PROJECT REPORT

OF
STRATEGIC MANAGEMENT

TOPIC: SWOT ANALYSIS OF INFOSYS TECHNOLOGIES

SUBMITTED TO: SUBMITTED BY:

CHIPPY.R.S SILPA.P.S
ASST.PROF. ROLL NO: 25
DEPT. OF MBA T3, MBA

SUBMITTED ON:
2/05/2019

CONTENTS
SL NO: TOPICS PAGE NO:

1 INTRODUCTION

2 ABOUT INFOSYS

3 SWOT ANALYSIS

4 CONCLUSION

5 REFERENCE
 INTRODUCTION
SWOT analysis (or SWOT matrix) is a strategic planning
technique used to help a person or organization identify strengths,
weaknesses, opportunities, and threats related to business
competition or project planning. It is intended to specify the
objectives of the business venture or project and identify the
internal and external factors that are favorable and unfavorable to
achieving those objectives. Users of a SWOT analysis often ask
and answer questions to generate meaningful information for each
category to make the tool useful and identify their competitive
advantage. SWOT has been described as the tried-and-true tool of
strategic analysis.
Strengths and weakness are frequently internally-related, while
opportunities and threats commonly focus on the external
environment. The name is an acronym for the four parameters the
technique examines:
 Strengths: characteristics of the business or project that give
it an advantage over others.
 Weaknesses: characteristics of the business that place the
business or project at a disadvantage relative to others.
 Opportunities: elements in the environment that the business
or project could exploit to its advantage
 Threats: elements in the environment that could cause
trouble for the business or project.
 ABOUT INFOSYS TECHNOLOGIES LTD.

Infosys Technologies Ltd. is a software development company

with headquarters in Electronics City, Bangalore, India, an area
known as 'India's Silicon Valley' for its concentration of high-tech
multinational and Indian companies. Cofounded by Chairman
and CEO N.R.Narayana Murthy, Infosys Technologies has
accomplished a number of firsts for an Indian company, including
becoming the first to be listed on an American stock exchange
and the first to offer an employee stock option plan (ESOP).
About 500 employees have become millionaires as a result of the
company's ESOP. In 2000 the firm's international client base
included 200 American firms, for which Infosys Technologies
provided software for enterprise resource planning (ERP), Y2K
compliance, electronic commerce, and other applications.

Infosys Limited is an Indian Information Technology company

that provides global business consulting and information
technology services. Infosys helps clients in 45 countries to create
and execute different strategies for their digital transformation.
Infosys helps businesses to renew & improve existing conditions
so that their business can achieve higher efficiencies and stay
relevant according to current times. Infosys has more than
200,000 employees and through their hard work & dedication,
Infosys has grown to become a US $10.9 billion (revenues FY18)
company with a market capitalization of US $39 billion.
 SWOT ANALYSIS OF INFOSYS

STRENGTHS
 This company is based in India and its competitive
advantage is increased.

 The Indian economy has low labor cost although its

economic indicators are quite weak as increasing rate of
inflation.

 The workforce is high skilled in Information Technology.

 Strong Brand and Long-Standing Client Relationships.

 Commitment to superior quality and process execution –

Infosys has quality standards such as CMM Level 5i to
differentiate from other competitors.

 Infosys is in a strong financial position as its business turned

over more than $4 billion in 2008. This strong financial
position shows that its capital is expanding, and it provides
the base to leverage the potential investors.
 The company has 44 global development centers in which
most of them are located in India. This company has offices
in many developed and developing nations. This means that
Infosys is becoming a global brand and it has capability to
support global operations, which it carries out for its
multinational clients.

 Cost advantage due to a presence in India: Majority of

Infosys’ 119 development centers are present in India, which
gives it high-quality technical talent at a great cost advantage
considering the fact that wage costs have been significantly
lower in India than the developed parts of the world.

 Provides strong end to end business solutions: The company

offers a wide range of consultancy services and provides
comprehensive end to end business services in IT services,
software-based services, business consulting and business
process management. This allows Infosys to attract
companies from various industries.

 Strategic Association: Infosys has partnered with major

technology and business players in order to strengthen its
services and business solutions. The company has earlier
partnered with HP, IBM, Microsoft and Amazon etc. The
strong partnership network allows Infosys to deliver
innovative and collaborative solutions.
WEAKNESSES

 Infosys struggles in the US markets on different occasions,

and has particular problems in securing United States
Federal Government contracts in North America. As these
contracts are very profitable and they can be continued for
long periods of time, Infosys is losing its strength in lucrative
business.

 This company is considered the big IT Company if it is

compared to its Indian competitors, but Infosys is much
smaller than its global competitors.

 Dependent on Limited markets: Infosys has concentrated

operations majorly based out of the America and Europe.
Together, North America and Europe constitute over 80% of
the company’s revenue. This makes the company susceptible
to instability and uneven growth.

 Not covering growing markets: The emerging markets have

been growing rapidly, and most of the credit goes too fast
growing technology. Infosys does not have services for the
majority of the emerging nations and thus misses out on a
potential of growth.
  High Attrition rate: Infosys is one of the tech companies in
India which has been a victim of the high attrition rate. Many
employees leave for better career opportunities and higher
education. High attrition rates affect company’s image.

 Weak player in domestic market. Only 1 % of revenues from

India – low as compared to peers.

 Decreasing competitive advantage – rising salary expenses

is taking away the cost advantage enjoyed by Indian
companies (including Infosys).

OPPORTUNITIES

 Poised to benefit from the acquisition of Lodestone Holding.

 They should give positive outlook for enterprise mobility

market.

 The company can get the benefit of big data about IT

technology.
 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.

 Opening offices and development centers in cost advantage

countries such as those in Latin America and Eastern
Europe.

 The strategic alliance between Infosys and Schlumberger

gives the IT company access to lucrative business in the gas
and oil industries.

 Invest in young technology companies: Infosys has been

identifying potential and investing heavily in early stage
technology companies. For instance, investments in Trifacta,
a data wrangling Software Company and Waterline Data
Science in the year 2016.Infosys should continue making
investments in such companies as it provides the competitive
technological advantage to Infosys.
 Growth in spend on Digital Transformational Technologies:
In the period of the year 2014-2019, global spending on
Digital Transformational Technologies are expected to grow
at a CAGR of about 17 percent. Infosys has increased its
focus on providing digital transformation services and thus
increased global spending can be beneficial for it.

 Increasing demand for cloud-based solutions: There is a

positive outlook for cloud-based solutions as the
fundamental nature of computing has been changed by cloud
computing. According to industry estimates, global
spending on cloud services is expected to grow at a CAGR
of over 18 percent from the period 2015 to 2019. Infosys
having a significant presence in cloud computing market is
set to be benefitted by the increasing demand.

 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
centers 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

 Intense 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.

 Termination of Client contracts can typically be terminated

without cause and with little or no notice or penalty.

 Global economic slowdown may continue for several years

– hence low IT spending globally.

 US Govt. against outsourcing.

 Shrinking margins due to rising wage inflation.

 Rupee-dollar movement affects revenue and hence margins.

 Increased competition from foreign firms like Accenture,

IBM etc.
 Increased competition from low-wage countries like China,
Indonesia etc.

 Employee attrition may increase personnel costs of the

company.

 Another great threat is instability of economic environment.

The company can face pressure for conducting business
because of pricing and low employee utilization.

 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 realized 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.
 Intense competition: The IT services industry is a highly
competitive industry. Infosys competes with large
technology and consultancy firms like Accenture,
Capgemini and TCS etc. The company also competes with
software consultancy giants like Oracle and SAP. Intense
competition leads to pricing pressures and investment in
innovative technology to gain competitive advantage.

 Changes in US immigration laws: Immigration laws are

subject to political pressure and thus can be changed with a
change in political power in the US. US immigration laws
can get stricter which will affect the business of Infosys and
other countries which are heavily dependent on the US
market.

 Rising wage inflation in India: For companies like Infosys,

lower wage cost is a great competitive advantage, but there
is a pressure of rising wages in India as well. Infosys has also
had to abide by wage inflation to retain its technical staff.
Such measures affect the operating margins for the
company.
 CONCLUSION

Infosys is the leading IT Company and it is providing IT

technology to its clients, who want to excel in their IT
departments and they want to develop their business. The
company adopted the latest technology to make their business
activities innovative and unique. The huge number of employees,
who are working in this company, they are well trained and have
completed their professional education and trainings and they are
contributing in the development and progress of the company.
They know the future demands in IT industry and they are capable
of meeting the ever increasing demands of the clients. Due to its
diversified working in the IT market, it has developed its good
reputation and people can trust their satisfactory working in the
IT field. With the change in technology, the use of new tools and
equipments in this business, can bring huge number of changes
and improvise this business.
 REFERENCE

.
 M. E. Porter, Competitive Strategy (New York: Free Press,
1980)
 D. Chandler, Strategy and Structure (Cambridge, Mass.:
MIT Press, 1962)
 O. E. Williamson, Markets and Hierarchies (New York: Free
Press, 1975);
 www.marketing91.com/swot-analysis-infosys