infosys - group 15

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Company AnalysisCompany Analysis

Infosys Technologies Ltd.Infosys Technologies Ltd.

Presented by

Group 15B Prathik B08075

Neha Patil B08091

Pallavi Pradhan B08093

Shwetank Jain B08110



Infosys - Organization

SWOT

Strategic management

Future Trends in Industry

Infosys coping up..

Thank You

AgendaAgenda



IntroductionIntroduction



ValuesValues



Intangible ResourcesIntangible Resources

Magnet for the

Best Global Talent

Industry

Leader



Intangible ResourcesIntangible Resources

Strategic Research

Customer Delight



Tangible ResourcesTangible Resources

Financial resources

Physical resources

44 global development centers

People across 70 nationalities



Tangible ResourcesTangible Resources

T echnological

resources

Patents



OrganisationalOrganisational ResourcesResources



Core CompetenciesCore Competencies



CapabilitiesCapabilities



Fuel for growth..!Fuel for growth..!



Faster Innovation..!Faster Innovation..!



Money from Information..!Money from Information..!



Winning in the turns..!Winning in the turns..!



Integrated Risk ManagementIntegrated Risk Management



Competitors from countriessuch as China or Korea

Customers may switch toother offshore servicecompanies

all global IT players, Infosys hasto compete for skilled laborand this may have the effect of

driving up wage levels, andmaking it more difficult to

hard times could be profitablefor Infosys

There is a new and emergingmarket in China

The strategic alliance betweenInfosys and Schlumbergergives the IT company accessto lucrative business (gas andoil)

Depends on US markets

Infosys is much smaller than

its global competitors Infosys is weaker when it

comes to high-endmanagement consultancy

low labor costs

has relatively high

skills and English speakingworkforce

strong financial position

44 global developmentcentres

global brand

STRENTHS WEAKNESSES

THREATSOPPORTUNITY

SWOT Analysis of INFOSYSSWOT Analysis of INFOSYS



Competitors AnalysisCompetitors Analysis

Industries Where Infosys Competes:

Computer Services

Information Technology Services (primary)

y Business Services

Consulting

Staffing

x Outsourced Human Resources Services



COMPETETORS ANALYSIS cont.COMPETETORS ANALYSIS cont.

COMPANY INFOSYS WIPRO SATYAM TCS

Sales 17,461.20 15,648.00 8,137.28 18,533.72

Operating profit 3,684.30 4,963.00 1,828.54 5,020.11

Interest 116.8 - 5.9

43.

42

Gross profit 3,925.80 5,646.00 2,079.80 5,462.64

EPS (Rs) 20.96 78.15 25.59 46.07

COMPANY INFOSYS WIPRO SATYAM TCS

PE ratio 11 16.35 1.7 11

EPS (Rs) 20.96 78.15 25.59 46.07

Sales (Rs crore) 5,397.00 5,429.00 2,700.52 5,875.48

Net profit margin (%) 17.19 27.37 20.38 24.11

Return on average

equity 26.51 33.13 23.32

41.3

4



Porter·s 5Porter·s 5 ForcesForces

BargainingPower of Suppliers

High

Human

resourcehas highbargain

power aslow

switchingcost

BargainingPower of Buyers

High

Largenumber of software

firmsofferingsimilar

services

Threat of New

entrants

Low

Organisations strive on

existingclients by

maintainingrelationship

s

Threat of substitutes

Low

IT serviceskeep on

evolving butno quantum

changeexpected

soon

CompetitiveRivalry

High

Largenumber of

firmsfighting forthe same

customers



Infosys Strategic ManagementInfosys Strategic Management

InfosysStrategic

Management

Threat of New

entrants

BargainingPower of Suppliers

BargainingPower of

Buyers CompetitiveRivalry

Threat of substitutes



y Creating diverse workforce greatest challenge for global

firms

y Infosys·s Answer: 91,000 employees from 70 nationalities

working across 90 countries

y ´Ethno-centricµ corporate culture

y Diversity at the top management level is must

y Infosys·s current strategy: Hiring multinational top

executives along with hiring multinational employees.

Tackling Competitive RivalryTackling Competitive Rivalry



y From the CEO to the shop-floor worker

y Awarding Champions, black belts and green belts

y Champions, senior executives and managers accountable

for the results of the Six Sigma projects

y Green Belts, project team members or employees who

execute Six Sigma as part of their jobs

y Black Belt is a key change agent for the Six Sigma

process (1%-3%)

y More than 200 Black Belts to monitor projects

Reducing Bargaining Power of BuyersReducing Bargaining Power of Buyers

Training Focus:



y Six Sigma certification, a confirmation of an

individual·s capabilities with respect to particularcompetencies

y Involves training, written tests, and a hands-on display

of competencies.

y It gives options to employees to specialize in various

competencies

y Employee knowledge as well as skill-set develops.


Certifications:



y Many changes in the work culture in Infosys

y Open and transparent culture

y Ideas invited from everyone

y lack of hierarchy

y

Focus on a learning environmenty Leads to quality thinking at every level and in every

operation


Organizational Impact:



y Initiated Six Sigma processes in 1997 with consultationservices from Motorola

y

Already achieved the 4.8 level in more than 300 projects(3 being industry average)

y Implementing an action plan to equip all of its associateswith analytical skills

y Complete a minimum of 500 projects of different

processes and services under Six-Sigma guidelinesy Focus on a learning environment

y Future plans - training an additional 50-75 Green Belts,initiating an additional 5-10 key Six Sigma projects in thenext few months.


Current Scenario:



y Voted the best employer in the country in many HRsurveys in the recent years

y Well-known for its employee friendly HR practices

y A perfect mix of USD 2 Billion Company and cultureof a small company

y Recruits candidates through one of the toughest

selection processy Intensive 14 week training program

y One of the first companies to offer ESOPs to itsemployees

y Variable compensation structure

Reducing Bargaining Power of SuppliersReducing Bargaining Power of Suppliers



Changing Industry conditions andChanging Industry conditions and

Future course of InfosysFuture course of Infosys



Software Industry StructureSoftware Industry Structure ² ² Porter·s 5Porter·s 5--forcesforces

Force 1:Force 1: Intensity of Rivalry and CompetitionIntensity of Rivalry and Competition

Then (1990) - Low

y Very high growth inindustry

y Low relative fixed cost

y Wide variety of differentiating capabilities

y Smaller number of

players from mostlydeveloped world

Now (2004) - High

y Growth stabilized (seelater slides)

y Fixed cost are higher

nowy More difficult to

differentiate

y

Numerous playersaround the world withentry of low-costdeveloping world




Force 2:Force 2: Barriers to EntryBarriers to Entry

Then (1990) - Low

y Product

differentiation was

easiery Brands evolving

y Switching costs

lower

y Network effects not

completely

established

Now (2004) - Higher

y Product

differentiation is

hardery Brands established

y Much higher

switching costs

y Network effects

create significant

barriers




Force 3:Force 3: Bargaining power of SuppliersBargaining power of Suppliers

Then (1990) - High

y Strong developers in

short supply

y Few experienced

project/program

managers

y Education/training

concentrated &

evolving

Now (2004) - Low

y Large supply at low

cost from around the

worldy More experienced

managers available

y Matured education/

training freely

available




Force 5:Force 5: Threat of SubstitutesThreat of Substitutes

Then (1990) - High

y Bespoke software

lower in the stack

y Technology wasstrategic advantage ²

more custom

development

y Lower switching

costs

Now (2004) - Lower

y Bespoke software

higher up the stack

y Must have; efficiencyfocus - less custom

development

y Higher switching

costs




SummarySummary

Then (1990)

y Rivalry Lower

y Entry Barrier Lower

y Supplier power

higher

y

Buyer power lowery Substitutes higher

Now (2004)

y Rivalry Higher

y Entry Barrier

Moderate

y Supplier power

lower

y

Buyer power highery Substitutes lower



Software Industry ConsolidationSoftware Industry Consolidation

Industry has maturedTop 10 firms control 58% of Revenue

Industry has matured

Top 10 firms control 72% of Market Cap




y Industry has matured

y Top 10 firms control 58% of Revenue

Software Revenue 200424%

9%

6%

6%3%2%2%2%2%2%

42%

Microsof t Corporation

IBM

Oracle Corporation

SAP AG (ADR)

SOFTBANK CORP. (USA)

CSK Corporation (ADR)

Computer Associates International, Inc.

Electronic Arts Inc.

PeopleSoft, Inc.

Konami Corporation (ADR)

Other




Market Cap 2004

39%

9%7%

4%3%2%2%

2%2%

2%

28%

Microsoft Corporation

Oracle Corporation

SAP AG (ADR)

IBM

Symantec Corporation

Infosys Technologies Limited (ADR)

Computer Associates International, Inc.

SOFTBANK CORP. (USA)

Electronic Arts Inc.

Adobe Systems IncorporatedOther

Industry has matured

Top 10 firms control 72% of Market Cap



Software Industry asSoftware Industry as OligopolyOligopoly

39%

9%7%

4%

41%

Oligopolies

Microsoft

OracleIBM SAP



Company PerformanceCompany Performance

510

454

689

1132

1540

2122

2236

0

500

1000

1500

2000

2500

2002 2003 2004 2005 2006 2007 2008

EVA

46.57

38.2939.8

42.63

40.14

42.2

37.2

0

5

10

15

20

25

30

35

40

45

50

PAT% of avg capital employed

Source : Infosys Technologies Pvt. Ltd. , Annual Reports 2006-08



Major future TrendsMajor future Trends

y Increasing Labour costs

y Moving up the value chain

y Consolidation

y Manpower Shortage

y Outsourcing Backlash

y Engineering Services Outsourcing

(ESO), Avionics and other opportunities

infosys - group 15

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