STRATEGIC ANALYSIS OF INFOSYS

1/9/2012

Prepared by Surya kiran(BLR1107094002) Prashant kumar(BLR1107094013) Ranjith kumar(BLR1107039059) Prashant shelar (BLR1107094012)

Contents
Executive summary ........................................................................................................................ 3 Introduction ...................................................................................................................................... 4 Infosys s external environment analysis- PESTLE analysis ................................................................... 4 Reduction of five forces on Infosys................................................................................................. 6 EFE Matrix ..................................................................................................................................... 7 CPM ............................................................................................................................................... 8 Conclusion ..................................................................................................................................... 8 Bibliography................................................................................................................................... 9

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

Executive summary
 Infosys is the leading IT Indian multinational and third largest IT firm with market share of 8%.  Due to recession in U.S and then after cut down on taxes by US Government, the hiring of fresher s has been cut down by significant percentage.  Economic slowdown due to fluctuation in currency was major reason for cut down of hiring.  On scale of External factor evaluation, its respond to threat and opportunity is good as compare to other companies.  The establishment of brand Infosys has made it stand out in tough times even the market share is dominated by its competitors like TCS and Wipro.

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

Introduction
Infosys Limited, formerly known as Infosys Technologies Limited is a global technology services company. Infosys was founded in 1981 by N. R. Narayana Murthy, and 6 other software engineers. The companys primary business is business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing. Today, Infosys is a worldwide leader in the "next generation" of IT and consulting with revenues of US$ 6.604 billion (LTM Q2-FY12), it has 64 offices and 65 development centres in US, India, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other countries. Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is based on the theory of taking work to the place where the best talent is available, where it can make the most excellent economic intelligence, with the least amount of tolerable threat. Infosys has been ranked amongst the most inventive companies in a Forbes survey, leading technology companies in a statement by The Boston Consulting Group, and top ten green companies in Newsweek's Green Rankings. It also voted India's most accepted company in The Wall Street Journal Asia every year since 2000. The corporate governance practices in Infosys were recognized by The Asset Platinum award and the IR Global Rankings. Infosys was also ranked as the 15th most reliable brand in India by The Brand Trust Report in 2011.

Infosys s external environment analysis- PESTLE analysis

Political 1) Indian political condition is considered stable enough but there is always a fear of hung parliament because of no clear majority for any political party. 2) In the U.S. government not give any tax benefit for those company which outsource IT work to other places. 3) Because of globalization and demand for high speed and accuracy government owned companies and PSUs are now giving their IT projects to Indian IT companies. 4) India is always a target for terrorist attack. IT hubs like Bangalore, New Delhi, Mumbai, Pune, and Hyderabad always be a prime target for terrorist attack. Economical 1) Because of increasingly globalised world recession has also impacted the Indian economy which affected all the industry including IT. 2) Fluctuation of currency. 3) Real state price has growing dramatically which increased the rental expenditure. 4) Due to recession job-cuts have resulted in low attrition rate.

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

Social 1) Number of technical institutes and universities has grown in the country which offers IT education. 2) India has more than 50%t working age population which is largest in the world. 3) Number of English speaking population has grown in India and now English is become the most established language in India for education. Technological 1) Due to IT revolution since 90s all Indian major cities are well connected through optical cables. 2) Technology like Service oriented architecture, web2.0, grid computing, cloud computing, high-definition content etc has changed the way of business for IT industry. 3) India has the second largest telephone network and also the worlds lowest call rate. Legal 1) Indian government is strengthening the IT act 2000 to provide legal environment for companies. This is associated to protection of data in transmission and storage. 2) Companies make bonds under which the employees are required to work, which is not legally required. Environmental 1) For most enterprises, green IT strategy is limited to greening of IT infrastructure, where newer and better technologies are leveraged to reduce energy requirements.

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

Reduction of five forces on Infosys

Reducing bargaining power of suppliers Giving opportunities to new one. Improving supply chain management and training Getting own supplier

Reducing bargaining power of customers Increasing brand loyalty Adding much better values and incentives Giving more opportunities to old companies Getting directly to customers

Reducing threats to new entrants Increasing MES (minimum efficient scale) Creating brand image Patenting on that brand loyal commodity Forming cartels Not giving opportunities to small enterprises

Infosys

Reducing the competitive rivalry Moving away from price competition i.e. reducing cost, positioning. Differentiation in products Focusing on different segments to improve more growth than other companies. Communication with competito

Reducing threats from substitutions Legal action Price is reduced and quality increased Entering into substitution market and influencing them and Showing differences between them

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

Benefits from porters model 1) Statical analysis  It is beneficial to internal environment that gives the likeness of industry and also profitability.  It gives whether we have chosen right industry or not.  It shows impact on competitors and how it is impacted by competitors. 2) Dynamic analysis  It majorly influenced by dynamics like political, economical and social causes.  It has an impact to change its structure also. 3) Analysis of options 1) With the obtained knowledge we could develop better options than the competitors. Thus this model gives us a systematic structured and good market product in market segments, industries, companies and regions.

EFE Matrix
Key external factors Opportunities Establishing of new IT hubs in India Increase of IT education in India Emergence of new small domestic companies Increase of cloud & grid computing technology at cheaper rate Threats Impact of recession in U.S. Cut down on taxes on outsourcing by U.S. Government Emergence of Chinese companies in IT sectors Slow down of Indian economy Target destination by terrorist in India Satyam fiasco on image of IT sector Total Weight 0.15 0.1 0.1 0.15 Rating 4 4 3 4 Weighted score 0.6 0.4 0.3 0.6

1 2 3 4

5 6 7 8 9 10

0.08 0.1 0.12 0.5 0.1 0.05 1

2 1 3 2 1 2

0.16 0.1 0.36 0.1 0.1 0.10 2.82

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

CPM
CSF s Market share Global experience Organization structure Product quality Price competencies Customer services Financial position total Weight 0.15 0.2 0.1 0.15 0.1 0.15 0.15 1.0 Infosys rating Weighted score 4 0.6 4 0.8 3 0.3 4 0.6 2 0.2 3 0.45 4 0.6 3.55 Weight 0.15 0.15 0.1 0.15 0.15 0.1 0.2 1.0 Wipro rating Weighted score 4 0.6 4 0.6 3 0.3 4 0.6 2 0.3 2 0.2 4 0.8 3.40

Conclusion
Infosys, as per EFE (External Factor evaluation) scores 2.82 which rate him as good for responding to threats and opportunities in present scenario. Even though Wipro has more market share than Infosys its still manages to be world leader in next generation of IT and consulting.

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar

Bibliography
1. http://www.infosys.com/newsroom/Pages/aboutus.aspx 2. IT/ITeS Market and Opportunities IBEF (India brand equity Foundation). 3. Indian IT/ITes Industry: Impacting Economy and Society: 2007-08 A NASSCOM and DELIOTTE Study. 4. www.finance.yahoo.com

Surya kiran

Prashant shelar

Ranjith kumar

Prashant kumar