Amity School of Business, Noida, Uttar Pradesh

AMITY SCHOOL OF BUSINESS, NOIDA, UTTAR PRADESH
PSDA-1
BUSINESS STRATEGY (STRA303)
SUBMITTED TO:-
MS. MONA CHAUDHARY
SUBMITTED BY:-
ABHISHU CHANDRA (G-43)
Introduction
India is the world's largest sourcing destination for the information technology (IT)
industry, accounting for approximately 67 per cent of the US$ 124-130 billion
market. The industry employs about 10 million workforce. More importantly, the
industry has led the economic transformation of the country and altered the
perception of India in the global economy. India's cost competitiveness in providing
IT services, which is approximately 3-4 times cheaper than the US, continues to be
the mainstay of its unique selling proposition (USP) in the global sourcing market.
However, India is also gaining prominence in terms of intellectual capital with
several global IT firms setting up their innovation centres in India. The IT industry
has also created significant demand in the Indian education sector, especially for
engineering and computer science. The Indian IT and ITES industry is divided into
four major segments – IT services, business process management (BPM), software
products and engineering services, and hardware. The IT-BPM sector in India grew
at a Compound Annual Growth rate (CAGR) of 15 per cent over 2010-15, which is 3-4
times higher than the global IT-BPM spend, and is estimated to expand at a CAGR of
9.5 per cent to US$ 300 billion by 2020.
Strategies implemented
1. Business Strategy:
 TCS calls its Business Units as Industry Service Practice.
 TCS has 42.8% of exposure to Banking Financial Services & Insurance
sector. No
1. Global strategy:
TCS global strategy structure tend towards its global operations to implement a
Customer centric and integrated approach which will help them to control external
factors arising from the Economic Meltdown in western countries. TCS's global
operation units is divided into five main divisions includes the established markets
like North America K & Western Europe as well as the new markets includes mainly
Latin America, Middle east, India and Eastern Europe. TCS was the first one to set
the global delivery centre in China which distinguished TCS from other corporate
companies (Mitra, 2005).
This global strategy of TCS will Increase Company's market growth rate at the rate of
40% every year. TCS is establishing global delivery centres outside India which
demonstrate TCS as a Global company. In recent years TCS was frequently changing
its approach towards global market.
2. Strategic Alliances strategy:

Tata consultancy services have been holding a strategic relationship with various
International technology (IT) vendors such as Intel, Hewlett-Packard (HP), IBM this
distinguished as service provider, customer, supplier, and alliance partner. (Mitra,
2005). The relationships with the international technology vendors have made TCS
to maintain a holistic approach to create a joint venture opportunities with these
international vendors on joint research by which each other's strengths will provide a
strategic advantage by following ways.
It creates joint engagements with (IT) vendors.
It provide new or improved solutions on problems
It helps to adopt a Joint go-to-market strategy for the specific (IT) solutions.
3. Acquisition strategy:
TCS divides its acquisition strategy into two components. Organic means and
inorganic means (Mitra, 2005). The Inorganic way of acquisitions of companies this
has business sense to TCS as part of its strategy to look at expansion options has set
up an internal team which will focus only on acquisition strategies
4. Co- innovation network (coin) strategies:
TCS have implemented a Co-innovation strategy in order to face the competition in

today's globalization world. Where competition among the IT companies is
increasing day by day. TCS has developed & implement an innovative technology
which will result in collaborating a "Globally Distributed Network (GDN)" (Mitra,
2005).
SWOT Analysis:
SWOT analysis is a tool that can help in identifying the external and internal factors
that affect the organizations future performance (Pickton and Wright, 1998). TCS has
many strengths and weaknesses and the same were explained below
Strengths:
 World’s powerful brand in IT services rated by Brand Finance (TCS, 2017h)

 Strong ethics which helps the firm in minimizing the future complexity and
making the organization stronger. Its code of conduct shows the commitment
of the service delivery to its customers (TCS, 2015).
 Clients from diversified markets by which the firm benefited in diluting its
risk to greater extent (Andaleeb, 2016)
 Strong portfolio of various services and products which attracts more
consumers towards the brand
 Strong financial performance. The firm has greater profits every year with
good growth rate (TCS, 2010-17).
 Other strengths include cost advantage, strong management team and high
level of customer relationship management (Lee et al., 2014)
Weaknesses:
 Majorly dependent on service sector of its business and less focused on

Product development (TCS, 2017e)
 Majorly dependent on US and European markets even though it has
operations in emerging economy countries (TCS, 2017e)
 Much dependent on Banking and Financial service sector (TCS, 2017e)
 High number of experienced employees which increases the employee cost of
the company (TCS, 2017e)
Opportunities:
 Strong digital transformation technology is the major opportunity for TCS

through which it can increase the revenue (IBEF, 2017)
 Cloud based solutions is another opportunity as this can help in protecting its
digital services to great extent (IBEF, 2017)
 Expanding the firm operations to more emerging economies also gives the
opportunity for TCS to increase its revenue.
Threat:
 Intense competition from Domestic and International firms is a major threat

as it would become difficult for the firm to sustain the market for longer
duration (IBEF, 2017)
 Changing IT laws in India and other countries are creating problems for the
organization. (Rapoza, 2017)
 Economic slowdown globally is a great threat to TCS
 Rising Indian Rupee Value against US Dollar is impacting TCS revenues
(Leahy)
 BREXIT to impact the future and current projects for TCS in EU Markets
(Nadhe, 2016)
 Penalty from Law Suits will impact the reputation and financial performance
of the firm (Kumar, 2017)
External Analysis of TCS:
External Environmental analysis is another important aspect of the organization as it

helps the firms to ensure that they have fully addressed its current and future
operating environments. This also helps the firms in formulating new strategies for
gaining success in the market. This external analysis is often referred as PESTEL
Analysis(Political, Economic, Social, Technological, Environmental and Legal
influences) (Clegg et al., 2017)
Political Influences:
 Indian political structure is quite stable. Thus, TCS has high chance to grow
well in Indian market. Government supports Information Technology entities
by making new laws so that these firms can grow well and can contribute in
the economic development of the nation (Agarwal and Al Farooque, 2016)
 TCS is also dependent on overseas markets majorly on US and European
Markets. Political tensions such as BREXIT, Change in H1B US visa Processes
(Protectionism) have greater impact on TCS projects (Nadhe, 2016)
Economic Influences:
 TCS has large workforce (more than 387000 employees) and the average
compensation and benefits for the employees are higher which results in
increase in the cost of operations (Lee et al., 2014).
 Demonetization in Inida which happened in 2016 has an impact over TCS
Indian market(ICT, 2017)
 TCS increased local hiring in US and other countries[6] which in turn
increased the cost of operations (Rapoza, 2017)
 TCS is availing tax benefits in India and other countries with the Special
Economic Zone (SEZ) Scheme (IBEF, 2017)
 Increase in investment in IT sector is expected with the gain in the technology
for Digital transformation of the Public Services, Healthcare, Education and
other sectors which is an benefit for TCS (TCS, 2016)
Social Influences:
 Mode of education in India is majorly English which is helping TCS to recruit

talented Graduates as they can easily communicate with Global Clients (IBEF,
2017)
 Risk of Labour shortage in India is very minimal(IBEF, 2017)
 TCS is involved in providing IT education to school and University level
students as part of the Corporate Social Responsibility Activities (TCS, 2017d)
Technological Influences:
 Cloud computing, Mobility, Social media, Robotics and Big data (Digital 5
forces) to be the growth drivers for TCS (TCS, 2017b)
 TCS need to focus on Product based technologies and solutions rather than
limiting its operations to service sector.
Environmental Influences:
 TCS has deployed smart metering in its Indian offices which resulted in the
energy savings of 12.5 Million KWH (Reported FY16) (TCS, 2017c)
 Green Infrastructure, IT-enabled operational efficiencies and Green IT supports
TCS energy management process. It has reduced Energy consumption by over
49% with these initiatives (TCS, 2017c)
Legal Influences:
 TCS has faced legal issues which will impact its reputation and brand image
(Kumar, 2017)
 IT Laws in many countries are changing for overseas workers which are going
to have an impact on TCS operating model. (Rapoza, 2017)

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AMITY SCHOOL OF BUSINESS, NOIDA, UTTAR PRADESH

2. Strategic Alliances strategy:

It creates joint engagements with (IT) vendors.

It provide new or improved solutions on problems

4. Co- innovation network (coin) strategies:

TCS have implemented a Co-innovation strategy in order to face the competition in

 World’s powerful brand in IT services rated by Brand Finance (TCS, 2017h)

 Majorly dependent on service sector of its business and less focused on

 Strong digital transformation technology is the major opportunity for TCS

 Intense competition from Domestic and International firms is a major threat

External Analysis of TCS:

External Environmental analysis is another important aspect of the organization as it

 Mode of education in India is majorly English which is helping TCS to recruit

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