GSDE Assignment

Case: TO DIVERSIFY OR TO CONSOLIDATE: NICT AT A CROSS ROADS

Submitted by:Arjun Yadav

2013PGPM009

Q1. Do you think NICT should take up PBI Offer?

Ans 1. Advantages of accepting the offer:

It is a huge project that will increase their presence all over the country.
It will ensure a fixed stream of cashflows that is critical for NICT.
A successful completion of the project will allow NICT to gain a stronghold over
technology in rural areas.
With an increased level of standardization, they will be able to achieve economies of
scale.

Disadvantages of accepting the offer:

The company was very high on moral values and a long term project with the Indian
government subtly meant that they might have to compromise on their values.
Bureaucracy, corruption, lost control and other evils may not let NICT work the way
they are known to.
Compromise relations with current big clients.

Accepting the offer will change the situation forever. If they are able to mitigate the
risks by coming up with better terms for the offer contract, this will ensure tremendous
growth for the company.

Q2. What are ramifications with respect to SBI & BOI if it takes up SBI Offer?
Ans 2. NICT had done major project with SBI and BOI in the future. Evidently, they
enjoyed good relations with them. Accepting the current proposal will lead to
compromise in trust between NICT and the two banks due to the conflict of interest in
the PBI project and future plans of SBI and BOI. It is a classic case of trade-off vs benefits.
They need to choose the side that is best for their vision and mission.