STRATEGIC MANAGEMENT - I

Section D, Group 9

Strategic Analysis 21P186- Ankur Jain

of Infosys 21P200- Keshav Narayan

21P215- Priya Tekriwal
21P225- Shreetoma Bag
21P230- Stuti Sarkar
21P235- Ujjwal Sanjay Batra
 Indian IT Industry - An Overview
India is the world's most popular outsourcing location for IT firms. After showing its ability to
supply both on-shore and off-shore services to global clients, evolving technologies now open up
a whole new world of possibilities for India's top IT enterprises.
In 2020, the IT industry contributed for 8% of India's GDP
In FY22, the IT industry is expected to generate US$ 150 billion in export income.
Between April 2000 and June 2021, India's computer software and hardware business
garnered a total of US$ 74.12 billion in foreign direct investment (FDI)

Leading Indian IT companies such as Infosys, Wipro, TCS, and Tech Mahindra are expanding their
products and demonstrating cutting-edge concepts like blockchain and artificial intelligence to
customers through innovation hubs and research and development facilities.

Some of the key drivers of growth for this sector are as follows:
a. Low operating costs and tax benefits
b. Government policies that are supportive
c. Technically skilled labour is readily available
d. Rapid adoption of IT technology in key industries such as telecommunications and banking
and financial services
e. Export demand is increasing rapidly
f. New technology, such as cloud computing
g. SEZs created by the government

innovation is the most important component in the IT sector's continued growth. The IT industry
must always seek to create something new and adapt to the demands of a changing environment.
Infosys : An Introduction
Infosys Limited is a global information technology corporation based in India that specialises in
business consulting, information technology, and outsourcing. The firm is located in Bangalore and was
formed in Pune.
Infosys is the second-biggest Indian IT business, behind Tata Consultancy Services
With 40+ years of service, the company has a total revenue of $15.64 Bn from more than 50
countries that they are present In

IHISTORY:
Infosys, a NYSE-listed worldwide consulting and IT services firm
MISSION STATEMENT:
with over 292k employees, was founded in 1981
Infosys International Inc. is committed to providing our clients with the
They were the first Indian IT company to be listed on NASDAQ, and
people, services, and solutions they require to address their
they pioneered the Global Delivery Model
information technology issues and achieve their business objectives.
Infosys International Inc. is committed to providing our clients with the
PRODUCTS & SERVICES:
people, services, and solutions they require to address their
NIA – Next Generation Integrated AI Platform
information technology issues and achieve their business objectives.
Infosys Consulting – a global management consulting service
Cloud-based enterprise transformation services
VISION STATEMENT:
Infosys Information Platform (IIP) – Analytics platform
Our people, services, and solutions are designed to assist our clients in
EdgeVerve Systems which includes Finacle, a global banking
achieving their objectives.
platform
Panaya Cloud Suite
VALUES:
Skava – now rebranded as Infosys Equinox
Focus on quality & building trust
Engineering Services
Digital Marketing
 Leadership: Employees are encouraged to enhance their leadership skills. It has developed the
McKinsey 7S Model: "Infosys Leadership Institute" for this aim. Top management places a premium on an open door policy,
constant exchange of information, including employee opinion into decision-making, and cultivating
personal relationships with employees.

Staff: About 2.6 percent of the company’s revenues are spent in the continuous training & upskilling of
their employees

Strategy: Infosys believes in increasing business from limited but global clients. It has expanded its
service offerings in recent years, including consulting, business process management, systems
integration, and infrastructure management, all of which have contributed significantly to its success.
It also pursues strategic partnerships and acquisitions with organisations of similar strategic intent

Skills: To be eligible for evaluation, Infosys has made it essential for every employee to pass a set of
pre-determined certifications, both domain and technical. Apart from internal initiatives such as
knowledge management, Infosys' process capabilities have been CMM-Level 5 accredited. Infosys has
been inducted into the Balanced Scorecard Hall of Fame for attaining breakthrough performance
achievements utilising the Balanced Scorecard (BSC).

Structure: The corporation has a flat organisational structure and Software development is done in
groups, and group composition is based on the notion of flexibility.

Styles: The core values of Infosys are customer delight, leading by example, integrity & transaparency,
Honesty, Pursuit of excellence.

Systems: The organization follows a Global Delivery Model which allows it to produce in places where
it's most cost effective & sell in locations that are most profitable.
Strategic Analysis
Core Strategies: Focus is on “Organic Growth” by acquisition of only those companies that strategically align with the goals of the company.

GLOBAL DELIVERY MODEL: Production happens in cost-effective locations, sales happens in most profitable locations
MOVING UP THE VALUE CHAIN: intervention in software development project at its nascent stage
PSPD MODEL: Predictability, Sustainability (of revenues), Profitability, De-risking

Strategy in action:

Offices have been set up in Mauritius, Thailand, Mexico, Czech Republic & other low-cost locations, in line with their Global Delivery Model
Maximising returns from the value chain by starting Infosys Consulting, thus providing high end services
To manage risks better (PSDS Model), they have hedged currency to predict their revenues better
Huge investments made in developing training centres
Improvements have been made in terms of quality capabilities

General/ Broad Strategies:

Level of differentiation: As the quality of services goes up in the value chain, so does their
differentiation of services. Thus, there is little differentiation in the low-end services & high
differentiation in the high-end services
Low-cost strategy: as shown by their global delivery model
Customer centric: aim is to provide quality services in a timely manner while managing their
relationships with their customers
External Analysis: A) PESTLE ANALYSIS
POLITICAL
Government of India’s preference
for IT Partners
Change in policies for H1B
Professionals in the US
Unstability and sanctions due to
war like conditions might affect
business
TECHNOLOGICAL
Focus needs to be shifted to
technological products and
platforms as there is a heavy
dependence on services currently.
Emergence of new low cost
technologies is presenting new
challenges and opportunities
ECONOMIC
Tax benefits and fiscal benefits from
schemes relating to Special
Economic Zones
Domestic Market for IT and
business services is projected to
grow at 8% CAGR and reach US$
19.93 billion by 2025
LEGAL
Taking on more Green Projects,
lowering the carbon footprints and
energy utilization and working
towards sustainability
SOCIAL
Infosys has an excellent Goodwill and
is well trusted for its services
A good CSR Policy and related
activities have favored Infosys
IT Education is offered by a number
of technical institutes and universities
ENVIRONMEMTAL
Change in law from 2019 permitting
IT companies to set up SEZ without
any minimum land area requirement
presents opportunities
Change in regulations in India, US,
China, Australia and other markets
might affect Infosys
 B) Porter’s Five Forces Model
External Analysis:
Competitive Analysis:
Differentiation: Several companies in market
provide identical services, making it difficult to distinguish
between them.

- Fierce competition for traditional IT services such as application development and maintenance, IT
infrastructure management, and data-center services, leads in high levels of standardisation and
commoditization.
- The opportunity for differentiation through niche-specialization occurs in the context of non-
traditional services, i.e., those focused on emerging technologies such as Cloud Computing, Blockchain, and
IoT.
Number of Competitors : Both domestic (Infosys, TCS, Wipro, HCL Technologies, Tech Mahindra,
Mindtree, and so on) and multinational players (IBM, Accenture, Capgemini, Cognizant and so forth)
compete for business
Industry Growth : Growth in the industry as domestic Market for IT and business services is projected to
grow at 8% CAGR and reach US$ 19.93 billion by 2025
OVERALL : ATTRACTIVE
OVERALL : High Rivalry
Threat of new Entry:

commoditized IT services market, Infosys enjoys
Product Differentiation: There is little to no threat of new entrants for Infosys as even though it is a highly
strong reputation
Access to technology/Know-how: The business is characterised by a high level of human dependency; experts may leave existing organisations to invest in new
initiatives. Newer technologies open the door for new specialised players to potentially disrupt the market. However, this is unlikely to happen on a large scale.

OVERALL: Low Threat to Entry

B) Porter’s Five Forces Model
Buyer Power:
Number of Buyers : Huge in Number

Switching Costs for Buyer: Low

Contribution to cost:
1. For Conventional Services: When it comes to traditional IT services, the buyer has a lot of bargaining power, and there's a lot of pressure on costing
structures (rates). The buyer is largely the price setter, having worked with both international and Indian IT providers.
2. For Non- Conventional Services: There is opportunity for differentiation and higher margins in non-traditional services, such as those that cater to emerging
technologies and technology trends, such as Data Analytics or Enterprise Mobility.
OVERALL : High Bargaining power of Buyers

Supplier Power:
IT infrastructure providers (The SSN Stack), recruitment/HR practices, and office vendors are among the suppliers.
Number of Suppliers: High
Switching Costs: Switching costs is not much for giants like Infosys, TCS.
Contribution to Quality : Because of the high level of standardisation, suppliers have minimal influence. Because much of the value created by IT/ITES
organisations is developed internally, there is little room for suppliers to exert significant control. All of these are highly tailored, thus removing the element
of force from the game.
OVERALL : Low Bargaining power of Suppliers

Substitution Threat:
Availability of Substitutes: There are no substantial substitutes to IT services apart from Internal IT departments, which have lost influence over the years
and are ever thinner in numbers and significance. However, since since the main business of most companies is not IT services, they outsource as much as
possible and focus on future growth in core areas. Hence, there has been decrease in In-House IT Development Services.

OVERALL : Low Risk of Substitution

Internal Analysis: VRIO ANALYSIS

RESOURCE Valuable? Rare? Inimatable? Org Use? Competitive Advantage

Global Consulting and

Domain Yes Yes Yes Yes Sustained Advantage

Consulting Practices

Geographical
Yes Yes Yes No Unused Advantage
Penetration

Human Resources Yes Yes Yes Yes Sustained Advantage

Service and strategic

Yes No Competitive Parity
Alliances

Advanced Technology Yes Yes No Temporary Advantage

Image and Reputation Yes Yes Yes No Temporary Advantage

Track Record of Project

Yes Yes Yes Yes Sustained Advantage
Completion
Critical Success Factors
Market Reputation/Position
A good market share, size, and brand image
of the company is important to succeed
Economies of scale should be larger,
barriers to entry could help the company
gain competitive advantage
Infosys enjoys a good market reputation
with legacy of more than 40 years. It has
steadily gained over traction and trust
Value Addition and Novelty
Infosys, as part of a dynamic and fast-
paced business, always improves its
offering in order to provide clients with
the best value proposition
Infosys is able to create creative
solutions with emerging technologies
such as AI/ML, cloud computing, and
Robotic Process Automation (RPA) .
Hence, the net value addition is
unmatched in the industry
Operational Efficiency
In order to be competitive, cost and
operating efficiency are critical
Infosys has excellent resource capabilities.
It is ranked as one of the highest in quality-
of-service delivery
Their experience comes in handy when it
comes to mapping and optimizing their
consumer journeys and processes, major
focus on quality is the reason for success
Strong Leadership and Legacy
N. R. Narayana Murthy, one of the
founders of the Infosys, was a firm
believer in running organizations based
on strong values and principles
These beliefs had paved the way for
strategic vision that Infosys has and,
when combined with business and
technical experience, ensures that
clients receive the finest services
possible
Diversification
Infosys has an excellent Goodwill and is
Product/service diversification is
important as it reduces business risk,
ease cyclical pressure, and allow the
company to tap into new market niches
Infosys offers diverse range of services
in a variety of sectors ranging from
Mining, Oil and Gas etc. to Retail, travel,
hospitality etc
Client Satisfaction
Infosys Technologies was ranked first in
client satisfaction in outsourcing services
Its objective is to delight customers at all
costs, and every element of its operations
revolves around that goal
Its objective is to delight customers at all
costs, and every element of its operations
revolves around that goal helped in
achieving scalability & differentiation
Competitor Analysis

Company Infosys TCS HCL Tech Wipro Accenture IBM

Region Indian Indian Indian Indian Non-Indian Indian

Date of Foundation 1981 1968 1976 1945 1989 1911

USD 100.25 USD 177.7 USD 41.6 USD 42 USD 295.7 USD 151.3
Market Cap
Billion Billion Billion Billion Billion Billion

USD 2.6 USD 5.35 USD 1.9 USD 1.64 USD 5.99 USD 5.74
Net Income (2021)
Billion Billion Billion Billion Billion Billion

USD 13.56 USD 22.2 USD 10 USD 8.2 USD 50.53 USD 57.35
Revenues (2021)
Billion Billion Billion Billion Billion Billion

No. of employees ~292,000 556,986 197,777 ~220,000 699,000 400,000

Competitor Analysis
During the pandemic, Indian IT companies
Financial Metrics Infosys HCL Tech TCS continued to buy smaller companies in other
Share Price (INR) 1820.05 1166.35 3690.05 countries
The decline in corporate valuations abroad as a
result of the epidemic prompted this
P/E 35.80 28.75 36.27
concentration on Mergers & Acquisitions
Wipro's $1.45 billion acquisition of Capco, a
5 Yr. Avg. ROE 27.12% 21.56% 42.02%
management and technology consulting firm, is
one example. TCS purchased Postbank Systems
5 Yr. Avg. ROCE 36.79% 30.89% 56.24%
(Deutsche Bank's technology services division)
and Pramerica Systems Ireland (the technology
5 Yr. Net Profit (CAGR) 8.45% 6.45% 7.69% division of PFI Insurance). Infosys, meantime,
has announced its expansion into Calgary,
Alberta, Canada, in order to expand its
worldwide reach.
Infosys is one of the world's largest and most valuable IT companies, according to Client needs for better services used to drive
the financials M&A by Indian IT firms in the past
In a nutshell, it has surpassed Wipro, HCT Tech as the world's most important IT firm, However, it appears that the necessity for
with a market capitalization of $100.25 billion cutting-edge technology in developing digital
Infosys had handsome revenues and net profits among Indian IT businesses in 2021, industries is now driving it
with $13.56 billion and $0.77 billion, respectively Infosys's worldwide expansion will help it
streamline its client services all over the globe
and help compete better in the market.
Revenue Breakdown

Infosys TCS

HCL Technologies Wipro

Challenges: Intense Competition among Existing Companies: Infosys faces fierce competition in practically every area as a
prominent IT services provider. Global IT services, systems consulting, and integration firms are among the
Industrial company's main competitors

Talent Shortage: One of the most difficult difficulties facing the IT business is employee retention. The disparity
between the abilities that employers require and the talents that job seekers possess also needs to be aligned

Commoditization Risk: The possibility of commoditization of routine products and services is a big challenge to the
Indian IT industry. To mitigate this risk, businesses must establish core value propositions that are difficult for
competitors to imitate and use these capabilities to acquire and retain a loyal customer base

Increasing IT Complicatedness: The organization is vulnerable to dangers associated with IT complexity. It may
face difficulties if solutions contain undetected faults or if consumer expectations are not met. Customers,
impacting revenue. Continuous training of employees is the solution to this problem

Remote Workplace: Due to the lack of a boss or teammates to consult or provide fast responses or sources,
working remotely might create distinct obstacles. Infrastructure is the most important requirement for completing
such activities

Strong emphasis on software at the expense of hardware innovation: Software improvements are increasingly
exceeding hardware innovations. Firms must recognzse this paradigm and devote efforts to maintaining a balance
between advances in both hardware and software paradigms. Strategic focus on in-house R&D & innovative efforts
should be the way to go about it

Outsourcing Risk: Outsourcing is becoming more popular as a result of a skills scarcity or a desire to save money.
Outsourcing, on the other hand, has brought with it a slew of problems, including security risks, legal obstacles, and
cultural and time zone issues
Challenges: Organizational
Performance Pressure
Managers may be under pressure to enhance their work and get more done in less time because they report to senior executives or directly to clients. It
may be stressful for them to please their bosses and follow up with their subordinates. Excessive stress, worry, weariness, and even diseases can be
caused by long work hours and constant pressure to meet deadlines and maintain high standards

Operational Issues
Infosys faces a lot of lawsuits and claims as part of its normal operations, which could have an impact on its market reputation, business operations, and
financial performance if they go wrong. Also, Infosys faces challenges in a market where automation and artificial intelligence are challenging traditional
service divisions, but a more stringent regulatory environment in its major markets may force the business to reconsider its supply strategy and its
impact on profits

Poor Communication
When it comes to managing teams, another problem that managers confront is maintaining good communication. Because each team member has a
distinct personality, there is the potential for misinterpretation. Problems with communication might become more serious, affecting professional
relationships and productivity

Challenges in Value Appropriation

Infosys has had trouble efficiently appropriating the value it has developed via in-house R&D and innovation in the past. While the company invests much
in R&D and the development of new technologies, it has been unable to properly harness the results and generate compelling market propositions. While
Infosys's road to an MVP has been a success, translating that to a USP has appeared to be a difficult undertaking for the company. Infosys may solve this
difficulty by embracing leaner structures and business-technology linkages, which, if left unchecked, will snowball into a larger burden for the company
 A shift in focus to newer technologies such as AI, IoT, and Machine Learning in order to gain better projects
and prepare their employees for quick technological developments
Recommendations
Infosys must focus on investing properly in their employees and engaging them in innovative ways so that
workforce productivity is not impaired as a result of changes in employee working styles following the
pandemic

Developing user-centric organizations, hiring talents without any boundaries owing to the WFH scenario and
keeping a focus on M&A

"Quality, not numbers," should guide expansion

R&D spending as a percentage of revenue should be increased

Having a long-term vision for which employees should be hired not only with the requisite skills but also being
culturally fit in the organization

Consulting services should be prioritized above the development and maintenance of IT systems and software

Infosys should also work on strategies to acquire more projects from the existing client base so as to reduce
sales and marketing expenses and also focus on retaining existing clients so as to build tomorrow’s enterprise

Also, to beat the competitors and climb up the ladder Infosys should retain and build relations with large
clients and work on increasing the ability to execute large projects

Increase alliance with local infrastructure providers for data center, operations, etc

More concentration on B2B marketing to attract new clients in all market sectors
Conclusion
The IT industry has been growing at a very fast pace and Infosys has
been growing in double digits YoY
After the post Covid-19 era the IT industry has boomed and become
more robust
However, innovation is the most important component in the IT sector's
continued growth. The IT industry must always seek to create something
new and adapt to the demands of a changing environment. To keep the
momentum going, the IT industry needs to be tough in the face of
adversity and aim to give more and more end-to-end technological
solutions to their client base
Infosys has constantly on the rise and give a tough competition to its
competitors like TCS, Wipro, HCL Technologies and growing its
presence. Expanding to different geographies, acquiring the right talent
fit for the current scenario, acquiring large customers so that it can get
acquainted with large projects and retaining existing customers will help
Infosys go a long way
There are a lot of factors affecting the business of Infosys but there is a
steady growth in the industry and Infosys is devising various strategies
to attract and retain customers. Although, after the Covid-19 pandemic
the IT industry has faced a lot of challenges pertaining to operations,
project execution, talent shortage and many more but swiftly the entire
industry has been coming back to the normal and has made the
companies even more resilient than before
There is however, sure to be a stiff competition in the market to gain
dominance. Any competitive edge can thus be gained by companies if
they act sooner than later and come up as pioneers in these domains in
order to gain first mover benefit.
Thank you