Project Report

On

SWOT Analysis Of Infosys

S
umeet 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.