Strategic Analysis of Infosys

Strategic Analysis of Infosys
Strategic Management
Submitted to
Dr. Veeresh Sharma
GROUP 5
Ankita Chakraborty 13PGHR06
Soham Barman 13PGHR14
Ipshita Goyal 13PGHR18
Pukhraj Jawanda 13PGHR34
Ritesh Jha 13PGHR36
Abhishek Srivastava 13PGHR51
ACKNOWLEDGEMENT
We take this opportunity to express our gratitude to Dr. Veeresh Sharma for his
invaluable guidance, excellent supervision and constant inspiration throughout the
course. He helped all of us to understand the elements of Strategic Management and the
issues involved in it. His encouragement and advice helped us throughout the project, and
helped us in the timely completion of this project. We thank MDI Administration and the
Library Staff for maintaining such an Excellent Repository for SM related Issues, without
which the project would not have been possible.
Last, but by no means the least, we thank all those who were directly or indirectly
involved with the completion of this project.
Strategic Management Page 1

Executive Summary
Why do some companies perform so better and others fail? It is because of the strategies
that the Management of a company follows which differentiate itself from its competitors
and provides a source of sustainable competitive advantage. In order to achieve superior
performance and provide a competitive advantage it is important for the Manager to have
knowledge about the Internal Environment and External Environment. If the above
information is used while formulation of the strategies it will result in Organizational
Effectiveness.
The IT sector is growing at a significant pace in India. Its contribution to the GDP has
also grown in the last few years. One of the top companies in the IT sector is Infosys.
Infosys was founded in 1981 by Narayan Murthy, Nandan Nilekani and Kris
Gopalakrishnan. Infosys provides business consulting, technology, engineering and
outsourcing services.
The objective of the project is to perform a strategic analysis of Infosys and to provide
recommendations to Infosys for it to achieve its potential. The past and present strategies
followed by Infosys are analyzed to find out what works for them and what doesn’t. The
external environment, competitive environment are discussed to find out to alignment
between the policies followed. Porter’s five force model is used to analyze the external
environment. To find out about the internal environment SWOT and McKinsey’s 7S
framework have been used and the source of competitive advantage which differentiates
Infosys from the other IT giants is found out.
SWOT matrix has been used to find the fit between the strength, weakness of the
company with respect to opportunity and threat in the environment. BCG Matrix has been
used to find the various types of units under Infosys fit under what area if analyzed with
respect to the growth rate and market share of the departments and finally we have
provided recommendations to Infosys for improving their current state and re-achieving
the top spot in India which it had enjoyed for so long.

Table of Contents
Introduction.................................................................................................................................................4
External Audit.............................................................................................................................................4
General Industry Analysis.......................................................................................................................4
Political and Legal Environment.............................................................................................................6
Economic Environment...........................................................................................................................7
Demographic Analysis............................................................................................................................8
Social Environment Analysis..................................................................................................................8
Technology Environment Analysis..........................................................................................................9
Global Environment Analysis................................................................................................................11
Industry Analysis...................................................................................................................................12
Porters 5 Force Analysis of the Information Technology Industry....................................................12
Competitive Landscape.........................................................................................................................16
TCS...................................................................................................................................................16
Wipro.................................................................................................................................................17
Internal Audit............................................................................................................................................19
Competitive Advantage.........................................................................................................................19
SWOT Analysis.....................................................................................................................................21
McKinsey 7S Framework.....................................................................................................................24
Finding the FIT..........................................................................................................................................27
BCG MATRIX......................................................................................................................................27
SWOT Matrix........................................................................................................................................28
Recommendations.....................................................................................................................................29
Conclusion.................................................................................................................................................32
References.................................................................................................................................................33

Introduction
The IT-BPO industry in India has become a growth engine for the Indian economy, and contributes
substantially to the GDP of the country. Its impact on urban employment has been phenomenal. The IT
industry generates around 2.5 million employments in the country. The industry is dominated by exports.
However, the domestic market has exhibited significant growth over the years. India’s total export of
computer services and ITES/BPO services (excluding commercial presence) during the year 2012-13 was
estimated at `3,400 billion , exhibiting 20.7 per cent growth in dollar terms over the year 2011-2012. The
top companies in the IT industry in India include Infosys, TCS, Wipro, Cognizant Technology Solutions
Corporation. TCS is the leading player in the industry.
The industry is going through turmoil because of the global economic slowdown. The IT giants Infosys,
Wipro etc. have shown an average performance, as they are struggling to get new projects in this period
of economic crisis. The US, the biggest source of revenue of the big IT giants, has still not fully recovered
from the economic recession of 2008. The Eurozone crisis has meant that demand from Europe, another
major source of revenue, has also suffered. Apart from this, several offshoring locations like Philippines,
China etc. are coming into the fray and the level of competition has intensified. The Indian IT industry is
hence going turbulent times
Infosys is the second largest IT Company of India. Infosys was established in 1981 and is listed in NYSE.
It has approximately 1,58,000 employees. From a 250 US dollar company, Infosys has grown to become
an 8 billion company (Q3 FY2014 revenues) company and has a market capitalization of approximately
33 billion US dollars. Infosys was the first IT company from India to be listed on NASDAQ. Off late,
however, the company is going through a dark patch. It has been unable to meet industry growth
estimates on few occasions. The leadership problems that Infosys is going through have not helped its
cause. The outlook is not promising because of the global economic slowdown- USA is yet to fully
recover from the shocks of 2008 recession and Europe is gripped with economic woes. The competition
in the industry has intensified. Infosys is thus going through difficult situation at the moment.
External Audit
General Industry Analysis
Information technology (IT) industry in India has played a key role in putting India on the global map. IT
industry in India has been one of the most significant growth contributors for the growth of the Indian
economy. The industry has played a major role in transforming India’s image from a slow moving
bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class
technology solutions and business services. The industry has helped India transform from a rural and
agriculture-based economy to a knowledge based economy.
The IT industry has become a growth engine for the economy contributing substantially to increase the
GDP, unemployment rate and exports to achieve the vision of powerful and resilient India. The Indian IT-
sector is estimated to expand at a compounded annual growth rate (CAGR) of 9.5 per cent to reach US$

300 billion by 2020. Over 2000-13, the sector has increased at a CAGR of 25 per cent. The contribution
of IT in GDP has grown from 1.2% in 1998 to 7.5% in 2012. The industry’s share of total Indian exports
increased from less than 4% in FY1998 to about 25% in FY2012. According to Gartner, the "Top Five
Indian IT Services Providers" are Tata Consultancy Services, Infosys, Cognizant, Wipro and HCL
Technologies.
Firm Revenues Employee Headquarters

s
Tata Consultancy Services $11.57 billion 254,076 Mumbai
Cognizant Technology $7.05 billion 185,045 Teaneck, New

Solutions Jersey
Infosys $6.69 billion 153,761 Bangalore
Wipro $5.73 billion 140,569 Bangalore
HCL Technologies $4.3 billion 85,335 Noida
As seen from the diagram below there is various factors that affect an industry and thus affect a firm. It is
very important for any company to have a clear understanding of all these factors and how they might
affect the company. A lack of clear understanding of even one of these factors might lead to big losses for
the company. Thus performing a Macro Environment analysis is very important before formulating a
strategy for the company.

Political and Legal Environment
The political environment of the country is not very stable with elections due in May this year. There are
high chances of economy going either up or down depending on the result of the elections. The impact of
the recent budget has also been mixed for the IT sector.
The Positives of the budget have been
 No customs duty for equipment required for setting up semi-conductor plants. This would boost
manufacturing of high tech electronic goods in India.
 The formation of the Rangachary Committee to provide clarity on tax related matters for research
and development activities in the IT sector. The formation of the Committee will help to solve
issues related to taxation of development centers.
 Focus on SME and startup by the government.
The Negatives of the budget have been
 The main issue which was the rollback of taxation on software treated as royalty, removal of
minimal contiguous land requirement for SEZ, dual levy of VAT and service tax on the sale of
domestic software and the transfer pricing norms have been unaddressed.
 Corporate tax has gone up from 5 per cent to 10 per cent.
 No reduction in Minimum Alternative Tax (MAT) rate on business carried out in SEZs.
The recent development in the United States of America to pass the immigrant bill has been a big cause of
concern for India IT giants. India will try to force the US to drop the controversial Immigrant bill which
might lead to heavy penalties to Indian companies. The Immigration Bill proposes restricting a company
with over 15 per cent of its workforce on H-1B visas from placing H-1B workers at the offices of their
clients. This will have a direct impact on the Top IT Indian companies

India has a very stable Legal environment. India has an independent judiciary and a comprehensive IT act
called ‘Information Technology Act 2000’. Apart from this there are properly well established
Employments Law, Intellectual Property law, and Employment law which also add to the stability of the
political and legal environment.
Economic Environment
After achieving very high growth rates India is currently facing a decline. But still the growth rate is very
huge when compared with that of other countries most of which are in a state of no growth. High fiscal
deficit, lack of foreign investment, tax and manufacturing norms are some of the hindrances facing the
Indian economy.
The annualized inflation rate in India is 8.9% as of June 2012 this is a modest reduction from 9.6% which
was in June 2011. The inflation rate is a cause of concern for the Indian Government but the Reserve
Bank of India Governor has taken a few steps recently to reduce the stress of inflation on the people. To
combat inflation the interest rate has been adjusted three times since last September. The situation is
looking unlikely to change till the elections in May. The Exchange rates are also at the peak with euro
close to 85 and dollar at 60. This is because many foreign investors are looking reluctant to invest in India
and the growing Imports of the Indian market and unable to match it with exports. As most of the earning
by IT companies is from export the changes in Exchange rate have been very helpful to improve the
revenue of the industry and compensate for the losses occurred due to lost clients. India is a land
economical and easily available labor this makes the cost of the product little cheap when compared with
other European and American products. India has also got many lakhs of Computer Engineers joining the
workforce each year which makes India a hotspot for IT activities at an economical rate. The Domestic IT
market is expected to grow at around 15% which is lower than last few years but when compared with
other countries it is quite high.

There is a lot of attraction towards India because of the low cost advantage. Further the geographical
location of India adds to the advantage as it is exactly half way round the world from the US west coast.
India’s development has been the most major and Pune and Bangalore have become the most preferred
location for major IT giants like HSBC, Microsoft, GE, Hewlett Packard etc. This is because of the good
weather conditions, proper infrastructure facilities available here. Also the large number of Indian
Engineers in the US has also helped to get an easy entry in the market.
Demographic Analysis
The demography of any place helps us to gather information about the population, age structure, religion,
language and ethnicity of the place. In India the census is conducted every 10 years the last one was
conducted in 2011 and was the 7 th census post-independence in India. India occupies the second rank in
the world in terms of population with the current population being 1.21 Billion with a decadal growth of
around 17%. More than 70% of the population in India lives in the rural areas.
The literacy rate of India was 74.04% in 2011. Although when we compare the literacy rate of India with
the world it is very low but when we look at the population we can see that the number of literate people
in India is very high. The share of Tertiary sector like IT has been growing in India from the last few
decades. The age structure also plays a major impact while look at the employment scenario of the
country. In India 70% people fall in the age range of 12-50 which signifies that average of India is low.
According to the World Bank report India has 1.5 million engineering students in India. As the number is
very huge and the number of jobs available is low many of the engineers face problem to find jobs and
hence have to adjust with low paying jobs. This huge talent and the low cost have led to many big IT
companies opening their offices in India. Apart from this the location of India with respect to the US
plays a key role in providing a 24 hour service to the customer. China on the other hand also has the
above mentioned advantages but what differentiates India from China is the command of the Indian
people over the English language.
Social Environment Analysis
These are the social factors affecting Indian IT industry that ranges from employee right, race nationality
of company, language barriers, or other issues. The fact, that English language being widely spoken in
India has helped in fostering the industry’s relationship and interaction in India and on the global stage.
India is one of the few nations to have a growing share of working population, since there is a great
availability of both skilled and unskilled labour force.
Industries must consider the type of services the software is meant for, age difference of users, life style
of the different countries of supply. It should be noted that there will always be difference in client
behaviors which is supported by the fact that different customers have different taste.
Education
There are large number of universities and institutes in India offering IT education. And there are large
numbers of students which ever year passed these courses and join the IT industry. The Indian labor is not

only cheap but is technically skilled too to the world class level. It is due to the Indian Education System
that includes in its course curriculum the practical knowledge of the latest technology that is developed in
world along with the fluency in English Language that imparts compatibility in an Indian technician to
communicate and work throughout the world.
Career Prospects
The IT sector has been India's sunshine sector for quite some time now. The industry has facilitated
considerably to changing India's image from a slow developing economy to a global player in providing
world class technology solutions. According to the IBEF (India Brand Equity Foundation) figures, the
Indian IT industry is set to touch $225 billion by 2020.
Industry experts and NASSCOM say the Indian IT workforce will touch 30 million by 2020, becoming
the highest sector employer. This will be coupled with steady increase in pay in a sector already offering a
high base. The outsourcing industry too is looking towards India and is expected to be a $2.5 billion
industry in the next 24 months.
IT industry in India hire approximately 4, 00,000 people every year. Out of these, the ITES sector hires
around 2, 00,000 people and the rest taken by IT sector.
Workforce Diversity
IT & ITES sector has been playing a leading role in making the workforce even more inclusive through
tapping different segments such as people with physical disabilities and those from economically and
socially challenged background. In fact, for the bigger and more mature Indian companies today a more
diversified workforce in terms of gender, cross-culture, age profile and different nationalities is becoming
increasingly important.
IT/BPO industry in India, which established the country firmly on the global map with its outsourcing and
off shoring capabilities, is the largest employer of women in the corporate sector in the country. Of its
total pool of around three million direct full time employees, 30% are women.
Technology Environment Analysis
Technological factors largely cover infrastructure planning, hardware, and software. Whole world is
witnessing rapid changes in technological domain in almost every sector. IT sector is no exception to it.
Revolutionary technological advancements have changed the shape of IT industry over the years.
Internet
Looking from a macro perspective, IT and internet revolution in India is for real. With a whole range of
knowledge-based skills and legacy to be drawn, India is well positioned to integrate internet into its
industry sector, education system and public institutions, and it has done so very well till now. Another
observation would be that more than any other country in Asia, Internet will have a profound impact on
India’s progress towards a more accessible and open environment conducive to business.

Among the 1 billion internet users in top 30 most aspiring countries, 120 million are from India.
Prospects of growth is very high as internet penetration in India is still low i.e. only 10 out of 100
compared to around 34 out of 100 in top 7 nations. As internet is one of the basic facilities required for IT
operations, the more the internet penetration the more reach of Information technology to people can be
expected.
New IT Technology
Leading organizations in all industries are facing significant challenges and vast opportunities as we are
making our way through a period of transition in realm of cutting-edge technology. The key to success
would be the ability to evolve the way we approach technological advancement and how do we address
the current dramatic shift of the IT & Communications technology (ICT) paradigm of connected mobile
universe.
Today, we are in middle of dramatic transition into yet another new era of mobile computation, in which
Smartphone sales now surpass laptop and desktop computer sales combined. This mobility-based
connected universe would very soon have trillions of connected devices and sensors, serving billions of
users, with help of millions of apps. Virtually everything will be connected together and the collective
intelligence resulting will make devices and eventually each life-action smarter.
Software Technology
A CAD (Computer Aided Design) model of a mouse initially software for computer aided design system
was developed with computer languages such as FORTRAN, but with the advancements of object
oriented programming methods has radically changed. There are several other examples like this where
new advancements have made the older one obsolete. Therefore, all organizations in the industry should
be very responsive to all innovations in the technology.
Hardware and OS Technology
As discussed, over the years the market has shifted to high mobility devices (i.e., smart phones, tablets,
etc.) due to which worldwide shipments of personal computers (PC) were reduced by 14% a year,
according to IDC.
About five years ago, Intel had a program for explaining companies how PC failure rates skyrocketed
after four years and how productivity could be greatly improved by changing out the whole fleet on a
regular basis. But in today’s world, a PC’s local content can be mirrored to the cloud instantaneously,
and if the machine itself falls out, it can be replaced with no loss of productivity.
Technological advancements like these in hardware industry can really reshape the future of IT industry.
Telecommunication Sector
India's telecommunication network is the second largest in the world on the basis of the total number of
telephone users (both fixed and mobile phone users). Also, it has one of the lowest call tariffs in the world
enabled by the extensive telephone networks and cut throat competition among them. It has the world's

third largest Internet user base. According to Internet and Mobile Association of India (IAMAI), the
Internet user population in the country stood at around 190 million at the end of June, 2013.
Global Environment Analysis
It is no secret now that Indian software companies depend heavily on business from the United States and
Europe which are in the form of providing data services, customer and technology support/maintenance
and consulting.
The financial crisis of 2008 in US and sovereign debt crisis of Europe have not only cut the IT spending
in these countries, but also forced them to adopt measures that of protectionist to save jobs in their own
trouble-ridden economies.
These protectionist measures get manifested in the imposition of restrictions of visas of skilled
employees, removal of tax benefits and loans for the outsourcing organizations (US Call Center Worker
and Consumer Protection Act), ban on the outsourcing of the government projects, etc. On the other hand,
the IT spending in domestic markets and in other emerging markets (the other available markets) has
tapered off. Indian IT companies now have the difficult task of achieving profitability and growth in a
crisis situation.
Market Conditions
The linear growth model was quite successful, when Indian companies were leveraging the benefits of
cost arbitrage, largely driven by a vast human resources pool of cheap and trained labor. But ‘cost
arbitrage’ as a competitive advantage looks to be fading away with the arrival of alternatives from nations
such as the Philippines, China Eastern Europe and Latin America. Customers now have started to demand
more value for their money and wanting complete IT solutions for their businesses and problems.
The changing market conditions in IT industry reveal that the solutions are not just restricted to
application design and maintenance but are also moving towards Enterprise Mobility, Cloud, Data
Analytics and Consulting areas. Organizations which would able to make this transition survive and
remain competitive would succeed, whereas the companies that fail to make such a qualitative shift
would, no doubt, continue to struggle.

Industry Analysis
Porters 5 Force Analysis of the Information Technology Industry
Threat from new entrants
The entry of a new firm is a function of two factors
 Barriers to entry
 Retaliation from other players in the industry
Barriers to entry
The barriers to entry in the Information Technology industry are not very high. Several new startup
companies come up each year. Several promising companies have emerged over the industry over the
years. Companies like Mindtree, Mphasis, ITC Infotech etc. have made significant progress.
The initial cost of starting an information technology company is not very high. In terms of space
requirement, even a small flat with computers can be a starting point for an IT company. The initial
hardware cost is also not very high. The cost of hardware has come down immensely over the years, with
the development of superior hardware. The options available for supply of hardware and software are also
immense. Hence procurement of necessary hardware and software is not a big barrier. The resources
required for providing the services are also not scarce. Engineering graduates, IT or non IT, with some
amount of training can perform the job. With the process of software development becoming simpler due

to the ability to reuse code, and the development of different tools and platforms, a number of positions in
different companies can be filled with non-engineering graduates.
According to a Towers Watson survey, 600,000 engineers graduate in India each year, far surpassing the
industry's requirement for 250,000 engineers. Thus the companies have a huge resource pool which gives
them high bargaining power. The average entry level salary in Indian IT companies is between Rs2.75
lakhs per annum and Rs3.5 lakhs per annum. However most of the fresh recruits need extensive training
to become job ready. This involves time and cost for the companies. Hence many companies recruit the
graduates at significantly lower salaries and expend on their training.
Bargaining Power of Suppliers
Suppliers in the Information Technology industry would include supplier of hardware and software.
However, supply of talent necessary to provide the services is extremely crucial.
While the IT companies are dependent on the suppliers for the supply of hardware and software, the
suppliers of hardware and software are also highly dependent on the IT firms. This is primarily because of
the fact that the IT companies usually deal with high volumes of hardware and software and hence are
usually major customers for different suppliers. Also the inputs that are required are very standard. Minor
upgradations in speed, memory, operating systems etc. are required over the years .Also, there are usually
mutually beneficial long term relationships between the suppliers and the information technology firms.
Hence even though the information technology firms are dependent on the suppliers for their hardware
and software requirements, it is also of great interest to the suppliers to maintain good relationship with
their major IT customers.
Supply of manpower is critical to the success of information technology firms. Most of the business of the
information technology firms is dependent on the quality of the software engineers the company employs.
The software engineers develop, maintain software and give the necessary support for them to the clients.
As mentioned before, more than 600,000 engineers graduate from different engineering colleges in India
every year against an industry requirement of 2.5 lakh engineers per year. Hence availability of resources
is not an issue for the information technology companies.
However the fresh recruits are not always industry ready. In fact reports by Nasscom have consistently
shown that over 75% of IT graduates are not prepared for job. The National Employability Report by
Aspiring Minds, an employee assessment service provider, showed that about 83% of the engineering
graduates in India are unfit for employment. Most of them have deficiencies in communication skills,
problem solving skills coupled with lack of theoretical knowledge in several instances. Hence a lot of
effort, cost and time has to be spent in training them and making them job ready. According to National
Association of Software and Services Companies' (NASSCOM) survey of 2011 that IT companies spent
over $1 billion a year for training employees to make them fit for the job.
In “IT Industry in Transformation: Opportunities and Challenges for India”, Arun Mitra noted that one of
the prime reasons for a probable slowdown in the industry growth rate is going to be the insufficiencies in
supply and inadequate use of skilled human resource coupled with business climate developments.
Bargaining Power of Buyers

The bargaining power of the buyers in the information technology industry is moderate to high. This is
partly because of the options available to the buyers. In the sector there are a number of well-known and
prominent players like Infosys, Cognizant, TCS, Wipro, Tech Mahindra etc. Smaller and newer firms
which provide quality service at lower costs have come up over the years and this has significantly
increased the bargaining power of the buyers. The offerings of different firms are also not significantly
differentiated. However, reliability, the quality of service and delivery are important from the point of
view of the buyers. Cost is also a very important factor. Organizations like Infosys charge a premium for
their offerings and follow a stubborn high-margin pricing model. With more and more low cost options
available to the clients, this can be a major disadvantage in the future.
Threat of Substitute Products or Services
The threat of substitutes is in between moderate and high. The services are not usually highly
differentiated. They vary from one another in terms of cost for providing the service, the quality of
development, service, maintenance and support provided for the offerings. Because of the large number
of players, clients might choose a competitor for advantages in one of the above mentioned factors.
However the clients usually go for long term commitments with the information technology firms. They
usually do not switch frequently between information technology firms for an offering. Doing that would
involve a lot of rework and increase in cost incurred. For example Infosys has been the information
technology service provider for Bank of America, Royal Bank of Scotland etc. for more than a decade.
For Bank of America it would be difficult now to switch from Infosys to any other IT company. However
for a new service offering it will have many options to choose from.
However new offshore locations like Philippines, China etc. pose a threat to Indian IT industry as a whole
and Infosys in particular. Like India, Philippines boasts English language skills and low cost. With the
cost of doing business in India on the rise, Philippines has become the favored destination for many..
Philippines has already overtaken India as the new Capital of Call Center.
Rivalry amongst Competitors
There are numerous competitors and big players in the industry. Infosys, TCS, Cognizant Technology
Solutions Corporation, Wipro are the major players in the Indian information technology industry. Other
close competitors include Tech Mahindra, HCL Technologies, Mindtree, Mahindra Satyam etc. Because
of the presence of so many big players, the intensity of rivalry is very high. Also the competition is well
balanced and there are no clear outliers in the industry, even though TCS has been ahead of its
competitors in terms of revenue. The fact that there is not much differentiation in terms of offering
intensifies the competition even more. However the brand matters and clients are often ready to pay a
premium to ensure reliable service and high quality.
Competition to the Indian IT industry from other offshoring locations is also intensifying. Philippines has
emerged as a favorite offshoring and outsourcing destination because of cost advantages and abundance
of English speaking professionals. The gradual increase in the cost of doing business in India has
increased the attractiveness of destinations like Philippines.

Threat from new entrants
LOW
1. Low Capital and space
requirement
2. Easy availability of resources
Threat of substitutes Intensity of Rivalry Bargaining power of buyer

MODERATE HIGH HIGH
1. Services not very 1.Very strong competitors 1. Large number of companies
differentiated like TCS, Cognizant, Wipro providing low cost solutions
2. Low cost options 2.Each year, a large number 2. The offerings are not highly
present of small companies, differentiated
offering low cost solutions 3. For existing services, clients
3. Large number of
come up usually continue with the old
players
3. Threat from competitors companies with whom they
4. Offshoring locations
from other offshoring already have tie ups
like China and locations like China and
Philippines Philippines
LOW
1. Availability of vast talent pool : Each year
around 600,000 engineers graduate
2. Engineers who graduate are not always
readily employable. Training them
involves cost
3. Hardware and software supply is not a
constraint
Bargaining power of suppliers

Competitive Landscape
The biggest competitors of Infosys in the IT industry include TCS, Cognizant and Wipro.
TCS
TCS is the biggest player in the Indian IT industry and is the largest IT exporter in India. TCS is ranked
40th overall in the Forbes World's Most Innovative Companies ranking, which has made it the highest-
ranked IT services company as well as the top Indian company in the list.
The following are the strengths of TCS:
 Strong brand equity and brand backing of TATA: TATA is a highly respected brand, not just
in India, but also globally. Hence TCS also enjoys the brand value and respect of TATA. It helps
it immensely in its business. Clients perceive it to be a reliable brand, because of its own
performance as well as because of its association with the reliable brand of TATA.
 High command on local and domestic market (India): Gartner estimated that the market for
government technology in India is about 37,000 crores and this includes products and services.
TCS gets a lion’s share of this market. TCS draws an impressive 20% of its revenue from
emerging markets. According to the Annual Report of TCS for the year 2012-2013, 16% of its
overall revenue came from India. This is very impressive considering the fact that the
corresponding figure for Infosys is 2%.
 Strong focus on ethics and quality: Like Infosys, TCS puts a strong focus on ethics and quality.
Hence it has established itself as a reliable brand with high ethical standards and a guarantee of
quality service

 Focus on Innovation: Innovation Labs and Co-Innovation Networks(COIN) allow TCS to offer
innovative solutions to its clients.
FUTURE OBJECTIVES

1. Increase
 profitability and efficiency by doing more
with less
 and effectively respond to the changing
2. Rapidly
 demands, thereby improving the agility of
market
the organization

3. Leverage IT as a strategic driver for competitive

advantage, not just as business utility

CURRENT STRATEGY

1. Customer-centricity

2. Full Services Capability: Capture the entire value
 of IT
chain
3. Global Network Delivery Model: It helps to

uniformly provide solutions to global consumers
 Acquisitions
4. Strategic
5. Platform based services
RESPONSE

 ASSUMPTIONS
1. The IT industry will keep growing at a fast pace as


predicted by NASSCOM
2. There will not be scarcity of skilled human resource

in the future
3. The cost of doing business will not sky rocket and
hence the cost advantage would be maintained

4. US government will not pass anti outsourcing laws
CAPABILITIES
1. No 1 IT exporter of India and an established brand

2. Provide innovative solution to the clients
3. Strong focus on ethics and ability to deliver quality
4.Wipro
Strong brand backing of TATA
5. High command on domestic market and gets a large
share of government projects
Wipro

Wipro Limited is an Indian multinational information technology (IT), consulting and outsourcing
Service Company headquartered in Bangalore, Karnataka, India. As of September 2013, the company has
147,000 employees serving over 900 clients with a presence in 61 countries. Wipro is the third largest IT
services company in India.
FUTURE OBJECTIVES
 Focus on innovation
 Adopt the Dynamic High Technology Strategy
 Diversify into various Sectors
 Leveraging the huge investments in R&D

 CURRENT STRATEGY

 Alliances with top global company
  Continuous six sigma implementation and
 improvement
 Global R&D

 Diversified skill base across service lines
  Low Cost strategy
 ASSUMPTIONS

 The boom in the IT market will continue RESPONSE
 The immigration bill will not be passed in the
 US government
 The volatility of the currency will reduce
 Innovation of new products will still make a
 significant part of their revenues
CAPABILITIES
  More than 1 lakh employees present in the
 company
 Talented bench strength which can be used for
upcoming project
 New development facility because of high
investment in R&D
  Great
Quality of Service
clientele base

Internal Audit
Competitive Advantage
The vision of Infosys is “To be a globally respected corporation that provides best-of-breed
business solutions, leveraging technology, delivered by best-in-class people”. Hence quality is at
the core of the practices of the company. Infosys is committed to the cause of providing best-of-
breed quality solutions to the clients. The core values of Infosys is coded as CLIFE
 Customer Delight: A commitment to surpass the expectations of customers
 Leadership by Example
 Integrity and Transparency
 Fairness
 Pursuit of Excellence
As we can see Customer delight is of prime importance to Infosys and hence it does not
compromise on quality of delivery. Infosys charges a premium from its clients for its quality of
service and its reputation as a reliable provider of solutions and services.
 Brand
Infosys is a very powerful brand in the world of information technology. It was India's second
largest exporter of IT services with annual revenues of $7 billion and a market capitalization of
nearly $26 billion in 2012. Over the years, it has built its reputation as the Indian IT bellwether
whose credo is to "under-promise and over-deliver." Infosys and its iconic co-founder, N.R.
Narayana Murthy, are globally admired and respected for delivering excellence while conducting
business in a transparent and ethical manner. All this has created a very strong brand for Infosys,
a brand which is associated with quality, reliability, innovation etc.

 Location Advantage
Being an Indian company is source of several advantages for Infosys
 Enables in acquiring crucial talent at low cost
 India is a favored destination for outsourcing and offshoring because of cost and other
advantages. Infosys, being one of the leading IT companies of India is often the favored
choice of many clients
 The government of India has extended several policy advantage to the Industry like SEZ,
Software Technology Parks (STP), Tax Incentives etc. Numerous industry promotion
programs by the Department of Electronics and Information Technology (DEIT)
continues to give a fillip to the IT
 State of Art Training Facilities and Focus on Talent Creation

Infosys' Global Education Center, a training facility for new joinees in the company, is the largest
corporate education center in the world. Located in the 337-acre Infosys Mysore campus, it can
train 14,000 employees at a time. Total investment in the education center in Mysore was Rs.
2,055 crore of which Rs. 350 crore had been invested in development of Software Development
Blocks and related services, and Rs.1,705 crore was invested in education and training-related
infrastructure. The Mysore facility has 147 training rooms, 485 faculty rooms, 42 conference
rooms, five assessment halls, an induction hall, a cyber café and two state-of-the-art libraries
which can house over 140,000 books. There are seven food courts in the campus that can cater to
approximately 10,871 people at any given time.
Infosys also has its on-campus job skills programme, Campus Connect, covering around 510
engineering colleges across different regions of the country. It helps the organization in
developing people before they join the organization and also know about the talent pool in
different colleges.
Employees in the organization are encouraged to go for certifications and trainings. Training and
certifications undergone also form a part of the performance appraisal process. Hence the top
management incentivizes learning.
 Leadership
Throughout its 32-year history, Infosys has been blessed by the leadership of some of the most
respected personalities. The founders like NR Narayana Murthy and Nandan Nilekani enjoy
iconic status in the country and abroad for their leadership qualities and for their works. Other
than the founders, K.V Kamath, Mohandas Pai, Ashok Vemuri etc, are well known leaders who
steered the ship and kept the momentum of Infosys going even in tough times. Even though it has
faced some leadership crisis off late, the return of Narayana Murthy as the at the helm of affairs
has steadied the organization to a great extent.

SWOT Analysis
Strengths
 Infosys boosts a strong presence in India which provides it with cost advantage over
competitors: Infosys has 87 global development centers most of which are in India. Apart from
that India boasts a large pool of highly skilled employees. The company's strong presence in India
is a cost advantage over competitors which enables the company to be price competitive. Infosys
has a very strong brand presence in India because of which it attracts the best talent present in the
market. It has been voted as the “Best Employer” in India.
 Robust alliances network: Infosys' services and business solutions are strengthened by alliances
with leading technology partners. Infosys partnerships focus on developing solutions that
incorporate Infosys intellectual property and the alliance partners' technology and services. Its
global alliance partners include Microsoft, SAP and Oracle.
 Well defined service portfolio: In last one decade Infosys was able to build solid capability
including matured processes and team in all the key vertical including BFSI, Retail, Oil and Gas
etc.
 Scale: Infosys has 1, 56,688 full time employees, with a strong presence in India and number of
delivery center across the globe.
 Focus on Innovation: Infosys has dedicated about $100M to support innovative ideas coming
from Mobility, cloud and Big data. Infosys is also ranked 32 nd in the most innovative companies
in the world.
 Less Risky: Large cash in hand, over $4 Billion and no long term debt. It will help make further
strategic acquisition in Europe and US.
 Strong Relationship with Clients: Almost 98% of its business comes from existing customers.
It has total 798 clients and out of which twelve are $100M+. Infosys benchmarks its services
against internationally recognized quality standards including CMM level 5, ISO 9001-2000.
Infosys boosts many clients from the Fortune 500.
 Infosys also has a strong corporate culture: Infosys management focuses on nurturing a
“family-oriented” culture where each employee is called “Infoscion” (Infosys family member)
which breeds loyalty and motivation in employees.
Weakness
 High dependence on clients located in the United States and Europe: The company’s
revenues are highly dependent on clients primarily located in the The USA and Europe, as well as
on clients concentrated in certain industries. In FY2013, FY2012 and FY2011, approximately
62.2%, 63.9% and 65.3% of Infosys’ revenues were derived from projects in North America.
During the same period, approximately 23.1%, 21.9% and 21.5% of the company revenues were
derived from projects in Europe. The major part of revenue comes from the financial and
insurance sectors which were majorly impacted by recession.

 Senior management turnover: Infosys has been under the grip of significant high profile senior
management exits. The senior management turnover at the company is indicative of the inherent
problem related to power struggle within the company. Among the executives who left the
company in 2013, prominent were Ashok Vemuri, Head of Infosys’ North American business.
Further, Basab Pradhan, Head of global sales operations also resigned from the company in 2013.
Later, Kartik Jayaraman, heading BPO sales in Australia also resigned from the company. The
company has witnessed several other senior management personnel leaving the company.
Unstable management amid aggressive competition and slowing market is likely to adversely
impact the company’s ability to drive growth.
 Attrition rate: Although Infosys attracts some of the best talent present in the market; it has a
problem retaining it due to the low compensation structures. Infosys faces the highest attrition
rate of 16% in the Indian software industry. Clients are also concerned about losing key people
who are working on their projects. Infosys will need to take efforts to retain employees such as
hike in compensation structure and increase lateral hiring.
 Size: 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).
 Declining Growth and Margin: Gross margin (FY13) has declined to 37% from 41%.Company
recently has withdrawn EPS guidance and expect to grow about 6% to10% which is below the
Industry growth published by Nasscom.
 Pricing Pressure: In order to generate growth, Infosys has indicated that it may go down in
pricing that may not a good sign as it will further impact margin. On an annual basis pricing is
down by 3%.
 High amount of Intangible: On its balance sheet it is carrying over $2 Billion as intangible and
most of them have come from acquisition process. Infosys should have proper strategy to realize
this value or else will lead to cash erosion.
Opportunities
 Poised to benefit from the acquisition of Lodestone Holding: In October 2012, Infosys
acquired Lodestone Holding, a global management consultancy firm based in Switzerland, for
approximately CHF330 million ($348.2 million). Lodestone Holding advises international
companies on strategy and process optimization, and provides business transformation solutions
enabled by SAP.
 Increasing demand for cloud computing services: The worldwide demand for cloud computing
services is expected to record strong growth in coming years. Cloud computing is a computing
infrastructure model, which enables delivery of SaaS. This reduces the upfront royalty or
licensing payments, investment in hardware and other operating expenses. According to industry
estimates, the global cloud computing market is forecasted to reach approximately $160 billion in
2013.
 Growth of BigData: Infosys has increased its focus on offering Big Data solutions in the recent
times. For instance, in February 2013, the company entered the Big Data market with the launch
of BigDataEdge, an analytics platform that enables real-time discovery of data across internal

systems and external sources such as Twitter and Facebook. The positive outlook for the Big
Data market will provide Infosys an opportunity to gain market share in the future.
 Growth in China: There is a new and emerging market in China as the country undergoes a huge
industrial revolution.
 Innovation: Infosys has already committed $100M to further support this initiative.
Threats
 Intense competition: Infosys operates in a highly competitive and rapidly evolving IT services
industry. The company competes with large consulting firms, large multinational technology
firms, infrastructure management firms, software companies and in-house IT departments of large
corporations. Intense competition may lead to pricing pressures and threatens to erode the
company's market share and profitability in long term.
 Employee attrition may increase personnel costs: The Company is subject to the threat of
employee attrition like other companies operating in Indian IT services industry. According to
industry estimates, India is set to witness the highest attrition rate globally. In 2013, the attrition
in India is expected to be around 27%. Due to manpower intensive business model of Infosys, its
success and ability to grow are dependent on its ability to hire and retain talented people.
Although the company continues to make investment in employee development initiatives
through up-gradation of skills, re-skilling and leadership development, it is facing increasing
attrition.
 Unstable economic environment, pricing pressure
 The global economy has slowed down in the last 5 years. The global economy has undergone
significant turmoil amid stock market volatility, difficulties in the financial services sector,
softness in the housing markets, tightening of the credit markets, concerns of inflation and
deflation, reduced corporate profits and capital spending, reduced consumer spending and other
economic difficulties. According to industry estimations, the global outlook continues to be
characterized by uneven and sluggish growth performances.
 Vendor Consolidation: Now most of the big clients want to consolidate their number of vendors
and competitors such as Cognizant, Accenture are able to offers well differentiated offering and
strategies to clients and that may result in reduced project budget for Infosys.

Strength Weakness
 Cost Advantage  Senior management

 Well defined portfolio turnover
 Focus on innovation  Attrition
 Robust Alliance  Declining Margin
 Strong relation with client  High amount of Intangible
Opportunity Threat
 Lodestone Holding  Intense Competition

 Growth of BigData  Unstable economic
 Increase in demand for environment
Cloud computing services  Vendor Consolidation
McKinsey 7S Framework
Leadership Style:
Infosys believes that leadership is one of the most important ingredients for organizational success. There
is huge emphasis on developing the next generation of leaders in the company; for this they have
established “Infosys Leadership Institute”. Top Management follows an open door policy; continuous

sharing of information takes inputs from employees for decision making and builds personal rapport with
the employees. This has made possible a smooth transition of top level positions in the company.
Staff:
Since Infosys is a knowledge based industry it focusses on the quality of human resources. Out of the
total personnel, about 90 per cent are engineers. At the entry level, it emphasizes on selecting candidates
who find the company’s meritocratic culture satisfying, superior academic records, technical skills, and
high level of openness to learn new things. The company emphasizes on training and development of its
employees on continuous basis and spends 2.65% of its revenues on up gradation of employees’ skills. In
spite of thousands of people joining every month Infosys has been able to maintain the quality of its
training due to its highly matured process capabilities and investment in infrastructure.
Shared Values:
Infosys lays a lot of emphasis on its core values which make up the organizations culture. The core values
are
 Customer Delight – A commitment to surpass customer expectations

 Leadership by Example – Set standards across industry
 Integrity and Transparency – Commitment to be ethical, sincere and open
 Fairness – Earn trust and respect
 Pursuit of Excellence – Commitment to strive relentlessly, to improve and become the best
Organization Structure
Infosys follows a mix of both hierarchy and flexibility. At the top there is high hierarchy with COO, CFO,
Heads of the Admin department, Communication System and Information System reporting directly to
the CEO. However at the lower level Infosys has adopted a free structure devoid of hierarchies. Everyone
is known as Associate irrespective of his position. Software development is done through teams and a
team leader in one project might be replaced by other on another project.
As the company has grown and the earlier employed project matrix structure was removed and the
company was divided into IBU’s (Industry Business Units). Each IBU is concentrated on a particular
sector. The Manager of an IBU has fill authority to take decisions for the future of the IBU. A
decentralized system was introduced to reduce the response time to customers. However after 2010 within
a IBU project matrix structure was re-introduced. Recently the IBU structure has been further refined to
take into geographic growth opportunities.
There has been news that consulting firm McKinsey is in talks with Infosys to re-organize its structure.
Major changes in the sales structure are expected in the coming years. (Organizational structure attached
at the end)

Skills:
From the last year, Infosys has made mandatory for every employee to clear predefined certifications,
domain as well as technical, in order to be eligible for appraisal. This is one of the initiatives taken be
Infosys which shows their effort to build competencies. Infosys has entered the balance score card Hall of
Fame for executing strategy for achieving breakthrough performance result using balance score card.
Strategy:
Infosys has a client focused strategy to achieve growth. Instead of focusing on large number of small
client Infosys focused on acquiring few big ones. In order to cater to its clients Infosys focuses on
providing custom solutions. Another differentiating factor is that Infosys commands premium ma rgins to
its clients. And these margins are not negotiable and instead of taking a low margin the company focusses
to not take a client. This has helped in making an image for itself in the market.
Infosys has focused on expanding the nature and scope of engagements for the existing clients by
increasing the size and number of the projects and extending the breadth of service offering. For new
clients it provides value added solutions by leveraging its in depth industry experience. It increases its
recruiting business with clients by providing software re-engineering maintenance, infrastructure
management and business process management services which are long term in nature.
Infosys plans to establish new sales and marketing and increase its global reach. It plans to increase reach
in China through Infosys China, in the Czech Republic and Eastern Europe directly and through Infosys
BPO. Similar plans are in place for Latin America and Australia.
Infosys invests in developing a premium brand identity in the marketplace by participating in media and
industry analyst events, sponsorship of and participation in targeted industry conferences, trade shows,
recruiting efforts, community outreach program and investor relations.
Infosys is known for its organic growth strategy through strategic alliance with leading technology
providers take advantage of emerging technology in a mutually beneficial and cost competitive manner.
Core Strategies at Present
 Global Delivery model – Producing where it is most cheap and selling where it is most costly
 Moving up the Value Chain – Involved in software cycle in the earliest stage of life cycle
 PSPD Model – Predictability of Revenues, Sustainability of revenue, Profitability and De-Risking
for Risk Management
 Little differentiation in low end services and high differentiation in high end services of value
chain like software products
 Focus on quality, timely delivery and customer relationship management.

Finding the FIT
BCG MATRIX
The growth-share matrix aka BCG Matrix helps us to analyze the business units in a corporation.
Infosys BCG Matrix
High
Software development Application Maintenance

Growth Rate
Low
BPO KPO
High Low
Relative Position (Market Share)
Cash Cows Is where the company has a high market share and the growth of the industry is at a low pace.
These units generate more cash than what is required for maintenance. For Infosys BPO is one unit which
acts as a Cash Cow given the current economic conditions.
Dogs are units with low market share, slow growing industry. Infosys through the years has developed a
significant knowledge base. KPO requires advanced analytical and technical skills as well as a high
degree of specialist expertise which is present at Infosys.
Question Marks are business operating in a high growth market, but having a low share. Question marks
have a potential to gain market share and become stars, and eventually cash cows when market growth
slows. If question marks do not succeed in becoming a market leader, then after perhaps years of cash
consumption, they will degenerate into dogs when market growth declines. Application maintenance is
one such are for Infosys considering fact that many clients might move to other competitor if the services
provided by Infosys is not up to the mark.
Stars are high market share in a growing market. The core competency of Infosys helps it in making
Software customizable to the needs of the client and of high quality. The market for software’s is growing
and Infosys already controls a significant share in the market.

SWOT Matrix
Strength Weakness
Opportunity Aggressive Strategy to diversify in Acquisition of Consultancy Firms in

Asia different sectors
Threat Diversification to serve more Divestiture of consultancy in

verticals like Airlines, Telecom etc. Transport, construction
 The biggest opportunity in front of Infosys is that the domestic market is set to grow at more than
20%. Infosys currently has a major share of its revenue coming from Europe and United States.
The BPO market, software development is at the nascent stage and there is a lot of chance for
growth in Asia.
 Infosys has no long term debt and has some capital available with it which they can use for
acquiring KPO and companies in domains of BFSI, Retail, Manufacturing and telecom.
 Infosys already has well established clients in the market many from the Fortune 500. Instead of
targeting new clients Infosys can build on the these to capture more and more of the market. At
the same time Infosys can diversify in verticals like Airlies, Telecom where it is not present
currently.
 Infosys should drop its business which are currently running in losses in domains of transport,
construction and utilties.

Recommendations
On the basis of the analysis we have come up with the following recommendations for Infosys:
 Diversify into other markets to reduce dependency on North America: Infosys is over
dependent on North America for its revenues. It derives a whopping 62.2% of its revenues from
North America. When compared to 27% of revenue that TCS generates from North America, the
figure of 62.2% is uncomfortably high. Given the fact that the Obama administration is against
heavy outsourcing to Indian companies, any step by the USA government to curtail outsourcing
would adversely affect Infosys. Hence diversifying to other markets and reducing its dependence
on North America would hold it in good stead in the future. Infosys derives 62.2% of its revenues
from North America, 23.1% from Europe, 2% from India and only 12.6% from the rest of the
world. Hence it has a huge scope of reducing its dependence on North America.
 Change the rigid pricing policy and stubborn high pricing model: Infosys offers high quality
services to its clients and charges a premium. It has been known to follow a very rigid high
margin pricing model. However, with the increase in the competition level and the mushrooming
of many low cost start-ups in the industry, the rigid high margin policy can become a
disadvantage for Infosys. Because of undifferentiated services and presence of many low cost
alternatives, prospective clients might go to competitors who deliver high quality at lower cost.
This concern is especially relevant during periods of slowdown and economic downturn. Under
such circumstances the clients are not willing to splurge for IT solutions and will most likely
settle with low cost options.
Keeping all the above mentioned concerns in mind, Infosys should make its pricing policy more
flexible. This will not only help the company in expanding its client base, it will also make it
easier to retain its long term clients.
 Resolve the leadership crisis: Infosys has been under the grip of significant high profile senior
management exits. The senior management turnover at the company is indicative of the inherent
problem related to power struggle within the company. Among the executives who left the
company in 2013, prominent were Ashok Vemuri, Head of Infosys’ North American business.
Further, Basab Pradhan, Later, Kartik Jayaraman, heading BPO sales in Australia also resigned
from the company. The company has witnessed several other senior management personnel
leaving the company. In order to achieve the status which it hold in the past it is very Important
for Infosys to keep its upper management stable and resolve the issues because of which all these
people have left.
 Reduce cost by decreasing the bench strength and by laying off non-performers: Bench is
important and necessary for IT companies. In an industry which is plagued by high attrition rate,
bench acts as a hedge against high attrition. It also helps the organizations to quickly get started
on a project when the deadlines are strict and tight. In ideal scenario, IT companies have a bench
strength of 20%. However Infosys has bench of around 30%. This means extra cost for the

company without any added revenue from 30% of the work force. This can have serious cost
implications, especially at a time of economic slowdown. Infosys should take concrete measures
to reduce its bench strength. This can be done by laying off poor performers. Though it is a
drastic measure, the circumstances entail such a response. This would help the organization in
improving the utilization of resources and cut cost.
 Stem the attrition of top talent from the company: Attrition rate is high in most of the
companies in in IT industry. Availability of better prospects with the increase in the number of
players has been one of the major reasons of attrition.
Off late, however, the attrition rate at Infosys has been higher than its competitors. The attrition
level for the quarter ended September 2013 was 17.3%. To add to the concern, many of the high
performers are leaving the company. While an above average attrition level might not be a very
high concern, the loss of crucial talent from the company is surely a matter of concern. Infosys
invests very heavily on the training and development of its employees. If talented employees
leave the organization, after reaping the benefits of its training program, it is a major loss.
Recruiting new employees and training them involves a lot of cost. Also, many a times the top
talents are irreplaceable.
Hence, Infosys should take steps to ensure that the best talents of the organization are retained.
Infosys deferred the salary hike the in the fiscal year 2012-2013. This led to high attrition of
talented employees. High performers, who deserved a salary hike left the organization to join its
competitors. The top management should ensure that the top performers are adequately rewarded
for their contributions. Regular salary hikes, higher than average bonus etc. should be given to the
best performers. Though it would lead to increase in cost, it would save the cost of replacing the
good performers with new employees and the cost of training the new recruits.

Ensure the top performers are adequately paid
High differential between high and low performers
Stem the attrition of top
talent from the company
Presence of large number of low cost alternatives can be a

Change the rigid pricing threat
policy and stubborn high Increase flexibility in pricing to increase the customer base
Transition from a stubborn high margin model to a flexible
pricing model pricing model
Eight high profile exits since the return of Narayana Murthy

The image of Infosys has taken a hit
Resolve the leadership A lot of effort spent on putting house in order
crisis Infosys has to resolve the leadership issue and come clean
Diversify into other 62.2% of revenue from North America

Reduce overdependenc on North America
markets to reduce Anti Outsourcing policies in North America can adversely
dependency on North affect Infosys
America
Reduce cost by Increase the percentage of utilization by reducing bench

strength and laying off low performers
decreasing the bench
strength and by laying off
non-performers

Conclusion
Infosys is not in a stable position in terms of its leadership. This coupled with the challenges that IT
industry is facing at this moment has adversely affected its performance. The industry analysis, conducted
as a part of the project, throws light on the issues at the industry level. The economic environment in
India and globally is not very conducive for the industry. The slowdown in US and Eurozone crisis has
meant that the profits and revenues of many IT companies have suffered. Porter’s Five Forces Analysis of
the industry has revealed that the intensity of rivalry in the industry is very high. There are several big
players like Infosys, TCS, Cognizant, Wipro etc. Other companies are coming up at rapid pace. Hence the
level of completion is uncomfortably high. Other offshoring and outsourcing options are also. Because of
the presence of large number of players, the bargaining power of the buyers is high. New start-ups are
coming up at a rapid pace.
Internal audit of Infosys revealed the competitive advantage, strengths, weaknesses etc. of the firm. The
organization is known for the quality of service that it delivers to the clients. It charges higher than many
of its competitors because of this reason. Infosys is a well-known and powerful brand in the IT industry
and is globally renowned. State of art training facilities and focus on development of talent are strengths
of the organization. The leaders who have been at the helm of affairs in the company are globally
renowned. This adds to the credibility of the brand. However, the company is facing leadership
challenges off late. There have been several high profile exits and the company has been criticized in
various forums for not giving opportunity to promising talents who are non-founders to lead the company.
Revenue and profits of the organization have also suffered because of the economic condition. The
organization is also facing high attrition rate. Retaining top talent has been an issue for the organization
for long. Keeping these challenges in mind the company should start diversifying to non USA markets.
This would decrease its over dependence on USA. Keeping the scenario in the industry in mind, Infosys
should also revisit its pricing policy. A rigid high margin policy will not help its cause in the current
scenario. The organization should also take concrete steps to stem the attrition of top talent from the
company. The top management should ensure that the brightest talents of the organization are adequately
compensated and there should be a high differential between the benefits and pay of a top performer and a
low performer in the organization. Only then would it be able to retain bright talent.

References
 http://en.wikipedia.org/wiki/Information_Technology_Act_2000
 https://www.deloitte.com/assets/Dcom-India/Local%20Assets/Documents/
Thoughtware/State%20of%20economy.pdf
 http://www.ibef.org/industry/indian-it-and-ites-industry-analysis
 http://www.ficci.com/sector/21/Project_docs/FICCI_website_content_-IT.pdf
 http://www.abenge.org.br/Arquivos/90/90.pdf
 http://www.marketline.com September issue
 http://articles.economictimes.indiatimes.com/2013-07-12/news/40536671_1_lodestone-
ceo-sd-shibulal-ashok-vemuri
 http://www.infosys.com/investors/reports-filings/annual-report/annual/Documents/AR-
2011/Additional-Information/Management_Structure.html
 http://articles.economictimes.indiatimes.com/2013-12-24/news/45540068_1_3-5-lakh-2-
75-lakh-rs-7-lakh
 http://engineering.learnhub.com/lesson/21444-83-percent-of-indian-engineering-
graduates-unfit-for-employment-survey-findings
 http://businesstoday.intoday.in/story/infosys-woes-profit-revenue-growth/1/191782.html
 http://www.nytimes.com/2011/11/26/business/philippines-overtakes-india-as-hub-of-call-
centers.html?pagewanted=all&_r=0
 http://www.tcs.com/investors/Documents/Presentations/TCS_Analysts_Q4_13.pdf
 http://www.tcs.com/investors/Documents/Annual%20Reports/
TCS_Annual_Report_2012-2013.pdf
 http://www.infosys.com/investors/reports-filings/annual-report/annual/Documents/
Infosys-AR-13.pdf
 http://www.tcs.com/about/tcs_difference/Pages/default.aspx
 http://www.nasscom.in/industry-ranking
 http://www.hbs.edu/faculty/Pages/item.aspx?num=43438
 http://deity.gov.in/content/export-promotion-schemes-dpl-elec
 http://www.infosys.com/newsroom/press-releases/Pages/global-education-center-II.aspx
 http://www.infosys.com/investors/reports-filings/annual-report/annual/Documents/
Infosys-AR-13.pdf
 http://www.tcs.com/investors/Documents/Annual%20Reports/
TCS_Annual_Report_2012-2013.pdf
 http://businesstoday.intoday.in/story/infosys-woes-profit-revenue-growth/1/191782.html
 http://www.business-standard.com/article/companies/tcs-vs-infosys-know-your-leader-
113101600408_1.html
 http://www.infosys.com/about/Pages/history.aspx
 http://www.tcs.com/investors/Pages/Corporate_Strategy.aspx

 http://www.tcs.com/investors/Pages/Corporate_Strategy.aspxhttp://www.tcs.com/
investors/Pages/Corporate_Strategy.aspxhttp://www.tcs.com/investors/Pages/
Corporate_Strategy.aspx


Strategic Analysis of Infosys

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Strategic Analysis of Infosys

Uploaded by

Copyright:

Available Formats

Strategic Analysis of Infosys

Strategic Management Page 1

Strategic Management Page 2

Strategic Management Page 3

Strategic Management Page 4

Firm Revenues Employee Headquarters

Tata Consultancy Services $11.57 billion 254,076 Mumbai

Cognizant Technology $7.05 billion 185,045 Teaneck, New

Infosys $6.69 billion 153,761 Bangalore

Wipro $5.73 billion 140,569 Bangalore

HCL Technologies $4.3 billion 85,335 Noida

Strategic Management Page 5

The Positives of the budget have been

The Negatives of the budget have been

Strategic Management Page 6

Strategic Management Page 7

Social Environment Analysis

Strategic Management Page 8

Technology Environment Analysis

Strategic Management Page 9

Hardware and OS Technology

Strategic Management Page 10

Global Environment Analysis

Strategic Management Page 11

Threat from new entrants

The entry of a new firm is a function of two factors

Strategic Management Page 12

Bargaining Power of Suppliers

Bargaining Power of Buyers

Strategic Management Page 13

Threat of Substitute Products or Services

Rivalry amongst Competitors

Strategic Management Page 14

2. Easy availability of resources

Threat of substitutes Intensity of Rivalry Bargaining power of buyer

Bargaining power of suppliers

Strategic Management Page 15

The following are the strengths of TCS:

Strategic Management Page 16

1. The IT industry will keep growing at a fast pace as

1. No 1 IT exporter of India and an established brand

Strategic Management Page 17

Strategic Management Page 18

Strategic Management Page 19

 State of Art Training Facilities and Focus on Talent Creation

Strategic Management Page 20

Strategic Management Page 21

Strategic Management Page 22

Strategic Management Page 23

 Cost Advantage  Senior management

 Lodestone Holding  Intense Competition

Strategic Management Page 24

 Customer Delight – A commitment to surpass customer expectations

Strategic Management Page 25

Core Strategies at Present

Strategic Management Page 26

Infosys BCG Matrix

Software development Application Maintenance

Relative Position (Market Share)

Strategic Management Page 27

Opportunity Aggressive Strategy to diversify in Acquisition of Consultancy Firms in

Threat Diversification to serve more Divestiture of consultancy in

Strategic Management Page 28