Presentation on theme: "Strategy Management of Infosys"— Presentation transcript:
1 Strategy Management of Infosys Prepared By :01 : Dharmista Baria02 : Kushal Bhagat03 : Dipak BhayaniSubmitted To : ( Group : 1 )Prof . Hiren Patel
2 HistoryInfosys was founded on July 2, 1981 in Pune by N. R. Narayana Murthy and six others: Nandan Nilekani, N. S. Raghavan, Kris Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora, with N. S. Raghavan officially being the first employee of the company.Murthy started the company by borrowing INR 10,000 from his wife Sudha Murthy. The company was incorporated as "Infosys Consultants Pvt Ltd.", with Raghavan's house in Model Colony, north-central Puneas the registered office.
3 Infosys went public in Interestingly, Infosys IPO was undersubscribed but it was "bailed out" by US investment banker Morgan Stanley which picked up 13% of equity at the offer price of Rs. 95 per share.The share price surged to Rs. 8,100 by 1999 making it the costliest share on the market at the time.Infosys was among the 20 biggest companies by market capitalizationEstablished in 1981, Infosys is a NASDAQ listed global consulting and IT services company with more than 103,000 employees. From a capital of US$ 250, it’s grown to become a US$ 4 billion company with a market capitalization of approximately US$ 14 billion.
4 MilestoneYearDetail1981Infosys is established by N. R. Narayana Murthy and six engineers in Pune, India, with an initial capital of US$ 250 .Signs up its first client, Data Basics Corporation, in New York1983Relocates corporate headquarters to Bangalore1987Opens first international office in Boston, US1993Introduces Employee Stock Options (ESOP) program , Acquires ISO 9001/TickIT certification
5 YearDetail1994Moves corporate headquarters to Electronics City, Bangalore. Opens a Development Center at Fremont1995Opens first European office in the UK and Global Development Centers at Toronto and Mangalore. Sets up e- Business practice1996The Infosys Foundation is established1997Opens an office in Toronto, Canada1998Starts enterprise solutions (packaged applications) practice1999Listed on NASDAQOpens offices in Germany, Sweden, Belgium, AustraliaInfosys Business Consulting Services is launched
6 YearDetail2000Re-launches Banks 2000, the universal banking solution2001N. R. Narayana Murthy is rated among Time Magazine/CNN's 25 most influential businessmen in the worldOpens offices in UAE and Argentina, and a Development Center in Japan2002Nandan M. Nilekani takes over as CEO from N.R. Narayana Murthy, who is appointed Chairman and Chief Mentor2003Expands operations in Pune and China2004Revenues reach US$ 1 billion , Infosys Consulting Inc. is launched2005Records the largest international equity offering of US$ 1 billion from India
7 YearDetail2006Infosys celebrates 25 years. Revenues : US$ 2 billion. Emplo grow to 50,000+N. R. Narayana Murthy continues as Chairman and Chief Mentor of Infosys2007Kris Gopalakrishnan, COO, takes over as CEO. Nandan M. Nilekani is appointed Co-Chairman of the Board of Directors2008Infosys crosses revenues of US$ $ 4.18 billion. Employees grow to over 90,000+Reports Q4 revenue of US$ 1,142 million
8 What Infosys are Vision "To be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best-in-class people.“Mission"To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society at large.“Valuesinfosys believe that the softest pillow is a clear conscience. The values that drive us underscore our commitment to:Customer DelightPursuit of Excellence:Fairness:Integrity and Transparency:
9 Members of the Board 1 2 3 4 5 6 7 8 9 10 11 12 S.No Name Designation Mr. N R Narayana MurthyChairman & Chief Mentor2Mr. S GopalakrishnanManaging Director & CEO3Mr. Kundapur Vaman KamathAdditional Director4Mr. K DineshDirector5Mr. T V Mohandas Pai6Mr. Srinath Batni7Mr. S D ShibulalDirector & COO8Mr. David L BoylesIndependent Director9Mr. Claude Smadja10Mr. Deepak M Satwalekar11Mr. Sridar A Iyengar12Prof. Jeffrey S Lehman
10 Infosys Business Lines Insurance Healthcare InsuranceBanking & Capital MarketCommunication Media & EntertainmentEnergy ,Utility, and ServicesManufacturing (MFG)New Market & services (NMS) aus,china,maxicoIndian Business UnitInfosys BPOInfosys ChinaInfosys AustraliaInfosys MexicoConsulting Solutions ( CS )Enterprise Solutions (ES)Product Engineering & Validation Services ( PEVS)Infrastructure Management Services (IMS)S/w Engineering & Technology Labs ( SET Labs)System integration Services (SI)Corporate Sales & Marketing ( CSM )Infosys Leadership InstituteTech ServicesInformation Systems(IS)QualityHuman ResourceEducation & Research ( E & R)Security Audit & Architecture ( SA & A)
11 Infosys other Business or Focus Areas : Arts & CultureEnvironmentHealthcare & EducationDiversityTalent
12 Infosys alliance partners MicrosoftOracleIBMHPMantasSun MicrosystemsSiemensTIBCO Software Inc.
13 Achievement & AwardsInfosys was ranked among the top 50 most respected companies in the world by Reputation Institute’s Global Reputation Pulse 2009.Infosys won Sears Holding Corporation's Partners in Progress award for the second consecutive year.
14 Conti…..also won HDS' Diamond Award for 'Best Virtualization Strategy' and Platinum Award for 'Best Green Strategy for a Data Center'.Infosys was also listed in the Most Admired Knowledge Enterprises (MAKE) 2008 study and Forbes' Asian Fabulous 50for the fourth consecutive year.Infosys were ranked among 'India's Best Companies to Work For ' in a survey by the Great Place to Work® Institute and conferred with the NASSCOM gender inclusivity award.Asset magazine acclaimed their Corporate Governance, acknowledging their corporate policies and practices as amongst the best in the industry
15 Share Holding Pattern as on : 30/06/200931/03/2009Face Value 5.00No. Of Shares% HoldingIndian Promoters 16.49Sub TotalMutual Funds and UTI 4.16 3.58Banks Fin. Inst. AndInsurance 4.13FII's 35.66 34.86 43.95 42.59Private Corporate Bodies 3.94 3.51NRI's/OCB's/Foreign Others 0.86 0.89Others 18.77 19.63 23.58 24.03General Public 15.99 16.89GRAND TOTAL100.00
17 SWOT ANALYSIS STRENGTHS Leadership in sophisticated solutions that enable clients to optimize the efficiency of their businessProven “Global delivery model”Commitment to superior quality and process executionStrong Brand and Long-Standing Client RelationshipsStatus as an employer of choiceAbility to scaleInnovation and leadership
18 WEAKNESSESExcessive dependence on US for revenues – 67 % of revenues from USAExcessive dependence on BFSI sector for revenues – 36 % of revenues from BFSIWeak player in domestic market. Only 1 % of revenues from India – low as compared to peersLow R & D spending as compared to global IT companies – only 1.3 % of total revenuesRising wage bill – 42.9 % to 44.8 % of revenuesLow expertise in high end services like Consultancy and KPO.
19 OPPORTUNITIES Domestic market set to grow by 20%. Expanding into new geographies – Europe, Middle East, etcInfosys is cash rich (Around US $ 1 Billion) - Acquiring companies to increase expertise in Consultancy, KPO and package implementation capabilitiesOpening offices and development centers in cost advantage countries such as those in Latin America and Eastern Europe.
20 THREATSThe economic environment, pricing pressure and rising wages in India and overseasIntense competition in the market for technology services could affect cost advantages.High dependency on a small number of clients, and the loss of any one of the major clients could significantly impact business.Failure to complete fixed-price, fixed-time frame contracts within budget and on timeCurrency fluctuationsTermination of Client contracts can typically be terminated without cause and with little or no notice or penalty.
25 ANALYSIS OF STRATEGIES Corporate level strategies: Core Strategies:Firm believer in “Organic growth” and acquire only those companies in line with strategic goals.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, De-risking” for risk management.
26 Actions Taken by Infosys: 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).
27 GENERIC STRATEGIES: 1. Low cost Global delivery 24/7 Model. 2. Little differentiation in low-end services of value chain; high differentiation in high end services of value chain like software products and package solutions.3. Focus on quality, customer relationship management, timely-delivery.
29 MARKET DEVELOPMENT STRATEGY: MARKET PENETRATION STRATEGY:Current Markets: USA and EuropeCurrent Products: ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail) and software products (financial products).Recommendation: As most large clients in US and Europe are cutting costs, Infosys needs to be more aggressive on cost and quality front.Result of strategy: Unlikely to yield good resultsMARKET DEVELOPMENT STRATEGY:New Market: India, Middle-east and AustraliaCurrent Product: BPO, KPO, consultancy services (in BFSI, manufacturing and retail) and software products (financial products).Recommendation: Since these are fast developing IT market, Infosys needs a paradigm shift in focus from US and EU markets to these markets.Result of strategy: Likely to yield good result.
30 PRODUCT DEVELOPMENT STRATEGY: Current Market: USA and EuropeNew Product: Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences and aviation sector, and KPO services.Recommendation: Concentrate on building expertise in these domains by strategic acquisitions.Result of Strategy: Likely to have good result. (better the company acquired, the better the result).
31 DIVERSIFICATION: New Market: India, Middle-east and Australia New product: Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences and aviation sector, and KPO services.Recommendation: Changing Brand image from low value service provider to high value service provider.Result of Strategy: Difficult to achieve overnight (possible in long term)
32 OTHER STRATEGIES: CONCENTRATION: VERTICAL INTEGRATION: 90% of Infosys revenues from American and European nations.VERTICAL INTEGRATION:Infosys recently made a bid to acquire a European major – Axon consultancy to improve its business in European markets, but finally called off the deal due to high valuation. Otherwise, Infosys has always believed in organic growth.INNOVATION: The Software Engineering and Technology Labs (SETLabs) at Infosys is the center for applied technology research in software engineering and enterprise technology. SETLabs conducted 24 Innovation Workshops with customers from the US and Australia, to identify research collaboration possibilities. Infosys promotes a favorable work environment that encourages innovation and meritocracy.