Project Report

On

SWOT Analysis Of Infosys

Sumeet Singh

MBA (Gen)

Roll .No.= 89 Sec = B

Contents

Sr.No. Subject Covered Page No.

1 Introduction 4

2 Strengths 5

3 Weaknesses 6

4 Opportunities 7

5 Threats 8

1. Introduction :

Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by

seven people with US$ 250. Today, we are a global leader in the

"next generation" of IT and consulting with revenues of over US$ 4

billion.

Infosys defines, designs and delivers technology-enabled business

solutions that help Global 2000 companies win in a Flat World.

Infosys also provides a complete range of services by leveraging

our domain and business expertise and strategic alliances with

leading technology providers.

Infosys' offerings span business and technology consulting,

application services, systems integration, product engineering,

custom software development, maintenance, re-engineering,

independent testing and validation services, IT infrastructure

services and business process outsourcing

Infosys pioneered the Global Delivery Model (GDM), which emerged

as a disruptive force in the industry leading to the rise of offshore

outsourcing. The GDM is based on the principle of taking work to

the location where the best talent is available, where it makes the

best economic sense, with the least amount of acceptable risk.

Infosys has a global footprint with over 50 offices and development

centers in India, China, Australia, the Czech Republic, Poland, the

UK, Canada and Japan. Infosys and its subsidiaries have 103,905

employees as on June 30, 2009.

2. Strengths :

Since the company is based in India its competitive advantage

is enhanced.The Indian economy, despite weak economic

indicators such as relatively high rates of inflation, has low

labor cost

The workforce has relatively high skills levels in Information

Technology. Couple these two elements together and you have

an operational basis that offers low-cost based, highly skilled

competitive advantage.

Trained Indian personnel often speak very good English and

are sensitive to Western culture, underpinned by India's

colonial past.

Infosys is in a strong financial position. The business turned

over more than $4 billion in 2008. This means that it has the

capital to expand, and also the basis to leverage potential

invest.

The company has bases in 44 global development centres,

most of which are located in India, although the company has

offices in many developed and developing nations. This means

not only that Infosys is becoming a global brand but also that it

has the capability to support the global operations of

multinational clients.

3. Weaknesses :

Infosys on occasion struggles in the US markets, and has

particular problems in securing United States Federal

Government contracts in North America. Since these contracts

are highly profitable and tend to run for long periods of time,

Infosys is missing out on lucrative business.

And its competitors do well in terms of securing the same

Federal business (and one should also take into account that

many of its competitors are domiciled in the US and there

could be political pressure on the US Government to award

contracts to domestic organizations).

Despite being a huge IT company in relation to its Indian

competitors, Infosys is much smaller than its global

competitors. As discussed above, Infosys generated $4 billion

in 2008, which is relatively low in comparison with large global

competitors such as Hewlett-Packard ($91 billion), IBM ($91

billion), EDS ($21 billion) and Accenture ($18 billion).

It is sometimes argued that Infosys is weaker when it comes to

high-end management consultancy, since it tends to work at

the level of operational value creation. Competitors such as

IBM and Accenture tend to dominate this space.

4. Opportunities :

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.

The strategic alliance between Infosys and Schlumberger gives

the IT company access to lucrative business in the gas and oil

industries.

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

.

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 centres 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.

5. Threats :

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 realised 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.