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SUBMITTED TO: Prof. Suhas Rane
Shiv Kumar Chaudhari
Anushree Goyal (106)
Shahid Hussain (107)

Ravi Rai (115)
IT, MBA (Tech.)






















McKinsey’s 7 S Model









Corporate level strategies:










Opportunities in IT INDUSTRY









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As a proportion of national GDP.2 per cent in FY1998 to an estimated 5.” the industry is expected to witness sustainable growth over a two-year horizon. going past its USD 60 billion export target in FY2011.76 million employees.23 million. the sector revenues have grown from 1. . with a slowdown in GDP growth to seven per cent. while indirect job creation is estimated to touch 8 million. Concentrated efforts are required by all stakeholders to address the current challenges. India has retained its leadership position in the global sourcing market. significant complexity and uncertainty is getting attached to the unprecedented economic crisis.7 billion in FY2009. resulting in net overall momentum. While the industry has significant headroom for growth. Software and services exports (including BPO) are expected to account for over 99 per cent of total exports. Hence. The Indian IT-BPO industry is estimated to achieve revenues of USD 71. The focus and exponential growth in the domestic market has partially offset this fall and insulated the country. and adaptation in the service offerings portfolio.8 per cent in FY2009. and maintains its leadership position. The IT-BPO industry in India has today become a growth engine for the economy. to ensure that India realizes its potential. This growth has been fueled by increasing diversification in the geographic base and industry verticals. employing over 1. the Indian IT-BPO industry has displayed resilience and tenacity in countering the unpredictable conditions and reiterating the viability of India‟s fundamental value proposition. During this period. While the effects of the economic crisis are expected to linger in the near term future. to achieve the vision of a “young and resilient” India. competition is increasing. The Indian economy has also been impacted by the recessionary trends. an addition of 226. While the current mood is that of “cautious optimism.INTRODUCTION In an increasingly globalised world. contributing substantially to increases in the GDP. with a number of countries creating enabling business environments aimed at replicating India‟s success in the IT-BPO industry. During the year. the sector maintained its double digit growth rate and was a net hirer. with the IT software and services industry accounting for USD 60 billion of revenues. Consequently. direct employment is expected to reach nearly 2. urban employment and exports.000 employees.

3.S. decided to give more IT projects to Indian IT companies. government has declared that U. Mildly positive Mildly positive 5. 2. the layoffs and job-cuts have resulted in low attrition rate. Real Estate Prices: Decline in real estate prices has resulted expenditures. Political stability: Indian political structure is Politi cal considered stable enough expect the fact that there is a fear of „hung parliament‟ (no clear majority).S. Domestic IT Spending (Demand):Doemestic Econo mic 3.4 ENVIRONMENTAL SCANNING EXTERNAL ENVIRONMENT . Global IT spending (demand) 2. Positive .S companies that outsource IT work to other locations other than U. Attrition: Due to recession.PESTLE ANALYSIS Positive 1. Government owned companies and PSUs have 4. U. Terrorist attack or war.NASSCOM Currency Fluctuation 4. ECOMONIC ATTRACTIVENESS due to cost advantage and other factors. 6. 1. market to grow by 20% and reach approx USD 20 billion in 2008-09 . reducing the rental Deep Negative Positive Negative Negative Positive Negative. will not get tax benefit.

Figu re: Bre ak up of Tota l Glo bal IT Spe ndin g 5 .The Global IT spending is expected to decline steeply below the expected levels of $869 billion by 2010.

Education: A number of technical institutes and universities over the country offer IT education. 3. Working age population . English medium being the most accepted medium of education. 2. India boasts of large English speaking Highly Positive Positive population.India continues to the leader in terms of “Financial Attractiveness” Figure: Financial Attractiveness of Top 5 Global Services Locations on a scale of 4 Highly positive 1. Language Socia l spoken: English is widely spoken language in India. Thus.

to meet industry requirements Figure: Number of IT graduates in India 6 .India creates a large pool of skilled IT professionals each year.

As per NASSCOM Strategic Review report. India is one of the few countries to have an increasing share of working population. . Hi gh def init ion content. 0. etc and innovation in low cost technologies is presenting new challenges and opportunities for Indian IT industry. Techn o logica l Fig ur e: W or kin g Po pul ati on as a pe rce nt ag e of To tal po pul ati on 3. grid computing. We b 2. Ne w IT te ch no lo gi es : Tec hn olo gie s lik e SO A.

Highly Positive Positive 7 P o s i t i v e .

Contr 5. etc. surrou requir . related to security of data in transmission and storage. IT Act: Indian government is strengthening the IT act. 2. 1 . I T c o m p a n i e s c a n s e t u p S E Z w i minimum area of 10 hectares and enjoy a host of tax benefits and fiscal benefits. Companies operating in Software Technology Park (STPI) scheme will continue to get taxbenefit till 2010. 2000 to provide a sound legal environment for companies to operate esp. I T S E Z r e q u i r e m e n t : Leg al 4.

Positive Negative Positive En vir on me nta l M il d l y p o s i t i v e .

etc. utilization. 8 .Energy Efficient processes and equipment are focusing on reducing the carbon footprints. water consumption.

5 10.5 13.3 8.7 3.5 $ Billions FY 2008 31.5 2.8 23.0 3.0 1.1 0.3 .1 0.3 18.5 6.7 22.1 7.9 17.4 16.9 FY 2005 13.6 39.3 3.0 12.5 4.9 1.4 7.5 7.7 23.8 Figures in US FY 2006 FY 2007 17.0 4.5 6.5 0.2 9.6 31.5 10.6 0.9 1.2 4.2 52.5 5.3 6.9 12.5 5.1 3.0 23.1 5.3 4.4 3.3 40. Software Products -Exports -Domestic Total Softwareand services revenues -of which Exports are FY 2004 10.6 8.3 2.OPERATING ENVIRONMENT Current Position of IT – ITES Sector of India INDIAN IT INDUSTRY SECTOR IT Services -Exports -Domestic BPO -Exports -Domestic Engineering Services and R&D.3 2.3 30.9 1.4 0.6 3.

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MARKET SIZE: More than 80% of revenues come from Exports and only 20% from domestic business Figure: Revenues from domestic and export (in USD billion) IT industry contributes to around 5.1. Figure: Contribution of IT industry to Indian GDP IT industry provides direct employment to more than 20 lakh people.. indirect employment number goes far beyond.2% to Indian USD 1 trillion GDP.!! .

Figure: Number of employees in IT Sector (Direct employment) 10 .

With the decline in these sectors. hurting the bottomline . MARKET SHARE: Indian IT market is dominated by a few large companies with presence of a number of small and medium companies Figure: Indian IT industry Revenue Break-up by company Sources of Revenue: IT industry is largely dependent on Banking and financial industry. the revenue from these is expected to decline.2.

of IT majors. Figure: Indian IT industry Revenue Break-up by sector 11 . This calls for exploring new verticals.

BT (British Telecom) is . Australian Govt. BMC. Infosys and other Indian companies are lack in R&D spending. BPCL. CUSTOMER PROFILE: Sector Major Clients . Figure: Indian IT industry Revenue Break-up by Country of Presence (Geography) As compared to International IT giants. ONGC Saudi and Kuwait Govt. and public Sector Companies Railways.Domestic Major Clients . LIC.. British Govt. Figure: R&D Spending of IT majors.Global (Export Market) Govt.Revenue By Geography The Americas and Europe continue to be the key markets for the Indian ITITeS sector.. MMRDA. 3.

Max New York life. Exon Moblile Pfizer. UBS. India Bulls Financial Airtel. ABN AMRO India. Goldman Sachs. JP Morgan. Barclays. British Airways Infosys’ largest client – contributi ng 6. DLF. RIL Pantaloon India Ltd. Telstra. SingTel. 12 . Vodafone Ford Motors. Tata Sky. Bank of America. NSE.9% to Infosys revenue. BSE. AT & T. Morgan Stanley British Telecom. Apollo Hospital AIG. Vodafone. ICICI Bank. GM. Walmart.BFSI Telecom Manufacturing Others HDFC. Citi Financial India. L & T. Reliance Communications Tata Motors. Tata Steel.

Ma Foi. Infosys. Atos Origin 4. Qantas. Satyam. Employees/Professionals. Wipro. Quest. etc. National Australian Bank JAPAN – Nissan Motor Corp INDIA – LIC UK – Dept. Ministry of Justice (Worth US $ 2-3 Billion ) Most Likely IT Players/ Short – listed Companies Infosys. of works and pensions. EDS TCS. Infosys. Infosys.Recent Announcement of Large IT Projects:Region / Company AUSTRALIA – Telstra. HM Revenue and Customs. Wipro.Accenture. L&T Infotech TCS. Manpower suppliers like Manpower ITeS. SUPPLIERS: 1. 2. IBM. Wipro. Patni TCS. .

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the new spendi ng from these has reduc ed treme ndousl y. Price quoted for projects is a major differentiator. 2. s– differentiation' the job-cuts. Availability Barriers to Entry expen of vast talent diture: pool – freshers Indian 1. supply of IT project professionals is s. However. 'low-cost. the Philippines and China. Bargaining Power of Customers: 1. Due to 2. Low capital and experienced. e in IT 3. resultin positioning. Other offshore locations such as Eastern Europe. sector is depend 2.PORTER’S FIVE FORCES MODEL (INDIAN IT INDUSTRY) Threat of Substitutes: 1. the layoffs g in 3. and with the recent financi al crisis. Large value chain ent on space for small USA enterprises. . and BFSI in 3. no longer that Huge favorable to declin employees. IT requirements. high industry growth and bleak IT high 4. Commoditized High for IT low offerings 1. this should have an impact only in the medium to long term. the quality of products being same. compet – few numbers of large 2. MNCs are ramping up particul capacity and employee ar for m reven ues. little-project slowdown. 3 . 2. Demand and ition for companies. are emerging and are posing threat to Indian IT industry because of their cost-advantage. H o w e v e r . Large numbe r of IT Shift Bargaining from RIVALRY AMONGcompa power of nies high FIRMS: High Very supplier: vying to 1. Strong competitors outlook.

for the e x i st i 1 5 .

SWOT ANALYSIS i v e C o s t a d v a n t a g e – m o s t f i n a n c i a l l y a t t r a c t d e s t c i STRENGT o n HS u a n t t i r o y n s i Bread n th of a s t u d y b y A T K e a r n e y o n g l o b a l I T servic e offeri ng – end to end solutio ns includi ng high end servic es like IT consul tancy and KPO Ease of scal abili ty – more than half of India ‟s popu latio n is less than .

2 5 y e ar s ol d. E n gl is h sp e a ki n g IT – IT E S pr of es si o n al s gr o wi n g at a g o o d p ac e Q ua lit y an d m at urity of proce ss – many player s have qualit y stand ards such as CMM to differe ntiate from other low cost advan tage countr ies Glob al and 24/7 deliv ery capa bility – excell ent intern et backb one and teleco mmu nicati ons faciliti es enabli ng comp anies to devel op 24/7 delive ry capa bilitie s from India itself .

e bud n get u WEAKNESSE hen e S ce s rev – enu B Ex es a ces to n siv be k e hit i de har n pe d of g nd Indi s en an e ce IT c on fir t US ms A o for r E rev i x en s c ue f e s a s c – s i i U v n S g e a d C c e o r m p i p e s a n i n d s e i g e n l s c o e b a o a r n ll e B y F c S a u n I t d s t i e i s c n g g t o o i r d n f o g w o t n r o r s I e p T v .

e n d l e s s o n I T H i g h r a t e s o f a t t r i t i o n – A l t h o u g h s l o w dow n in glo bal eco no my has low ere d attri tion rate but the ind ustr y still face s hig h attri tion rate s as com par ed to oth er sect ors D e cr e a si n g c o m p et iti v e a d v a n t a g e – ri si n g s al ar y e x p e n s e s is ta ki n g a w a y th e c o st a d v a nt a g e e nj o y e d b y I n di .

rn e s n sp d co w OPPORTU or o NITIESpt r ea k t li ti G rek oo ate n erc s. n d t c for hS r IT aa e se nt a rvi y s ce a B e s m F d is S to f I f gr i o ow a s c at s uc u 20 co s % h o G – a n r sL e i h a k T i t e r g e al h y .a . s o e c n rI o s vn pu if e lt cr fo i ea r n s pg dt r a or o n m u d d ac u K ct it P in nu nO sr o e Do v o . m at t es io he tic n et de m rc I an .

g vt eu gl nr ob ue all e THREATS y a. hM b ag e al ai ne c e ns et c t c m o ou . US nI Gl Go dB o vt. ar n ts gi o ou n m rci s ic ng I sl n o S c hr w in r d ki e o n a wg s nm e m ar d gi a c n y s o c d m o u p nte e in to t u ri i si e n t fo g i r w o s a n e g f v e r in er o fl al at m y io e n f arR o s u r –p e e he i e -d g n ol n c la fi e r r lo m m o w s v I e li T m k s e e p nt A e af c n fe c ct di s e n re n i .




and courtesy towards our clients." . delivered by best-in-class people. leveraging technology. honesty.INFOSYS Vision "To be a globally respected corporation that provides best-of-breed business solutions." Mission "To achieve our objectives in an environment of fairness. vendors and society at large. employees.

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86 17.96.562 28.696 48 1 1.2008 Voting Strength (%) American Depository shares 19% Trusts 1% NRIs/OCBs/Foreig n Mutual Funds 3% Banks.18.066 5. financial institutions and insurance companies Foreign institutional investors Private corporate bodies Indian Public NRIs/OCBs/Foreign nationals Trusts American Depository Number of Shareholder s Voting Strength Number of Shares Held (%) 19 184 16.92 9.693 71 4.44.95 1.52 1.50 19.914 2. financial institutions and insurance companies 4% Promoters 17% nationals 3% Indian Public 18% Foreign institutional investors 33% Private corporate bodies 3% Category Promoters Mutual Funds Banks.SHAREHOLDING PATTERN .054 563 33.36 19.778 7.68.914 .52 2.351 10.

562 100.758 20 .shares Total 5.00

5) : Rs.FINANCIAL SUMMARY IFRS Indian GAAP Total Income : Revenues: Net profit after taxes : Net Income after taxes: Earnings per ADS: Total assets: Cash and cash equivalents: Earnings per share (Rs. 98.26 (basic) .

516 crore Cash and cash equivalents Rs.686 crore 21 Infosys always beats stock market expectations. 17. It believes in “delivering more than expectations”.Total assets : Rs. Figure: Infosys Stock performance on NSE over last one year. Revenue Break-up by Geography North America Figure: Revenue Break up by Geography 2008 . 9.

North America Europe India Rest of the world Figure: Revenue growth from different geographica l segments over years. Segment2008 Break up of Revenue by Industry 22 Retail Telecom 21% Figure: Revenue Break up by Industry .Revenues from US have declined and that from Europe improved.

003 2004 2.40 35 Manufacturing Focus must shift from BFSI sector to 30 Banking. 4 % 6 % Revenue break-up by services offered 2008 5% 4% 7% 3% 45% 1% 5% 2 Info sys mus t mo ve up the val ue chai n– con cen trat e mor .005 2006 2. financial services and insurance 25 20 other sectors. Telecom 15 Retail 10 5 others 0 2.007 2008 Figure: Revenue growth from Industry segments over years.

.e in consulting. BPO and KPO Figure: Revenue Break up by Services offered.2008 23 business.

it emphasizes on selecting candidates who find the company ‟s meritocratic culture satisfying. N R Narayanmurthy. and high level of learn ability. it focuses on the quality of the human resources. and builds personal rapport with employees. .65 per cent of its revenues on up gradation of employees‟ skills. For this purpose. continuous sharing of information. we have seen smooth transition from N R Narayanmurthy to Nandan Nilakeni and from Nandan Nilakeni to Kris Gopalkrishnan without any adverse effects on the company outlook and each one has proved to be an able leader taking company forward. There is emphasis on developing leadership qualities among employees. Leadership is based on high business vision and predominantly supportive styles. Top management emphasizes on open door policy. and around 50% as employee costs. technical skills. it has established “Infosys Leadership Institute”. As we have seen over last few years. At the entry level. Staff (Human Resources): Since Infosys is in knowledge-based industry. In spite of thousands of people joining every month.McKinsey’s 7 S Model Leadership Style: Infosys believes that leadership is one of the most essential ingredients of organizational success which is provided by its Chairman. Infosys has been able to maintain its training standard mostly due to its highly matured processes capabilities and investment in infrastructure. The company emphasizes on training and development of its employees on continuous basis and spends about 2. Out of total personnel. superior academic records. takes inputs from employees in decision making. about 90 per cent are engineers.

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In recent years. such as consulting. it provides value added solutions by leveraging its indepth industry expertise. In order to cater its clients. It plans to increase presence in China through Infosys China. This has helped in building an image for quality driven model rather than cost-differentiating model. For new clients. It increases its recurring business with clients by providing software re-engineering. Company does not negotiate over margins beyond a certain limit and some time prefers to walk-out rather than compromise on quality for low-cost contracts. in the Czech Republic and Eastern Europe directly and through Infosys BPO. Enhance solution set: Infosys focuses on emerging trends. it focuses on limited number of large organizations throughout world.2005 2006 2007 2008 Attrition (%) Strategy: Infosys has adopted a client-focused strategy to achieve growth. infrastructure management and business process management services which are long-term in nature and require frequent client contact. business . new technologies. Expand geographically: Infosys plans to establish new sales and marketing offices. Another differentiating factor for Infosys is that it commands premium margins. through Infosys Mexico. Rather than focusing on numerous small organizations. representative offices and global development centers to expand its geographical reach. maintenance. specific industries and pervasive business issues that confront our clients. the company emphasizes on custom-built softwares. it has added new service offerings. in Australia through Infosys Australia and in Latin America. Increase business from existing and new clients: Infosys has focused on expanding the nature and scope of engagements for the existing clients by increasing the size and number of projects and extending the breadth of its service offerings.

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who might have been team leader in one project. sponsorship of and participation in targeted industry conferences. to constantly improve ourselves. sincere and open in our dealings. Pursue alliances and strategic acquisitions: Infosys is known for its organic growth (risk averse) strategy though it has strategic alliance with leading technology providers take advantage of emerging technologies in a mutually beneficial and cost-competitive manner. which are major contributors to its growth. This system not only helps in creating the feeling of equality but also helps in developing project leaders.process management. Enhance brand visibility: Infosys invests in the development of its premium brand identity in the marketplace by participating in media and industry analyst events. telecommunications. our services and products so as to become the best. 3• Pursuit of Excellence: A commitment to strive relentlessly. community outreach programs and investor relations. trade shows. recruiting efforts. Organizational Structure: The company has adopted a free form organization devoid of hierarchies. The core values are: 1• Customer Delight: A commitment to surpassing customer expectations. Everyone is known as associates irrespective of his position in the company. systems integration and management. thereby earning trust and respect. 2• Leadership by Example: A commitment to set standards in business and transactions and be an exemplar for the industry and teams. Software development is undertaken through teams and the constitution of teams is based on the principle of flexibility.transportation and logistics industries. 1• Integrity and Transparency: A commitment to be ethical. retail. 2• Fairness: A commitment to be objective and transaction-oriented. In fact its tagline depicts how much emphasis it lays on core values. may be replaced by another member of the same team for another project. A member. manufacturing. our teams. 26 . Shared Values: Values are important part of Infosys‟s organizational culture. infrastructure Develop deep industry knowledge: Infosys has specialized industry expertise in the financial services.


Infosys has entered the Balanced Scorecard Hall of Fame for Executing Strategy for achieving breakthrough performance results using the Balanced Scorecard (BSC). This is just one of the initiatives taken by Infosys which signifies the efforts taken for building competencies. . domain as well as technical. Infosys has made it mandatory for every employee 7uto clear a predefined certifications.Skills: From last year. in order to be eligible for appraisal. Infosys has been CMM-Level 5 certified for its process capabilities. Apart from internal initiatives like knowledge management.

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Only 1 % of .SWOT ANALYSIS OF INFOSYS B r a n d a n STRE d NGTH SL o Leaders n g hip in sophisti S cated solution ta n s that enable di clients n to g optimiz Cl e the ie efficien nt cy of R their el busines at s io Proven n “Global delivery s hi model” p Commi s tment Status to as an superi employe or r of qualit choice y and Ability proces to scale s Innova executi tion and on leadershi p S t r o n g WEAK NESSE S Excessiv e depende nce on US for revenues – 67 % of reven ues from USA Exce ssiv e dep end ence on BFSI sect or for reve nues – 36 % of reve nues from BFSI Weak player in domes tic marke t.

E x p a n d n e w g e o g r a p h i e s e n d s er vi c e s li k e C o n s ul ta n c y a n d K P O . 9 % to 44. e t c I nf o s ys is c a s h ri c h (A ro u n d U S $ 1 Bi lli o n) A c q ui ri n g c o m p a ni e s to in cr e a s e e x p .reven ues from India – low as compa red to peers Low R &D spend ing as comp ared to global IT comp anies – only 1. M i d d l e E a s t. – E u r o p e . 8 % of rev en ue s Lo w ex pe rti se in hig h i n g i OPPO n RTUN t ITIES o Do mest ic mar ket set to gro w by 20% .3 % of total reven ues Ris ing wa ge bill – 42.

erti se in Co ns ult anc y. H i g h . p r i c i n g p r e s s u r e a n d r i s i n g w a g r e t s e in THREATS c I h n n di o a l a o n g d y o v e rs e a s I n t e n s e c o m p e t i t i o n i n t h e m a r k e t f o s e r v i c e s c o u l d a f f e c t c o s t a d v a n t a g e s . T h e e c o n o m i c e n v i r o n m e n t . KP O an d pac ka ge im ple me nta tio n cap abil itie s Op eni ng offi ces and dev elo pm ent cen ter s in cos t adv ant age cou ntri es suc h as tho se in La tin A m eri ca an d Ea st er n Eu ro pe .

an d th e lo ss of an y on e of th e m aj or cli en ts co ul d si gn ifi c a n tl y i m p a c t b u s i n e s s . 28 . F a il u r e t o c o m p l e t e fi x e d p ri c e .d e p e n d e nc y on a s m all nu m be r of cli en t fluc i tua mtion es f rT ae mr em i cn oa nti to rn ao cf tC s li we in tt hc io nn t br ua dc gt es tc aa nn dt y op nic a t ll iy mb ee t e r m i n a t e d w it h o u t c a u s e a n d w it h li t tl e o r n o n o ti c e o r p e n a lt y . fi x eCur dren .

EU. consultancy companies in domains of Package implementation. Technology and quality advantage. Expertise Not used to very high of several years.) New to Low High capital to expand through large cost services acquisition. . High-end Services in value chain. Expertise in several attrition verticals (transportation. Acquisition of KPOs. THREATS Diversification: Increase business from existing clients. SWOT ANALYSIS OF IBM INDIA STRENGTHS WEAKN ESSES Late entry into india. and service more verticals like Airlines. BPO. IT Middle-east. model. and software products into emerging markets – India. Telecom. rates. aviation.SWOT MATRIX OPPORTUNITIES STRENGTHS WEAKNESSES Aggressive strategy for expansion of ADM. healthcare. etc. construction and utilities. healthcare. New working environment. Manufacturing and telecom Divestiture: Drop consultancy business in domains of transportation. Less number of highly talented workforce (As compared to global employees). Retail. BFSI.

pricing pressu re and rising wages in India THREA TSand oversea s Intense competi tion in the market for technolo gy services could affect cost advantag es. Can provide more services to global clients from lost location Replicate the low cost model of Indian IT companies Can provide low end ser vice s of val ue cha in fro m Indi a The eco no mic env iron me nt. Currency fluctuation s Global Slowdown of economy .OPPORTUNITIES Domestic Indian market set to grow by 20%.

BUSINESS MODEL Saas Learning Consulting Business Process 2008 management IT Outsourcing Systems Integration Independent Validation Services Infrastructure Management 2001 Product Life-Cycle management Technology Consulting Technology Enabled BPR 199 6 Enterprise Solutions Application Developemnt and Maintenance Software Reenngineering People | Organization | Infrastructure | Process | Quality Infosys Global Delivery Model Figure: NEXT GENERATION BUSINESS MODEL 1981 .

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.ANALYSIS OF STRATEGIES OF INFOSYS Corporate level strategies: Firm believer in Core “Organic Strategies: growth” and acquire only those Global companies in Delivery Model – line with Producing strategic goals. Sustainabilit y of Revenues. where it is most cost effective to produce & selling where it is most profitable to sell. PSPD Model – “Predictabilit y of Revenues. Profitability. Moving up the Value Chain – Getting involved in a software developme nt project at the earliest stage of its life cycle. De-risking” for risk management .

software products and package 2 solutions. Improv o m ed ai quality nt capabili ai ties – n lo CMM wlevel 5i co compan st y. high differentiation in o high end d services of e value chain like l. Invest Global ed in delivery 24/7 Mhain. timelydelivery. i n l o w e n d s e r v i c e s o f v a l u e c 32 . Has Cz ec hedged h currenc Re y for pu more bli c. ad va 4. . predict Ma ability uri of tiu revenu s. in 5. Low xic cost o. Pol es (risk an manag d. 2. T 3. Ph ilip pi ne s. L i 3. customer relationship management. GENERI Th C ail an STRATE d GIES: an d Me 1. ement).develop ing Actions training Taken: centers 1. t t l e d i f f e r e n t i a t i o n Focus on quality. Infosys nt Consult ag ancy e establis th ey hed to ha provide ve high op end en service ed off s in ice value s chain.

KPO. Recommendation: As most large clients in US and Europe are cutting costs. consultancy services (in BFSI. manufacturing and retail) and software products (financial products). Recommendation: Since these are fast developing IT market. BPO. Result of strategy: Unlikely to yield good results MARKET DEVELOPMENT STRATEGY: New Market: India. .GRAND STRATEGIES: Ansoff‟s Matrix: Current Product New Product Current Market Market Penetration Strategy Product Development Strategy New Market Market Development Strategy Diversification Strategy MARKET PENETRATION STRATEGY: Current Markets: USA and Europe Current Products: ADM. (better the company acquired. consultancy services (in BFSI. KPO. Infosys needs a paradigm shift in focus from US and EU markets to these markets. healthcare. Recommendation: Concentrate on building expertise in these domains by strategic acquisitions. Result of strategy: Likely to yield good result. PRODUCT DEVELOPMENT STRATEGY: Current Market: USA and Europe New Product: Consultancy and package implementation services in relatively growing sectors esp. life sciences and aviation sector. the better the result). Infosys needs to be more aggressive on cost and quality front. Middle-east and Australia Current Product: ADM. Result of Strategy: Likely to have good result. BPO. manufacturing and retail) and software products (financial products). and KPO services.

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SETLabs conducted 24 Innovation Workshops with customers from the US and Australia. Recommendation: Changing Brand image from low value service provider to high value service provider. Infosys has always believed in organic growth. Middle-east and Australia New product: Consultancy and package implementation services in relatively growing sectors esp. but finally called off the deal due to high valuation. Result of Strategy: Difficult to achieve overnight (possible in long term) OTHER STRATEGIES: CONCENTRATION: 90% of Infosys revenues from American and European nations. healthcare. life sciences and aviation sector. to identify research collaboration possibilities. and KPO services. . Infosys promotes a favorable work environment that encourages innovation and meritocracy. VERTICAL INTEGRATION: Infosys recently made a bid to acquire a European major – Axon consultancy to improve its business in European markets. Otherwise.DIVERSIFICATION: New Market: India. INNOVATION: The Software Engineering and Technology Labs (SETLabs) at Infosys is the center for applied technology research in software engineering and enterprise technology.

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SUB-PRIME MORTGAGE CRISIS POST SUB-PRIME MORTGAGE CRISIS GRAND SUCCESS Organic growth strategy will only lead to loss of competitive edge & competitors will overtake soon It has grown from under US $ 1 billion to more than US $ 4 billion revenues in less than a decade. RECOMMENDATION: Consolidation and strategic acquisition 1• H Infosys Global Slowdown Likely impact i g h l y d e p e n d e nt on export revenues (99% revenues from oversees business) 2• Cost cutting reducing expenditure almost companies 3• Negative and IT by all in short to medium term .STRATEGY SUCCESSFUL OR NOT…?? Infosys is a one of the most successful Global IT Company. Reasons:- Reasons: Acquisition by IT companies increase revenues but negatively impacts bottomline. It was also the first IT Company from India to be listed on NASDAQ stock exchange.Most favored company by Investors „Underperfomer‟ rating by most brokerages – to be seen „cautiously‟. PRE. Always a „BUY‟ . IT Services Market has matured  Consolidation amongst IT players is key High margins eroding  no longer 30 % margins possible Difficult to add revenues organically  due to global slowdown Infosys avoided acquisitions and maintained the margins.

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BT has taken £ 340mn write-downs.CASE STUDY BRITISH TELECOM – Largest client of Infosys in terms of revenues contributed – (9. . Thus future BT strategies can have one of the following impacts on Infosys: SCENARIOS AND IMPACT BT will remain to be a wild card for Infosys. CONCLUSION: The global slowdown will impact the revenues of Infosys as it is dependent on large international behemoths (which are in troubled waters). However.1% of total revenues in FY2008).

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Shift in focus from Low cost advantage to high quality services. Provide more high-end services in value chain (3rd WAVE in IT) There is a move required from ADM (Application Development and maintenance). Consolidation and strategic acquisitions are essential for future growth of revenues. 4. 2. 3.LESSONS TO DRAW 1. . Quickly adapt to high growth markets is necessary: In FY2008. etc. 5. “Do not put all eggs in one basket” Companies must provide diverse services to refrain from being overdependent and increasing exposure to the vulnerabilities of few sectors/companies/geographies. unlike other IT companies. BPO to Consulting and Package Implementation. Indian domestic market grew by 20%. but Infosys revenue from India declined to 1%.

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Opportunities in IT INDUSTRY This represents huge opportunities for Indian IT players in consulting domain. .

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Indian IT/ITes Industry: Impacting Economy and Society: 2007- 08 – A NASSCOM and DELIOTTE Study 2.2008-09. Economic Times 2. 2008. 2004-05.moneycontrol.infosys.nasscom. 5. 2006-07. 2. 2008 Emerging Destinations for IT/ITeS Industry – NASSCOM and KPMG Report. Outlook Money Websites: 1. 3. Newpapers: 1. Business Week 2.php#schemes . 6. 2005-06. 2003-04. www. 2007. Infosys .com www. Infosys – 2008-09. www. NASSCOM – McKinsey Report – www. Annual Reports and Quarterly reports. 2007-08. NASSCOM Strategy Review – 2007-08.REFERENCES Research Reports: and www. 2006-07. 6. IT/ITeS – Market and Opportunities – IBEF (India brand equity Foundation) 3. www. Mint Magazines: 1. Investor www. JM Financial – Report on Infosys – February 2. 7.ncaer.mait.

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