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Infosys SWOT

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Infosys is one of the largest businesses in India with a turnover in excess of $4 billion in 2008.
The company specializes in Information Technology (IT) and consulting. N.R. Narayana Murthy
and six others started the company in 1981, and it is now the largest IT company in India with its
headquarters in Bangalore (although it was started in Pune). It employs more than 90,000 IT
professionals and was famously rated Best Employer in India. Would you like a lesson on
SWOT analysis?

Opportunities

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

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

The strategic alliance between Infosys and Schlumberger gives the IT company access to
lucrative business in the gas and oil industries.

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

Threats

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

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

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

Bibliography
Wiki Infosys
Infosyss own official site
Business Today The Best Companies to Work for in India
Business Today 20 companies to watch in 2008
Disclaimer:
This case study has been compiled from information freely available from public sources. It is
merely intended to be used for educational purposes only.
It operates in a number of business sectors from banking to retail, and its services tend to
encompass end-to-end IT solutions which includes a whole bundle of added-value solutions from
infrastructure to software engineering. This SWOT analysis is about Infosys.

Strengths

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

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

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

Weaknesses

Infosys on occasion struggles in the US markets, and has particular problems in securing
United States Federal Government contracts in North America. Since these contracts are
highly profitable and tend to run for long periods of time, Infosys is missing out on

lucrative business. Added to this is the fact that its competitors do well in terms of
securing the same Federal business (and one should also take into account that many of
its competitors are domiciled in the US and there could be political pressure on the US
Government to award contracts to domestic organizations).

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

It is sometimes argued that Infosys is weaker when it comes to high-end management


consultancy, since it tends to work at the level of operational value creation. Competitors
such as IBM and Accenture tend to dominate this space.