MASTER OF BUSINESS ADMINISTRATION

MANAGING IT DATA AND INFORMATION

SYSTEM

SUBMITTED BY:
JAFFIN JOHN - 19221013
 Managing IT Data and Business System (CIA-1)

HCL Company

Introduction

HCL (Hindustan Computer Limited) is an Indian multinational information technology (IT)

service and consulting company. The head quarter is in Noida. They have office in 44
countries including The United States, France and Germany. It operates sector including
aerospace and defense, automotive banking, consumer goods energies and utilities, health
care, hi-tech etc. It was founded in 1986. The company tried to stay focus on hardware but,
via HCL Technologies, software and service is the main focus. It is a next generation global
technology company that help enterprise reimage their business for the digital age. HCL
serves leading enterprises across key industries. They offer an integrated portfolio of
products, solution, service and IP. Their customers endorsing the value that they add to their
business, every day, is the biggest testament to their promise of taking the Relationship
Beyond the Contract. They likewise use loyalty programs to lower buyer power

Porter’s Five Force Model Analysis on Hindustan Computer Limited

1. Threat of New Entrants.

This force of Porter analysis that how easy or difficult their will be to newcomers to enter
into the business industry. When we talk about threat of new entrants for HCL, there is a
chance of number of barriers for them to enter in this market. So, it will not be a easy task for
a new commers to gain customer’s trust and to get established as compared to HCL. where
the firm discovers and implements their strategy which needs to increase their competitive
benefit. To cut the risk of new entry, business must produce outstanding brand image. As the
industry is generating high profit so there is a more chance for a new entrant to get attracted
and to get enter into the market. However, the entrants will cause decrease in overall industry
profit. Therefore, they have taken necessary steps to block the new entrants.
 Switching the cost.
 Access to suppliers and distribution.
  Customer loyalty to established brand.

There are few reasons that threat the new entrants:

 Customer are really loyal towards the quality of their product.

 They are familiar with their price so they can’t even think to switch to new
entrants.
 The most important thing HCL has its own brand name. so, a ne company
can’t achieve a good reputation as HCL.
 Price of HCL are really fair and reasonable.

2. Threat of Substitute.
It describes the threat to the company. If the goods and services are not up to the
standard then there is a chance that customer get shifted to alternatives that do not
need any effort and do not make a major difference.
The potential that make customer to shift to alternative products are as follow:
 Switching cost of buyers
 Reduction of quality
 Close substitution is available
 Product substitute availability in the market
When we talk about HCL, substitute of product is medium. As matter of fact, not
only in India but all around the world, the utilization of PC’s is so common. Almost
every person in the society possess a personal computer. The Hindustan Computer
Limited proffers its customer the high customer services in term of quality as well as
prices. So, the threat of substitute product can remain low for HCL company. On the
other hand if we talk about present age, number of needs can be fulfilled by
smartphones instead of PC’s. If you merely need a PC’s for personal use i.e. for
surfing internet etc, you can have it on your smartphones instead of PC’s, as it will be
a better option as it is portable as well as have low cost. On the other hand, need and
importance of PC’s for employee in office etc, can be denied.

3. Competitive rivalry
 The lesser money and resources are required to enter into a market. The higher their
will be new competitors and effective competitors. It also weaken the company’s
position. Following are the factors that effect the company’s competition:
 Continuous innovation
 Level of advertising
 Competitive strategy
 Competitive advantages

When we talk about Hindustan Computer Limited, the competitive rivalry are very
high. Price war, low differentiation as well as decreasing profitability, .these are the
external factor that lead to high competitive rivalry. The all IT industry are playing
very well making the tough situation to compete for each other. All the competitors
of HCL like Acer, Compaq, Dell, Lenovo etc, own a high reputation and excellent
customer relationship, making the competition tough for the Hindustan Computers
Limited. In this scenario, the HCL needs to make the reliable customer relationship
and proffering the high-quality product and services, latest technology at the fair
prices. This is the only way through which they can achieve high reputation and
stand along with the competitors in this tough competition scenario.

4. Bargaining power of Buyers

It deals with the ability of customer to take down the price. It mainly consists the
importance of customer and the price of a product whether the customer will switch
from one product to another. There is a chance to increase in the buyer power if the
there are too many alternatives available. And the buyer power is low if there are
lesser number of alternatives. When we talk about bargaining power of buyer for
Hindustan Computer Limited, it’s really high. The customer or buyer are highly
priced sensitive like if someone need a PC’s for merely a personal use, he can’t afford
to buy a expensive one. Also, the competitors of Hindustan Computer Limited like
Dell make the competition tough for them. For instance, if the company is going to
raise their price then the buyer will not hesitate to switch for an option that they need
a reliable and as well as reasonable price for them. Also, there is high competitors in
the PC’s industry, so they proffer lot of option to the customer. But as a matter of fact,
HCL has very reasonable price and it has made a good reputation, loyalty and good
relationship with the customers.
5. Bargaining power of Suppliers.
It refers to the supplier ability to increase or decrease price. If there are less numbers
of suppliers then this will be a threat to the company and it would have to purchase
raw material in supplier terms. In other case if there are many supplier’s alternative
then the bargaining power of supplier would be less and the company don not have to
face high switching cost. The HCL has the very good relationship with the with its
suppliers but as a matter of fact there are large number of suppliers, if suppliers true to
increase price, HCL can easily switch the suppliers. But HCL keep a very good
relationship with the existing suppliers. Also, supplier can negotiate with the company
for the reason that they know that company has several options available and can
easily switch to the better option. So keeping in mind we can conclude that bargaining
power of suppliers remain medium for Hindustan Computer Limited.

Conclusion
In conclusion the industry is attractive for new entrants and new entrants cannot affect
the company as it has good customer loyalty. The threat of substitute is medium.
There is a larger competitive rivalry as more numbers of competitors are available in
this industry. HCL has very reasonable price and it has made a good reputation,
loyalty and good relationship with the customers so bargaining power of buyer is less.
HCL has the very good relationship with the with its suppliers but as a matter of fact
there are large number of suppliers, if suppliers true to increase price, HCL can easily
switch the suppliers. But HCL keep a very good relationship with the existing
suppliers. So, threat of suppliers is medium for them. HCL has gained a highly
recognition and a good customer loyalty making this firm best.