INFOSYS

IT Service Industry Overview

PEST ANALYSIS
Political Political stability Economic Global IT spending (demand) Domestic IT Spending (Demand) Currency Fluctuation Real Estate Prices Attrition

Government owned companies and PSUs have decided to give more IT projects to Indian IT companies. Terrorist attack or war.

PEST Analysis
Social Language spoken: English Education: A number of technical institutes and universities over the country offer IT education. Working age population Technological Telephony Internet Backbone

New IT technologies Technologies like SOA, Web 2.0, High-definition content, grid computing, etc

Porters Five Forces Model

Threat of Substitutes: Medium 1. Other offshore locations such as Eastern Europe, the Philippines and China 2. Price Bargaining power of supplier: High to Low 1. Due to slowdown, the job-cuts, the layoffs and bleak IT outlook. 2. No longer Demand and supply of IT professionals 3. Vast talent pool fresher's and experienced.

Porters Five Forces Model

Barriers to Entry : Low 1. Low capital requirements. 2. Large value chain, space for small enterprises. Bargaining Power of Customers: Very High 1. Large number of IT companies 2. Huge decline in IT expenditure Rivalry Among Firms: High 1. 'low-cost, little-differentiation' positioning. 2. Strong competitors few numbers of large companies.

Infosys Profile
Founded on 2nd July 1981 with a capital of Rs.10,000 Went Public in 1993 1st Indian Company to be listed on Nasdaq on 11th March 1999 Global footprint : Over 50 offices and development centers Employees: 103,905 (As on 30th June 2009) Certified at SEI- CMM Level 5. Major Clients: British Telecom, BanAmerica, Citigroup, Walmart

Infosys Resources
Tangible
People
Capital Global Reach

Intangible
Brand Equity Trust & Goodwill Corporate Culture

Infosys Capabilities
Global Delivery Model Training Capabilities Operational Efficiency Management/Leadership

High Quality Standards

VIRU Analysis
IBM - Brand Equity - Global Reach - R & D focus - Bouquet of Services Infosys - Brand Image, Culture - Operational Efficiency - Marketing Strategy Mastek - No growth strategies - High operational costs, Limited reach - Expertise in Insurance Sector L & T Infotech - Weak Brand Image - No cost efficiency, No reach - No special service or industry capability

Sustainable Competitive Advantage

Valuable Inimitable Rare Unsubstituable Competitive Consequences Performance Implication

IBM Infosys

Yes Yes

Yes Yes

Yes Yes

Yes No

Sust. comp adv Temp comp adv.

Above avg Avg to Above avg

Mastek L&T Infotech

No No

No No

Yes No

No No

Comp parity Avg Comp disadv. Below avg

VALUE CHAIN ANALYSIS

Primary Activities Inbound Logistic Operation Outbound Logistic Marketing And Sales Post Sales Service

CONTD
Secondary Activities Human Resource Management Technology Management Infrastructure

McKINSEYS 7 S MODEL
Strategy: Staff (Human Resources): Knowledge-based achieve Focuses Shared Values: Leadership Style: Client-focused strategy toindustry - growth on the quality

Essential for organizational success. Customerof the human resources large organizations throughout Delight-A commitment to surpassing customer Focuses on limited number of Skills: 90% Engineers expectations.Based on high business vision and world Mandatory for everylevel At the entry employee to clear 7 predefined supportive styles. Leadership by through custom-built softwaresstandards in Caters clients Example-A commitment to set certifications (domainthe well as technical) in order to be Organizational Structure: Find as companys meritocratic culture business and Emphasis transactions developing leadership Commands premium onand be an exemplar for the industry satisfying eligible for appraisal. margins of hierarchies Free form organization devoid and teams. qualities among employees. Does not compromiseinitiatives taken by Infosys which This is just one Superiorassociates irrespective of his position of the on quality records Everyone is known as academicfor low-cost contracts Leadership Institute Integrity andInfosysrather commitment to be ethical, Transparency-A Technical skills Quality the efforts taken for than cost-differentiating model. signifies company Software development is undertaken building competencies. Apart in the driven model Open learn ability. High level ofour from sincere and open in doordealings. Increase business policyexisting and new clients from internal initiatives like through teams Continuous sharing Fairness- Emphasizes on T&D on continuous basis transactionA commitment to be of information Expand geographically objective and Knowledge management based on the principle of flexibility Constitution of teams is Spends about 2.65 % offor decision making of Employee input revenue on up gradation oriented, thereby earning trust and respect. Enhance CMM-Level Infosys has beensolution set 5 certified for its process employees skills Building personal Pursuit of Excellence-A commitment towith relentlessly, to Develop deep industry rapport strive capabilities training standard knowledge High employees constantly improve ourselves, our teams, our services and Enhance brand visibility High matured processes capabilities products so as alliances and strategic acquisitions Pursue to become theinfrastructure. Investment in best

INFOSYS BCG MATRIX - USA

INFOSYS BCG MATRIX - INDIA

CORPORATE LEVEL STRATEGIES

Core Strategies: Global Delivery Model Producing where it is most cost effective to produce & selling where it is most profitable to sell. Moving up the Value Chain Getting involved in a software development project at the earliest stage of its life cycle. PSPD Model Predictability of Revenues, Sustainability of Revenues, Profitability, Derisking for risk management.

Firm believer in Organic growth and acquire only those companies in line with strategic goals

CORPORATE LEVEL STRATEGIES

Actions Taken: 1. To maintain low-cost advantage they have opened offices in Czech Republic, Mauritius, Poland, Philippines, Thailand and Mexico 2. Invested in developing training centers 3. Improved quality capabilities CMM level 5i company 4. Infosys Consultancy established to provide high end services in value chain 5. Has hedged currency for more predictability of revenues (risk management)

GENERIC STRATEGIES
Low cost Global delivery 24/7 Model Little differentiation in low-end services of value chain

High differentiation in high end services of value chain like

software products and package solutions

Focus on quality, customer relationship management, timelydelivery

SWOT Analysis
STRENGTHS Trusted Brand & Client Relations Proven GDM Wide spectrum of Services Leadership & Management Quality Standards WEAKNESSES
Dependence on BFSI Segment for revenues Dependence on North America for revenues Weak Player in domestic Mkt Rising Operating Expenditure Low R & D focus

SWOT Analysis
OPPORTUNITIES
Untapped Domestic

THREATS Intense Competition

High dependency on small no. of clients Currency Fluctuations

Market New Geographies Acquisitions

High End Consulting

Recommendations
Reduce Dependency on BFSI, North America, Explore new markets R & D Focus Hunt for Acquisitions Focus on cost reduction

Tap Domestic Market