3 PEST ANALYSIS Political Economic Political stability Government owned companies and PSUs have decided to give more IT projects to Indian IT companies.Terrorist attack or war.Global IT spending (demand)Domestic IT Spending (Demand)Currency FluctuationReal Estate PricesAttrition
4 PEST Analysis Social Technological Language spoken: English Education: A number of technical institutes and universities over the country offer IT education.Working age populationTelephonyInternet BackboneNew IT technologies Technologies like SOA, Web 2.0, High-definition content, grid computing, etc
5 Porter’s Five Forces Model Threat of Substitutes: MediumOther offshore locations such as Eastern Europe, the Philippines and ChinaPriceBargaining power of supplier: High to LowDue to slowdown, the job-cuts, the layoffs and bleak IT outlook.No longer Demand and supply of IT professionalsVast talent pool – fresher's and experienced.
6 Porter’s Five Forces Model Barriers to Entry : LowLow capital requirements.Large value chain, space for small enterprises.Bargaining Power of Customers: Very High1. Large number of IT companies2. Huge decline in IT expenditureRivalry Among Firms: High'low-cost, little-differentiation' positioning.Strong competitors – few numbers of large companies.
7 Infosys Profile Founded on 2nd July 1981 with a capital of Rs.10,000 Went Public in 19931st Indian Company to be listed on Nasdaq on 11th March 1999Global footprint : Over 50 offices and development centersEmployees: 103,905 (As on 30th June 2009)Certified at SEI- CMM Level 5.Major Clients: British Telecom, BanAmerica, Citigroup, Walmart
8 Infosys Resources Tangible People Intangible Brand Equity Capital Global ReachIntangibleBrand EquityTrust & GoodwillCorporate Culture
9 Infosys Capabilities Global Delivery Model Training Capabilities Operational EfficiencyManagement/LeadershipHigh Quality Standards
10 VIRU Analysis IBM - Brand Equity - Global Reach - R & D focus - Bouquet of ServicesInfosys- Brand Image, Culture- Operational Efficiency- Marketing StrategyMastek- No growth strategies- High operational costs, Limited reach- Expertise in Insurance SectorL & T Infotech- Weak Brand Image- No cost efficiency, No reach- No special service or industry capability
12 VALUE CHAIN ANALYSIS Primary Activities Inbound Logistic Operation Outbound LogisticMarketing And SalesPost Sales Service
13 CONTD…… Secondary Activities Human Resource Management Technology ManagementInfrastructure
14 McKINSEY’S 7 S MODEL Staff (Human Resources): Leadership Style: Strategy:Client-focused strategy to achieve growthFocuses on limited number of large organizations throughout worldCaters clients through custom-built softwaresCommands premium marginsDoes not compromise on quality for low-cost contractsQuality driven model rather than cost-differentiating model.Increase business from existing and new clientsExpand geographicallyEnhance solution setDevelop deep industry knowledgeEnhance brand visibilityPursue alliances and strategic acquisitionsStaff (Human Resources):Knowledge-based industry - Focuses on the quality of the human resources90% EngineersAt the entry levelFind the company’s meritocratic culture satisfyingSuperior academic recordsTechnical skillsHigh level of learn ability.Emphasizes on T&D on continuous basisSpends about 2.65 % of revenue on up gradation of employees’ skillsHigh training standardHigh matured processes capabilitiesInvestment in infrastructure.Shared Values:Customer Delight-A commitment to surpassing customer expectations.Leadership by Example-A commitment to set standards in business and transactions and be an exemplar for the industry and teams.Integrity and Transparency-A commitment to be ethical, sincere and open in our dealings.Fairness- A commitment to be objective and transaction-oriented, thereby earning trust and respect.Pursuit of Excellence-A commitment to strive relentlessly, to constantly improve ourselves, our teams, our services and products so as to become the bestLeadership Style:Essential for organizational success.Based on high business vision and supportive styles.Emphasis on developing leadership qualities among employees.“Infosys Leadership Institute”Open door policyContinuous sharing of informationEmployee input for decision makingBuilding personal rapport with employeesSkills:Mandatory for every employee to clear 7 predefined certifications (domain as well as technical) in order to be eligible for appraisal.This is just one of the initiatives taken by Infosys which signifies the efforts taken for building competencies. Apart from internal initiatives likeKnowledge managementInfosys has been CMM-Level 5 certified for its process capabilitiesOrganizational Structure:Free form organization devoid of hierarchiesEveryone is known as associates irrespective of his position in the company Software development is undertaken through teamsConstitution of teams is based on the principle of flexibility
17 CORPORATE LEVEL STRATEGIES Core Strategies:Firm believer in “Organic growth” and acquire only those companies in line with strategic goalsGlobal 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, De-risking” for risk management.
18 CORPORATE LEVEL STRATEGIES Actions Taken:1. To maintain low-cost advantage they have opened offices in Czech Republic, Mauritius, Poland, Philippines, Thailand and Mexico2. Invested in developing training centers3. Improved quality capabilities – CMM level 5i company4. Infosys Consultancy established to provide high end services in value chain5. Has hedged currency for more predictability of revenues (risk management)
19 GENERIC STRATEGIES Low cost Global delivery 24/7 Model Little differentiation in low-end services of value chainHigh differentiation in high end services of value chain like software products and package solutionsFocus on quality, customer relationship management, timely-delivery
20 SWOT Analysis STRENGTHS WEAKNESSES Trusted Brand & Client Relations Proven GDMWide spectrum of ServicesLeadership & ManagementQuality StandardsWEAKNESSESDependence on BFSI Segment for revenuesDependence on North America for revenuesWeak Player in domestic MktRising Operating ExpenditureLow R & D focus
21 SWOT Analysis THREATS OPPORTUNITIES Intense Competition Untapped Domestic MarketNew GeographiesAcquisitionsHigh End ConsultingIntense CompetitionHigh dependency on small no. of clientsCurrency Fluctuations
22 RecommendationsReduce Dependency on BFSI, North America, Explore new marketsR & D FocusHunt for AcquisitionsFocus on cost reductionTap Domestic Market