Done by

Kiran S (2113050)
Srinivasa Kiruthik K S (2113100)
Post Graduate Diploma in Management
2021-2023.

THIAGARAJAR SCHOOL OF MANAGEMENT, MADURAI

MAY 2022
ABOUT THE COMPANY
HCL Technologies (Hindustan Computers Limited) is an
Indian multinational information technology (IT) services
and consulting company headquartered in Noida. It is a subsidiary of HCL
Enterprise. Originally a research and development division of HCL, it emerged
as an independent company in 1991 when HCL entered into the software services
business. The company has offices in 50 countries and over 187,000 employees.
HCL Technologies is on the Forbes Global 2000 list. It is among the top 20
largest publicly traded companies in India with a market capitalisation of
$50 billion as of September 2021. As of July 2020, the company, along with its
subsidiaries, had a consolidated annual revenue of ₹71,265 crore (US$10
billion).
Formerly known as Hindustan Computers Limited
Industry Information Technology, Outsourcing, Consulting
Founded 11 August 1976
Headquarters Noida, Uttar Pradesh, India
Area served Worldwide
Revenue $11 billion
Founder Shiv Nadar
No. of employees 208,877
Parent HCL Group
IT INDUSTRY ANALYSIS
The Indian IT Industry is one of the largest sectors in the country which
contributes significantly to the GDP of the country. It is indeed one of the largest
employers in the private sector. The increasing revenue of the IT industry year on
year, conveys that the industry is growing and has a huge amount of potential.
According to National Association of Software and Service Companies
(Nasscom), US$ 194 billion is the estimated IT Industry’s revenue in FY21. The
IT industry has currently employed around 4.5 million people. The top three
companies of the IT industry, TCS, Wipro and Infosys employ 1.05 lakh people
in the country. India ‘s IT and business services market is projected to reach US$
19.93 billion by 2025. According to Gartner estimates, IT spending in India was
forecasted to be US$ 81.89 billion in 2021 and further increase to US$ 101.8
billion in 2022, a 24.31% YoY increase.
Indian IT firms have delivery centres all around the world. The amount of
foreign investment in India through the IT sector is estimated to be $200 billion
by 2025. Given below, is the trend of revenue of the Indian IT Industry.

Revenue of Indian IT industry

250

200
Revenue (in billions)

150

100

50

0
2015 2016 2017 2018 2019 2020 2021 2022
Year

The top ten companies of the Indian IT industry are,

1) TCS
2) Infosys
3) Wipro
4) HCL Technologies
5) Tech Mahindra
6) L&T Infotech
7) Mindtree
8) Mphasis
9) Hexaware Technologies
10) Redington India
The data regarding the market value of these companies has been sourced from
MoneyControl. The below chart displays the market share of Indian IT companies
by market value,

Market Share of Indian IT companies by Market Value

0%
3% 2% 2% 0%
4%

11%
44%

11%

22%

TCS Infosys Wipro

HCL Technologies Tech Mahindra L&T Infotech
Mindtree Mphasis Hexaware Technologies
Redington India

In the Union Budget 2022-23, Rs. 88,567.57 crore (US$ 11.58 billion) has
been allocated to the IT and Telecom sector. The government introduced the STP
Scheme, which is a 100% export-oriented scheme for the development and export
of computer software, including export of professional services.

Threat of Suppliers

The bargaining power for suppliers is very low and since high-standardization
exists, there is little scope of suppliers. The suppliers consist of IT Infrastructure
providers (Servers, computers etc.), Recruitment firms, Office Space Suppliers
etc.
Threat of Buyers

The power of buyers is very high in the IT industry, because products offered by
a company is replicable by another company, which causes the buyer to be a
price-setter. In addition to his, there are Indian and International IT companies
who have broken the barriers in case of delivery, hence making the buyer
accessible to companies across the world. So, in case of IT Industry, buyer is the
king.

Threat of New Entrants

The threat of new entrants is very little in the IT industry. The barriers to
entry for new firms into the IT industry is given by,

1) Products introduced in the IT industry are easily replicable. This hinders new
companies coming up with innovative ideas, which exist only for the short term.’

2) Intense competition from established firms in the industry.

3) Pressure on upcoming companies to build the software within the estimated

budget.

4) Product bundling has become another issue, with existing companies offering
additional offerings than competitors. This hinders new companies which come
up with focused products.

Availability of Substitutes

The market for conventional services is highly commoditised with

potential for differentiation concentrated around niche expertise in new
technologies and trends (SMAC + Internet of Things) and around non-
conventional engagements (revenue/profit share, risk-reward models). It is
unlikely that the market for conventional services will vanish overnight but the
future promises to hold a highly modified view. Application development is fast
morphing into app-development and a large part of revenues continue to be drawn
from conventional services as the need to adapt and incorporate new technologies
and engagement models looms over an IT industry that needs to reform and re-
invent itself rapidly. So, the availability of substitutes is very less in the IT
industry.

Threat of Existing Competition

The IT Industry landscape is characterised by intense completion for

conventional IT services: Application Development & Maintenance, IT
Infrastructure Management Services, Network Management Services, Data-
centre Services etc. leading therefore to commoditization. There are several firms
in the market offering similar services and it is difficult to differentiate based on
these service offerings. The existing competition comes from both domestic
players (Infosys, TCS, Wipro, HCL technologies, Tech Mahindra, Mindtree and
so forth) and international ones (IBM, Accenture, Capgemini, Cognizant and so
forth). So, there is intense competition among existing players in the industry.

Power of Threat of
suppliers new
entrants

Power of
Buyers

Existing
Availability
Competition
of
Substitutes

Porter’s Five Forces in the Indian IT industry

INTERNAL ANALYSIS OF HCL
RESOURCES:
Resources are those which are used as inputs to that act as a source for
capabilities for the firm. The resources for HCL are given by,
Human Resources: This includes all stakeholders who are affected by the firm’s
performance and affect the firm’s decisions. Capital market stakeholders who
contribute funds in the form of shares to HCL. Product market stakeholders are
important clients for the company. Organizational stakeholders are employees
who contribute to the success of the firm, thereby satisfying customers and
shareholders.
Financial Resources: Equity raised through shareholders. Funds in the form of
short-term debt or long-term debt act as financial resources for HCL. The assets
of the firm also contribute to financial resources.
Technology: Technology is one of the primary resources for the firm. This
enables the company to come up with differentiated products in the fast-moving
market.
Physical Resources: Physical resources include corporate offices and necessary
infrastructure. As this is a software company, physical resources play a minimal
role in delivery of products.
Skill: Skill is an intangible source for the firm. This resource is vital, because to
sustain in a market with equally balanced competitors, HCL depends on skill as
a resource.
CAPABILITIES:
On-Time Delivery: Employees of the firm contribute in such a way that
products are delivered on time. The firm has necessary funds to use it to adopt
new technologies for on-time delivery.
Development of Products: Using technology and funds available, the firm
produces products for clients as per their needs.
Frequent interaction: The firm uses technology to have access to employees,
shareholders and customers, thereby, giving them the ability to serve individual
needs of stakeholders.
CORE-COMPENTENCIES:
Out-of-Box Solutions: The firm’s capabilities help HCL to deliver innovative
products, that have huge value to customers.
Customized products: The firm’s ability to use technology as a resource, helps it
to cater to the needs of individual customers, thereby making it survive in a
niche market.
Constant Innovation: The company using all its resources and capabilities,
constantly urges for innovation.
SWOT ANALYSIS

HCL TECHNOLOGIES SWOT ANALYSIS

1. Association with Major 1. Total asset turnover is one 1. New Outsourcing deals 1. Adverse impact of foreign
Brands of the weakness exchange movement
2.Strong presence in defense
2. Consistent revenue growth 2. Tough competition from space and potential to 2. Emergence of potentially
existing PC and laptop brands benefit from offset provision disruptive
3. Acquisition of Axon means limited market in Indian defense imports.6. technologies/practices like
enables company to offer full share6. Over 80,000 Over 80,000 employees are cloud computing6. Over
SAP services employees are working at working at HCL 80,000 employees are
HCL working at HCL
4.Global Coverage in
countries like U.S, Europe,
Japan etc.

5. Offerings like tablets,

laptops and PCs expand the
reach

6. Over 80,000 employees

are working at HCL

7. Offers services like ERS,

ETS, BPO and EAS
The strengths of the firm, are constant innovation, having a global
presence, updating to latest devices and acquisition strategies to survive in the
market, providing differentiated products. The weaknesses of the company are its
limited market share among dominant players and its low asset turnover ratio,
indicating that the company is less capable to convert its assets into sales. The
opportunities for HCL include, use of IT services in the defense sector. The
threats of the company are, its fast cycle market and huge number of players in
the market.
TOWS MATRIX

HCL TECHNOLOGIES TOWS MATRIX

STRENGTHS WEAKNESSES
OPPORTUNITES

Expanding into Asia-Pacific Increasing more facilities

region and stabilizing outside the country of origin,
emerging markets by opening and in other parts of the
new stores and developing world, especially emerging
new products markets such as China.

Improving the ambience of Increase budget for

service, focusing on marketing communications
THREATS

augmented service levels, and strategic promotions to

when providing and adapting pursue a modern expansion
to local culture. strategy.

MARKETING STRATEGY ANALYSIS OF HCL

Over the last decade the traditional role of marketing has diminished with the
rise of artificial intelligence driven algorithms that provides marketers an easy
to measure tool based on impression, clicks, and other behavioral aspects. But
one thing that has been lost in this easy to measure culture is – The power of
marketing functions to create new markets and customer segments. At EMBA
Pro, we believe that power of creating new markets still holds great potential for
marketers in both digital world and traditional media.

The five stages of Marketing Strategy Process of Hcl Nayar are -

Step 1 - Marketing Research & Analysis

Step 2 - Segmentation, Targeting & Positioning Decisions
Step 3 - Marketing Plan
Step 4 - Designing a Marketing Mix using 4Ps - Product, Price, Place &
Promotion
Step 5 - Sustaining Value through Post Purchase Services
Step 1 - Marketing Research and Analysis

The first stage of the marketing process at Hcl Nayar is to do research and
analysis to identify unmet and even unknown customer needs. A good point to
start for the research and development is to conduct a 5C Marketing Analysis .
The 5C Marketing Analysis framework comprises –

Customers Needs– What are the needs that Hcl Nayar seek to satisfy. Who are
the present customers and who are the potential customers for the new product
or service.

Company – What are the resources and special skills that Hcl Nayar needs to
possess to create products that can fulfill the needs of the prospective
customers. Check out the detailed SWOT Analysis for Hcl Nayar on the
following page.

Competitors – Who are the competitors in the target market and what value
proposition they are offering in the market place. Do they possess enough
financial and knowledge resources to develop new products to compete with
Hcl Nayar.

Collaborators – What sort of supply chain and value chain partners Hcl Nayar
needs to develop and deliver new product to final consumer. What are the
respective bargaining powers of value chain partners.

Context – What are the macro and micro environment factors that impacts the
business environment in which Hcl Nayar operates in. You can check out
PESTEL analysis of Hcl Nayar in greater detail on the following page.

Step 2 - Selecting Target Customer Segment

The second step of Marketing Process after completing the 5C analysis is –

Selecting the Target Market. It requires three steps –

Segmentation
Market segmentation is the process through which marketing managers at Hcl
Nayar can divide the large market into smaller segments based on distinct
needs, characteristics, or consumer behavior. Hcl Nayar can do segmentation
based on following criteria – geographic, demographic, usage, user status,
income, lifestyle, value proposition priorties, benefits sought, loyalty status,
gender, social class, self-perception, psychographic factors, and other attitudes.

One of the most widely used multivariate segmentation system is – PRIZM,

developed by Claritas. It is widely used by various marketing and advertising
agencies. It comprises 68 customer segments based on the US Household
Purchasing Preferences data.

Targeting
Once the overall market is divided into various segments then Hcl Nayar needs
to choose a target segment or few target segments. The key is not to be
everything to everybody as the products can only deliver specific value
proposition.

Conducting a Segment Attractiveness Analysis

• First step in the targeting process is to conduct a Segment Attractiveness

Analysis. Under the Segment Attractiveness Analysis all the segments are
evaluated based on the following criteria –
• Mode of competition and business models – Sometimes the way competitors
compete shape the whole landscape of an industry. For example email can
easily be - paid product- , but organizations chose to make it free products to
increase customer base and lure in advertisers. So if Hcl Nayar is trying to
enter a segment where revenue from other division is financing the core
service then it has to build a requisite business model where revenue is driven
by an adjacent or related product and service.
• Customer behavior and loyalty analysis – How customers are behaving in each
segments and are there opportunities of over lapping. Loyalty behavior
analysis is also a critical factor in analyzing the conversion rate if the Hcl
Nayar core strategy is based on attracting existing players’ customers.
• Maturity of the market – For example within the car industry the SUV
category is more mature than Electric Vehicle market, so the margins can be
very limited in the SUV category but the demand forecasting is easy. On the
other hand EV division can have higher margins because of lower competition
but the demand forecasting can be a difficult process.
• Profitability in various segments – Some segments often have higher margins
compare to another as explained in the automobile industry example above.

Differentiation & Positioning

Differentiation process involves how Hcl Nayar is differentiating its products
and services in the market place compare to its competitors. Positioning is the
position of the brand or Hcl Nayar products in minds of target customers –
based on distinctive features, qualities and functions.
The differentiation and positioning task at Hcl Nayar require marketing
managers to do -

• Identify competitive advantage or unique value proposition on which

position the brand in the mind of the consumers.
• Choose competitive advantages that are most compatible with Hcl Nayar
marketing strategy. Marketing managers at Hcl Nayar can make perceptual
maps to better understand competitive positioning of various brands in the
market place.
• Finally Positioning the brand as a deliverer of superior value to the target
segment and effectively communicating that position to consumers using
marketing mix and promotion mix.

Step 3- Making a Marketing Plan

• Objectives of the Marketing Plan : There are various objectives for which
Hcl Nayar marketing managers can make marketing plan – New product
launch, repositioning of existing brand, targeting new customer segment,
entering international markets etc.
• 2. Marketing and financial goals and objectives: The second step is to
correctly assess how much financial resources will be required to execute the
marketing plan. It involves resources spent from product development to
building a communication strategy mix.
• 3. Marketing mix: Building a marketing mix based on the marketing plan
objectives and limitations imposed upon it by the financial resources.
• 4. Marketing budget: Budget each prospective activity that will be under
taken under marketing mix strategy.
• 5. Monitoring and evaluating performance: Carefully monitor each
marketing mix activity and analyze the target performance with the actual
performance. Which media vehicles are performing better compare to others
etc. This will help in making changes and adaptation as we go along.

Step 4 – Four P's of Marketing Mix & Go-To Market Strategy – Capturing
Value

Guided by marketing strategy, the company designs an integrated marketing

mix made up of factors under its control—product, price, place, and promotion
(the four Ps of Marketing Mix). To design the best marketing strategy and mix,
Hcl Nayar should closely adopt the Four Ps of Marketing mix in accordance
with trends and forces in Hcl Nayar ’s marketing environment.

• Product - Understand the deep-seated drivers of perceptions and behavior of

consumers and develop a product that appeal to those drivers.
• Place – Evaluate the buying behavior and distribution channel costs to make
a channel decision.
• Promotion - Engage with customers through use cases and benefits instead of
functionalities and features. Communication should be focused on experience
rather than product features.
• Price – Price is often determined by marketing strategy, cost structure of the
company, competitive positioning of firm, brand positioning, and various
other factors. If the business model is built on conversion of existing
customers then Hcl Nayar needs to arrive at a price through research at which
the present customers are willing to switch to a new brand.

Step 5 - Post Purchase Services – Sustaining Value

Even though the number varies, the efforts taken to gain new customers are far
more and costly than those to keep the present customers loyal. Post purchase
services are critical to foster loyalty among the customers. Various ways in
which Hcl Nayar can improve the post purchase experience of the existing
customers –

• Building communities where customers can share experience and help other
customers.
• Taking regular feedback from customers and asking them how certain
features can be enhanced.
• Providing regular maintenance services and spare parts, if the customer
needs them.
• Providing product care tips.
• Providing installation and other related services.
• Post purchase services are critical not only to foster loyalty among the
customers but also to get continuous feedback and improve the products.

PESTEL ANALYSIS OF HCL

Political Factors that Impact HCL Technologies

• Unrest within the Country & Chances of Civil Unrest – We don’t think that
Hcl business operations are facing any dangers from any kind of civil unrest
or internal militant operations in the country.
• International Trade & Other Treaties – The country has a good record of
adhering to international treaties it has done with various global partners. The
government of each party has adhered to the treaties done by previous
governments, so there is a consistency in both rule of law and regulations.
• Democracy & Other Democratic Institutions – According to Linda A. Hill,
Tarun Khanna, Emily A. Stecker the democratic institutions are needed to be
 strengthened further so that business such as Hcl can thrive in an open,
transparent and stable political environment. Strengthening of democratic
institution will foster greater transparency and reduce the level of corruption
in the country.
• Government Regulations and Deregulations – The government is adhering to
all the rules and regulations under World Trade Organization norms. There is
consistency in both policy making and implementations of those policies.
• Size of Government Budgets – both Local Governments and National
Government – The government at both national level and local levels are
running deficit budgets which is boosting growth in the short term but may
lead to increase in inflation over medium term. The bond rating of national
government is investment grade.
• Regulatory Practices - The regulatory practices are streamlined with global
norms which have helped the country to improve its “ease of doing business”
ranking.
• Likelihood of Entering into an Armed Conflict – From the information in the
HCL Technologies (A) case study, I don’t think there is a likelihood of country
entering into an armed conflict with a neighbouring country.
• Role Local Governments Play – Local governments are highly influential in
the policy making process and implementation as most of the policies and
regulations are implemented by the local government as enforcement agencies
mostly report to local government in their own states regarding various laws.

Economic Factors that Impact HCL Technologies

• Demand Shifts from Goods Economy to Service Economy – The share of

services in the economy is constantly increasing compare to the share of
manufacturing, goods, and agriculture sector.
• Financial Market Structure and Availability of Capital at Reasonable Rates –
The quantitative easing policy of Federal Reserve has led to liquidity flooding
all across the global financial markets. Hcl can borrow cheaply under such
circumstances. But this strategy entails risks when interest rate will go up.
• Government Spending – As mentioned in the political factors, government of
the country is running deficit budgets. The implication for Hcl is that it can
boost sales of its product in short run but also expose Hcl to medium term
forex and currency depreciation risks.
• Inflation Rate – The inflation rate can impact the demand of Hcl products.
Higher inflation may require Hcl to continuously increase prices in line of
inflation which could lead to lower levels brand loyalty and constant
endeavours to manage costs. Cost Based Pricing could be a bad strategy under
such conditions.
• Consumer Disposable Income – The household income of the country has
increased constantly in the last decade and half, compare to the USA market
where household income is still below 2007 levels and not increased in real
terms since early 1980’s. Hcl can leverage this trend to expand the market
beyond its traditional customers by employing a differentiated marketing
campaign.
• Work Force Productivity – Work force productivity in US has grown by 25-
30 % in last two decades even though the salaries are not reflecting those
gains. It can enable Hcl to hire skilled workforce at competitive salaries.
• Employment Rate – If the employment rate is high then it will impact Hcl
strategies in two ways – it will provide enough customers for Hcl products,
and secondly it will make it expensive for Hcl to hire talented & skilful
employees.

Social Factors that Impact- HCL Technologies

• Birth Rate – Birth rate is also a good indicator of future demand. USA has
avoided the European Union style stagnant economy on the back of slightly
higher birth rate and higher level of immigration.
• Attitude towards Authority – Various cultures in different part of the world
have different attitude towards authority. In Asia authority is respected while
in west it is something to rebel against. Hcl should carefully analyse the
attitude towards authority before launching a marketing campaign for its
products and services.
• Societal Norms and Hierarchy – What sort of hierarchy and norms are
acceptable in society also influence the types and level of consumption in a
society. In highly hierarchical societies the power of decision making often
reside at the top
• Types of Immigration & Attitudes towards Immigrants – Given the latest
developments such as Brexit and Immigrant detention on Southern border of
United States. Attitude towards immigration has come under sharp focus. Hcl
should have capabilities to navigate under this hyper sensitive environment.
• Power Structure in Society – Hcl should carefully analyze both - What is the
power structure in the society? How it impacts the demand in the economy.
For example, the power structure in US economy is slowly moving towards
the older generation as that generation has higher disposable income compare
to the younger generation.
• Attitude towards Health & Safety – The attitude towards health and safety is
often reflected in the quality of the products and cost structures of
manufacturing processes. Hcl has stringent norms for health and safety norms
so in emerging economies it may have to compete with players who don’t have
high-cost structures that of Hcl.
• Gender Composition in Labor Market- Hcl can use gender composition of
labor market to understand the level of liberal nature of the society, women
rights, and women’s say in matter of societal issues and consumption
decisions. The gender composition of labor market is a good indicator of
disposal income of household, priorities of the households, and related needs.
• Demographic Trend – The demographic trend is one of the key factors in
demand forecasting of an economy. For example, as the population of USA
and EU is growing old the demand for products mostly catering to this
segment will grow. Hcl should consider demographic trends before new
product developments and integrate features that cater to this segment. As
population is ageing it will require less tech intensive products.

Technological Factors that Impact HCL Technologies

• Technology transfer and licensing issues for Hcl – laws and culture of
licensing of IPR and other digital assets should be analyzed carefully so that
Hcl can avoid shakedowns and IPR thefts.
• Level of Acceptance of Technology in the Society – Hcl has to figure out the
level of technology acceptance in the society before launching new products.
Often companies enter the arena without requisite infrastructure to support the
technology-oriented model.
• Mobile Phone & Internet Penetration – Hcl should assess the level of internet
and mobile phone penetration in the country as it will it in building a requisite
business model based on local needs and realities.
• Preparedness for 5G Related Infrastructure – Countries across the world are
trying to prepare themselves to install 5G infrastructure. Hcl should assess to
what level the local market is prepared to roll out the 5G connectivity.
• Property Rights & Protection of Technology Oriented Assets – Hcl should
analyse the legal status of various property rights and intellectual property
rights protections that are common in US.
• Cost of Production and Trends – Hcl should assess - What are the cost of
production trends in the economy and level of automatization. We at EMBA
Pro believe that in near future the sector most disrupted by technological
innovation is manufacturing and production.
• E-Commerce & Related Infrastructure Development – As E-Commerce is
critical for Hcl business model. It should evaluate the e-commerce
infrastructure, technology infrastructure etc before entering a new market.
• Transparency & Digital Drive – Hcl can use digitalization of various processes
to overcome corruption in the local economy.
Environmental Factors that Impact HCL Technologies

• Focus & Spending on Renewable Technologies – How much of the budget is

spend on renewable energy sources and how Hcl can make this investment as
part of its competitive strategy.
• Environmental Regulation Impacting Absolute Cost Advantage Dynamics in
the Industry.
• Per Capita and National Carbon Emission – What is the per capita carbon
emission of the country and what is the overall level of carbon emissions of
the country. This will help in better predicting the environment policy of the
country.
• Level of Consumer Activism Regarding Environmental Concerns – Hcl needs
to know the level of consumer activism regarding environmental concerns is.
It will help Hcl in both developing environmentally friendly products and
thwarting PR stumble blocks.
• Waste Management – What is the policy of waste management in the
prospective market and how Hcl can adhere to the waste management
requirements in that market.
• Paris Climate Agreement and Commitment of National Government under the
Agreement – What are the commitments of the country under the Paris
Agreement and what is the general level of consensus regarding Paris Climate
Agreement in the country. For example Trump not standing by US
commitments created an environment of uncertainty.
• Environmental Standards and Regulations both at National & Local Levels –
Often the environment policy at national and local level can be different. This
can help Hcl in numerous decisions such as plant location, product
development, and pricing strategy.

Legal Factors that Impact HCL Technologies

• Securities Law – What are the securities law in the country and what are the
conditions to list the company on national or regional stock exchange.
• Employment Laws – What are the employment laws in the country and are
they consistent with the business model of Hcl. For example Uber
employment system is not consistent with French laws and it is facing
challenges in the country.
• Business Laws – Before entering into new market – Hcl has to assess what are
the business laws and how they are different from home market.
• Health & Safety Laws – What are the health and safety laws in the country
and what Hcl needs to do to comply with them. Different countries have
different attitude towards health and safety so it is better for Hcl to conduct a
thorough research before entering the market.
• Consumer Protection Laws – Hcl needs to know what are the consumer laws,
what is the rate of enforcement, what is the attitude of authorities towards
consumer protection laws, and what is the role activist groups in enforcement
of consumer protection laws.
• Independence of Judiciary and Relative Influence of Government – The
judiciary independence often reflect both strength and credibility of the
institutions in the country.
• Adherence to Common Law – Is the country following common law which is
uniform for all parties – whether domestic or international. If there is
arbitrariness in the judicial process then Hcl can’t be sure of the judgments.

VALUE CHAIN ANALYSIS OF HCL TECHNOLOGIES

As illustrated in the Value Chain diagram, Hcl has five generic categories
of primary activities –

PRIMARY ACTIVITIES OF HCL

Inbound Logistics
These activities of Hcl are associated with receiving, storing and disseminating
the inputs of the products. It can include warehousing of physical products,
material handling, as well as architecture to receive and store customer
information for digital media company. Hcl at present has outsourced most of its
inbound logistics activities.

Operations
Activities that help the organization to transform raw material into finished
products. For the purpose of this article the definition is broad – it can mean
moulding plastic to make products, using customer data to serve advertisements
based on usage behavior to clients etc.

Outbound Logistics
Hcl under takes these activities to distribute the finished products to channel
partners and final buyers. Outbound logistics activities include – scheduling,
wholesalers and retailers order fulfillment, processing, distribution network, and
warehousing.

Marketing and Sales

These activities are undertaken by Hcl to create means through which the buyer
can buy a firm’s products. These activities include – pricing, channel selection,
sales force management, advertising and promotion, marketing etc.

Services
Hcl needs to provide after sales services and maintenance for successful usage of
the product. Service activities of Hcl can include – part supply, post sales
maintenance, training, installation services, and product forward and backend
alignment of software.

SUPPORT ACTIVITIES OF HCL

As the name explains, Support Activities of Hcl are the one that supports the
firm’s Primary Activities. Porter divided the Support Activities into four broad
categories and each category of support activities is divisible into a number of
distinct value activities that are specific to the industry in which Hcl operates.
The four generic support activities are –

Firm Infrastructure
Firm infrastructure support activities at Hcl consists activities such as – planning,
legal services, quality management, finance and accounting and general
management.
Firm infrastructure activities at Hcl supports entire value chain though the scope
varies given that Hcl is a diversified company even within the industry. For
example the finance and planning at Hcl are managed at corporate level while
quality management, accounting and legal issues are managed at business unit
level.

Human Resources Management

In an environment where each organization is striving to become a learning
organization, Human Resources Management is key to the success of any
organization. HRM support activities include – Recruiting, Training &
Development, Skill Assessment, People Planning, Hiring, Selection and
Compensation at both business unit level and corporate level.
Human resource management affects competitive advantage in any firm, but in
some industries, it is defining factor. For example, in the consulting companies
HR is the main source of competitive advantage.

Technology Development
Technology supports almost all activities in modern day organization. In the
technology industry, technology development has become a source of
competitive advantage. Technology development at Hcl may include activities
such as - process engineering, technology selection, component design, feature
design, and field-testing.

Procurement Activities at Hcl

Procurement activities at Hcl include activities that are undertaken to purchase
inputs that are used by Hcl’s value chain. It doesn’t include purchase inputs
themselves. Purchased inputs may include - raw materials, supplies, machinery,
laboratory equipment, office equipment, and buildings.
Like all other value chain activities procurement also employs technology for
things such as – procedures, vendor management, information system, and supply
chain partner qualification rules and ongoing performance evaluation.

HCL’S BLUE OCEAN STRATEGY

The cornerstone of Blue Ocean Strategy is - "Value Innovation". Value
Innovation places equal emphasis on both Value and Innovation. Hcl needs to not
only redefine the value proposition it is providing to existing customers (clients)
but also needs to create new value proposition for target segments (customers)
that at present are not Hcl clients. Value innovation can open up new uncontested
market space for Hcl.

Four Critical Factors that Hcl can use for Value Innovation are -

Buyer Utility - It underlines the core values, features or utility Hcl products or
services deliver to the buyer. The benefits can be both perceived and real.

Price - In traditional scenarios competitors compete in the Strategy & Execution

following traditional approach of pricing - ‘Offer customer more for less’. This
can provide serious challenge to company’s bottom-line (profitability).

Cost - Managers at Hcl can use value innovation to overcome limitations

suggested by Michael Porter (management guru, strategy guru) in his value cost
trade-off as part of competition-based strategy. Using Blue Ocean strategy Hcl
managers can pursue both differentiation and low cost simultaneously.
Adoption - When innovation is pursued in isolation of the value then it can lead
to very low level of adoption no matter how significant technological
breakthrough is.

HCL TOWARDS COST LEADERSHIP:

However, HCL Technologies should ensure contingency for imitation by
competition, as well as be prepared for competing payers to imitate its cost-
effectiveness strategy to decrease and control their costs, and increase the overall
share of the pie for their products as well. It is therefore important that HCL
Technologies does not only settle for one means of cost leadership but continually
improves. This can be done through several different methods,
• Engaging and applying the Japanese technique of kaizen
• High efficiency
• High limit use
• Use of dealing capacity to arrange the least costs for generation inputs
• Lean production techniques (for example JIT)
• Effective creation process
• Effective dissemination channels
• Access to the capital expected to put resources into innovation that will cut
expenses down.
• Strategic alliances to share resources and cut costs.
• A minimal effort base (work, materials, offices), and a method for
economically cutting expenses beneath those of different competing
players.
CONCLUSION:
From the analysis of the IT industry and strategies of the HCL, it is clear
that HCL is a ambitious firm trying to innovate continuously, reduce costs, gain
competitive advantage, improve its market position and deliver superior value to
its customers. The different forms of analysis gives us a clear picture that, the
firm will successfully continue its operations in the future and gain customer
loyalty, to drive the industry in the future.