominent patterns can emerge.
Market segmentation may be used to analyze the followings;
• Market responsiveness analysis: This is very useful in direct marketing since
market responsiveness of product offerings can be readily available.
• Market Trend Analysis: Analyzing segment-by-segment changes of sales revenues
can reveal market trends. Trending information is vital in preparing for ever-
changing markets.
Segmentation offers deals with a specific function within the enterprise such as data
processing, accounting, human resources, plant maintenance, engineering design,
manufacturing, inventory control, etc. This is the most likely domain for a product
or service, but you must recognize that the other domains may also get involved if
the purchase of the product or service becomes a high profile decision.

This purchase decision will be made by the prospect's functional management.

Targeting

Software major Infosys Technologies Ltd, which offers its core banking solution
under the brand ‘Finacle’, is targeting regional rural banks to achieve higher growth,
a top company official said here Wednesday. “There are over 90 rural banks in India.
We have a solution called ‘The Finacle Bank in a Box’ for this segment,” Haragopal
Mangipudi, vice-president and business head of Finacle, told reporters.

On the market potential, he said: “The expenditure that each rural bank would have
to make would depend on its existing level of automation. We are in talks with
several rural banks for business.”

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Mangipudi added that the IT service providers would benefit a great deal if more
people from rural areas were included in the banking services, and Infosys has
formulated policies to help banks in this regard.

“We have developed a platform called Finacle Financial Inclusion, and are in talks
with several banks,” he said.

The solution will be deployed by a third party who will do the banking transaction
on behalf of different banks as the model is expected to be cost-effective, he said.

If millions of people are made to open bank accounts under financial inclusion
scheme, the revenues of software companies would see a dramatic boost, Mangipudi
said.

He added that the core banking solution companies would not see any drastic fall in
revenues due to the financial crisis.

Positioning

From Cheap Services To Globalized Business Technology

Infosys is seeking to move away from its image as a cheap Indian offshore service
factory to that of a global business technology (BT) leader. The company is investing
in measures to enhance its visibility and footprint across a wider group of client
stakeholders and markets. The aim is to position Infosys as a prototype for
successful companies in a globalized market environment. While Infosys can
justifiably point to its ongoing business growth as a major success story, its
corporate positioning suffers from inconsistencies in its underlying messaging.
Furthermore, its product positioning continues to mainly focus on technology and
cost-related benefits, which represents a disconnect with Infosys' corporate
ambitions.

Competition
Industries Where Infosys Competes

 Computer Services.
 Information Technology Services (primary).
 Business Services.
 Consulting.
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 Staffing Outsourced Human Resources Services.

Infosys competitors include

 Satyam
 Tata Consultancy
 Wipro Technologies

Comparison with competitors


Companies Last Price Market cap Sales Sales Total assets
(Rs crores) Turnover Turnover

Infosys 2,267.40 129,935.44 20,264.00 5,819.00 17,809.00

TCS 560.35 109,672.88 22,404.00 4,696.21 13,486.62

Wipro 550.95 80,750.42 20,987.30 2,973.80 17,528.90

In the future they expect competition from firms establishing and building their offshore
presence and firms in countries with lower personnel costs than those prevailing in
India.

S.W.O.T. Analysis
Strengths

 Cost advantage – Presence of Infosys in India is key to its success


 Breadth of service offering – end to end solutions including high end services like IT
consultancy and KPO
 Quality and maturity of process – Infosys has quality standards such as CMM Level 5i
to differentiate from other competitors
 Global and 24/7 delivery capability – excellent internet backbone and
telecommunications facilities enabling companies to develop 24/7 delivery
capabilities from India itself.

Weaknesses

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 Excessive dependence on USA for revenues – US Companies are cutting down IT
budget hence revenues to be hit hard for Infosys
 Excessive dependence on BFSI sector for revenues – Banking sector is facing a crisis
globally and is going to spend less on IT
 High rates of attrition – Although slowdown in global economy has lowered attrition
rate but the industry still faces high attrition rates as compared to other sectors.
 Decreasing competitive advantage – rising salary expenses is taking away the cost
advantage enjoyed by Indian companies (including Infosys).

Opportunities

 Greater scope for product innovation


 Increased focus on high end work like consulting and KPO.
 Domestic demand for IT services is to grow at 20 %.
 Greater scope to service domains other than BFSI such as Transportation,
Infrastructure, etc.
 Satyam fiasco – Likely to have positive impact on business considering corporate
governance, possibility of shifting of business, getting higher incremental business
from overlapped clients, and winning new business from new clients.

Threats

 Global economic slowdown may continue for several years – hence low IT spending
globally
 US Govt. against outsourcing
 Shrinking margins due to rising wage inflation
 Rupee-dollar movement affects revenue and hence margins
 Increased competition from foreign firms like Accenture, IBM etc.
 Increased competition from low-wage countries like China, Indonesia etc.

Porters Five Forces Model


Threat of Substitutes
 Other offshore locations – Low Cost Locations like Eastern Europe, Philippines and
China.
 Price quoted is the biggest Differentiator.

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Bargaining Power of Customers

 Large Number of IT Companies vying for projects


 Huge Decline in IT Expenditure

Barriers to Entry

 Low Capital Requirements


 Large value chain for small enterprises
 MNCs are ramping up capacity and employee strength.

Bargaining Power of Suppliers

 Due to Slow Down, Job Cuts, layoff & bleak IT outlook


 Demand Supply is not favorable to employees
 Availability of vast pool of talent.

Rivalry among Firms

 Low Cost
 Commoditized offering

Ansoff’s matrix
Current market New market

Current product Market penetration Market development


strategy strategy

New product Product development Diversification strategy


strategy

BCG Matrix
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Marketing strategies
 A key marketing strategy for Infosys has been "always believe in doing unusual stuff,
and thereby be in a position to secure our future and growth".
 Right from the beginning, they realized they had to focus on selling more and more
in the marketplace. So they hired smart people to sell in the markets in the US,
Europe etc. 

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 They were the first Indian company in the software industry to create a wonderful
global customer meet,"
 They benchmark their proposals with the best in the world. 
 The value proposition they give to the customer is generally world class.
 The people that they put in front of the customer right from day one to the last is
generally top class, well prepared, they have done due diligence, crossed and are
extremely customer-friendly, very competent. 
 They try and look at business value to the customer.
 Tremendous focus on quality within the company. They get into details on how they
are improving productivity, quality, and cycle time.
 They focus is on reusability, reusing the knowledge on the database systems.

Infosys- Corporate Level Strategy

 Global Delivery Model: Producing where it is most cost effective and selling where it
is most profitable.
 Moving UP the value chain: Getting involved in a software development project at
the earliest stage of the life cycle.
 PSPD Model: “Predictability of Revenues, sustainability of revenues, Profitability, De-
Risking” for Risk management.
 Expansion into low cost countries like Mauritius, Philippines, Thailand, Mexico etc.
 Improved Quality capabilities -> CMM Level5i.
 Emphasis on delivering high value services.
 Currency hedging for predictability of revenues.
 Investing heavily in training centers.

Infosys – Generic Strategy


1. Low cost Global delivery 24/7 Model
Little differentiation in low-end service of value chain; high differentiation in high end
services in value chainlike software products and package solutions.

2.Focus on Quality, Customer relationship management, timely delivery.

Other Strategies

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CONCENTRATION: 90% of Infosys revenues from American and European nations.
VERTICAL INTEGRATION: Infosys recently made a bid to acquire a European major –
Axon consultancy to improve its business in European markets, but finally called off the
deal due to high valuation. Otherwise, Infosys has always believed in organic growth.

INNOVATION: The Software Engineering and Technology Labs (SETLabs) at Infosys is


the center for applied technology research in software engineering and enterprise
technology.
SETLabs conducted 24 Innovation Workshops with customers from the US and
Australia, to identify research collaboration possibilities. Infosys promotes a favorable
work environment that encourages innovation and meritocracy.

Future plans
Infosys Technologies is planning to acquire IT companies serving energy and health care
sectors in geographies as diverse as Latin America, Europe and Australia. The company
has set aside US$450-500 million for the purpose. 

The acquisition will help Infosys to diversify its client base, especially at a time when
growth has been flat from traditional revenue streams like banking, financial services
and insurance sector, besides retail and manufacturing.

Infosys Technologies wishes to expand its presence in Hyderabad in 550 acres of land in
the next 10 years to create a new state-of-the-art campus. The Government of Andhra
Pradesh has already identified 150 acres for Infosys and the balance of 400 acres will be
identified in the near future. They intend to invest Rs. 1250 crore. Infosys plans to invest
Rs. 450 crore in the first phase of the project and invest Rs. 400 crore each, in the
second and third phases of the project.

 Infosys Technologies Limited plans to go to campus recruitment across the country next
year. The company plans to hire 25,000 people with nearly 18,000 people to be hired
from various campuses in the country, taking the total number of employees from the
present 91,187 to over 100,000.

 Infosys Technologies Limited plans to focus more aggressively on ERP solution like
oracle and SAP. It intends to aligned global sourcing strategy with business strategy.
Plans to enhance operational efficiency and delivering value added services. Structuring
processes and services into modules thus leading to enhanced flexibility and
productivity. Expanding into high end consulting.

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Key Success Factors
 Sound Management Skills
 Nurturing Working Atmosphere
 Commitment to Values, Speed, Imagination and Excellence
 Personnel Management
 Infrastructure

 Investment in well understood, proven product & not just R&D.


 While dealing with investors, always underpromise and over deliver.
 Have a healthy sense of paranoia and respect for the competition.

Our Strategies
 As most large clients in US and Europe are cutting costs, Infosys needs to be more
aggressive on cost and quality front.
 Since India, Middle-east and Australia are fast developing IT market, Infosys needs a
paradigm shift in focus from US and EU markets to these markets for current
products like ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and
retail) and software products.
 Concentrate on building expertise in these (Consultancy and package
implementation services in relatively growing sectors esp. healthcare, life sciences
and aviation sector, and KPO services) domains by strategic acquisitions.\
 Changing Brand image from low value service provider to high value service
provider.

Conclusions
 Do not put all eggs in one basket:
 Provide higher end services in value chain.
 Shift in focus from low cost advantage to high quality services
 Consolidation and Strategic acquisitions are essential for future growth of revenues.
 Quick adoption to high growth markets is necessary.

Headquarters &Branches
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Its corporate headquarter is situated in Bangalore

Branches in India Branches in abroad


 Bhubaneshwar  America
 Chennai  Australia
 Jaipur  Europe
 Mysore  Middle East Africa
 Chandigarh
 Mangalore

 Hyderabad
 Mumbai
 Thiruvananthapuram
 New Delhi
 Gurgaon
 Pune

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