Strategy Analysis of

Infosys

Submitted By: Yash Jhunjhunuwala

Roll No- 2020
Submitted to: Dr. Rajiv Joshi
 Vision And Mission

» 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."
 Values
» Infosys’ value system is best articulated by the acronym
C-Life – Customer Delight, Leadership by Example,
Integrity & Transparency, Fairness and Pursuit of
Excellence.
» The major objective of the company is to become India’s
most respected company.
» Infosys deliberately defocused on revenue and profits.
Their goal was to do everything by the book.
 Introduction to Infosys

 Infosys Technologies Ltd. was started in 1981.

 Today, it is a global leader in the "next generation" of IT and consulting.

 Infosys defines, designs and delivers technology-enabled business solutions

that help Global 2000 companies win in a Flat World.

 Infosys serves the client globally and is one of the pioneers in strategic
offshore outsourcing of software services

 Infosys pioneered Global Delivery Model (GDM)

 Insurance Healthcare and Life Sciences

Banking and capital Markets

Communication Media and Entertainment

Enterprise Solutions (ES)

Consulting Solutions (CS)
Energy, utilities and Services

Retails, Consumer Goods and Logistics

Manufacturing
Infosys - Business Lines

New Markets and Services

India Business Unit

 Financial Growth

3.90
Application Development and
6.80 Maintenance
3.60
2.20 Business Process Management

6.30 Consulting services and packages

42.40
Infrastructure Management

product Engineering services

System Integration
24.90
Testing Services

6.00 Others

Revenue Break
Industry Segmentation Performance

8%
2% Manufacturing
20%
6% Banking,
Financial Services,
Insurance
13%
Telecom
Retail
Energy & Utilities
18% 34%
Trasnportation
Others
 S.W.O.T. Analysis
Strengths Weaknesses
» Cost advantage – Presence of Infosys in » Excessive dependence on USA for
revenues – US Companies are cutting
India is key to its success
down IT budget hence revenues to be
» Breadth of service offering – end to hit hard for Infosys
end solutions including high end » Excessive dependence on BFSI sector
services like IT consultancy and KPO for revenues – Banking sector is facing
» Quality and maturity of process – a crisis globally and is going to spend
Infosys has quality standards such as less on IT
CMM Level 5i to differentiate from » High rates of attrition – Although
other competitors slowdown in global economy has
» Global and 24/7 delivery capability – lowered attrition rate but the industry
still faces high attrition rates as
excellent internet backbone and
compared to other sectors
telecommunications facilities enabling
» Decreasing competitive advantage –
companies to develop 24/7 delivery
rising salary expenses is taking away
capabilities from India itself the cost advantage enjoyed by Indian
companies (including Infosys).
 S.W.O.T. Analysis

Opportunities Threats
» Greater scope for product innovation » Global economic slowdown may
continue for several years – hence low
» Increased focus on high end work like
IT spending globally
consulting and KPO » US Govt. against outsourcing
» Domestic demand for IT services is to » Shrinking margins due to rising wage
grow at 20 % inflation
» Greater scope to service domains other » Rupee-dollar movement affects revenue
than BFSI such as Transportation, and hence margins
» Increased competition from foreign
Infrastructure, etc.
firms like Accenture, IBM etc.
» Satyam fiasco – Likely to have positive
impact on business considering corporate
governance, possibility of shifting of » Increased competition from low-wage
countries like China, Indonesia etc.
business, getting higher incremental
business from overlapped clients, and
winning new business from new clients
 Porters Five Forces Model

Threat of Substitutes:
1. Threat
Otherofoffshore
Substitutes:
locations – Low Cost
1. Locations
Other offshore locations
like Eastern – Low Cost
Europe,
Locations and
Philippines like China.
Eastern Europe,
2. PricePhilippines
quoted isandtheChina.
biggest
2. Differentiator.
Price quoted is the biggest
Differentiator.

Rivalry among Firms: Bargaining Power of Customers:

Bargaining Power of Supplier:
1. Rivalry among Firms:
Low Cost 1. Bargaining Power
Large Number of of
ITCustomers:
Companies
1. Bargaining
Due to SlowPower
Down,of Supplier:
Job Cuts, 1. vying
Large Number of IT Companies
for projects – High
1. layoff
Due to 2. 1. Commoditized
Low Cost
& Slow
bleak Down, Job Cuts,
IT outlook 2. offering
Commoditized vying for projects – High
Competition
2. Demandlayoff Supply
& bleakisIT outlook
not 2. Huge Competition
Decline in IT
3. High offering
Industry
2. favorable
DemandtoSupply is not
employees 2. Expenditure
Huge Decline in IT
3. growth
High Industry
favorable to
3. Availability of employees
vast pool of Expenditure
growth
3. talent.
Availability of vast pool of
talent.

Barriers to Entry:
1. Barriers to Entry:
Low Capital Requirements
1. Low Capital
2. Large value chain Requirements
for small
2. enterprises
Large value chain for small
3. MNCs enterprises
are ramping up capacity
3. and
MNCs are ramping
employee strengthup capacity
and employee strength
 HIGH BCG Matrix – Infosys (India)

Maintenance
Software Products
Package Implementation
Business
Growth
Rate
LO
W

NONE Consulting, BPO,

KPO

HIGH LOW

Market Share
 Strategy Analysis - Infosys
• Global Delivery Model
• Moving UP the value chain
Corporate
Level
• PSPD Model

• Low Cost
• Differentiation
Generic
Strategy
• Focus

• Ansoff’s Matrix
• Market Penetration Strategy
Grand • Market development Strategy
Strategy • Product Development Strategy
 Infosys- Corporate Level Strategy

» Global Delivery Model: Producing where it is most cost effective and selling where
it is most profitable.
» Moving UP the value chain: Getting involved in a software development project at
the earliest stage of the life cycle.
» PSPD Model: “Predictability of Revenues, sustainability of revenues, Profitability,
De-Risking” for Risk Management.
» Actions Taken
» Expansion into low cost countries like Mauritius, Philippines, Thailand, Mexico
etc.
» Improved Quality capabilities -> CMM Level 5i
» Emphasis on delivering high value services
» Currency hedging for predictability of revenues.
» Investing heavily in training centers.
 Infosys – Generic Strategy
» Low cost Global delivery 24/7 Model

» Little differentiation in low-end services of value chain; high differentiation in high

end services in value chain like software products and package solutions.

» Focus on Quality, Customer relationship management, timely delivery.

 Infosys – Grand Strategies
» Ansoff’s matrix

Current Market New Market

Market Penetration Market Development

Current Product
Strategy Strategy

Product Development
New Product Diversification Strategy
Strategy
 Market Penetration Strategy
» Current Markets: USA and Europe
» Current Products: 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 results.
 Market Development Strategy
» New Market: India, Middle-east and Australia
» Current Product: ADM, 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 new markets.
» Result of strategy: Likely to yield good result.
 Product Development Strategy
» Current Market: USA and Europe
» New 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).
 Diversification Strategy
» 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)
References