Swot Analysis Infosys

Infosys is one of the largest businesses in India with a turnover in excess of $4 billion in 2008. The company
specializes in Information Technology (IT) and consulting. N.R. Narayana Murthy and six others started the company
in 1981, and it is now the largest IT company in India with its headquarters in Bangalore (although it was started in
Pune). It employs more than 90,000 IT professionals and was famously rated 'Best Employer in India.' It operates in a
number of business sectors from banking to retail, and its services tend to encompass end-to-end IT solutions which
includes a whole bundle of added-value solutions from infrastructure to software engineering.

Strengths
 Since the company is based in India its competitive advantage is enhanced. The Indian economy, despite
weak economic indicators such as relatively high rates of inflation, has low labor costs. The workforce has relatively
high skills levels in Information Technology. Couple these two elementstogether and you have an operational basis
that offers low-cost based, highly skilled competitive advantage. Trained Indian personnel often speak very good
English and are sensitive to Western culture, underpinned by India's colonial past.

 Infosys is in a strong financial position. The business turned over more than $4 billion in 2008. This means
that it has the capital to expand, and also the basis to leverage potential investors.

 The company has bases in 44 global development centres, most of which are located in India, although the
company has offices in many developed and developing nations. This means not only that Infosys is becoming a
global brand but also that it has the capability to support the global operations of multinational clients.

Weaknesses
 Infosys on occasion struggles in the US markets, and has particular problems in securing United States
Federal Government contracts in North America. Since these contracts are highly profitable and tend to run for long
periods of time, Infosys is missing out on lucrative business. Added to this is the fact that its competitors do well in
terms of securing the same Federal business (and one should also take into account that many of its competitors are
domiciled in the US and there could be political pressure on the US Government to award contracts to domestic
organizations).

 Despite being a huge IT company in relation to its Indian competitors, Infosys is much smaller than its global
competitors. As discussed above, Infosys generated $4 billion in 2008, which is relatively low in comparison with
large global competitors such as Hewlett-Packard ($91 billion), IBM ($91 billion), EDS ($21 billion) and Accenture
($18 billion).

 It is sometimes argued that Infosys is weaker when it comes to high-end management consultancy, since it
tends to work at the level of operational value creation. Competitors such as IBM and Accenture tend to dominate this
space.

Opportunities
 At a time of recession in the global economy, it may appear that some companies will reduce take up of
services that Infosys offers. However, in tough times clients tend to focus upon cost reduction and outsourcing - with
are strategies that Infosys offers. So hard times could be profitable for Infosys.

 There is a new and emerging market in China as the country undergoes a huge industrial revolution.

 The strategic alliance between Infosys and Schlumberger gives the IT company access to lucrative business
in the gas and oil industries.
 There has been a trend over recent years for European and North American companies to base some or all
of their operation in India. This is called an offshore service. Essentially there is a seamless link between domestic
operations and services hosted in India. Examples include telecommunications companies such as British Telecom
and banks such as HSBC that have customer service and support centres based in India. Think about the times that
you have made calls to a support line to find that the adviser is in Mumbai or Bangalore and not in your home market.

Threats
 India is not the only country that is undergoing rapid industrial expansion. Competitors may come from
countries such as China or Korea where there are large pools of low-cost labor, and developing educational
infrastructures such as universities and technology colleges.

 Customers may switch to other offshore service companies in other countries such as China or Korea.

 Other global players have realised that India has the benefit of low-cost, highly-skilled labor that often
speaks English and is culturally sensitive to Western practices. As with all global IT players, Infosys has to compete
for skilled labor and this may have the effect of driving up wage levels, and making it more difficult to recruit and
retain staff.

Bibliography
Wiki - Infosys 
Infosys's own official site
Business Today - The Best Companies to Work for in India