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MBA-2012 | LT-1A
MBA-2012 | LT-1A
a premium price IT solutions player. Further, INFOSYS developed its own custom Value Articulation Frameworks to communicate clearly the marginal value delivered to its customers that justified its premium pricing and also as a marketable USP v/s the competition. Marketing and business development in each country are led by resident senior Business Development Managers who establish leads to new clients and nurture existing client relationships to help in client retention. Additionally, INFOSYS has practiced inclusive growth by offering ESOPS and creating many millionaires amongst its employees. This values based-branding creates trust in the minds of various business stakeholders. INFOSYS is the second largest IT major in India by revenues and size. TCS, Cognizant, Wipro, Mahindra Satyam, etc. are some of the Indian competitors of INFOSYS whereas Accenture, IBM, Capgemini, etc. are the major international competitors of INFOSYS in the software services sector. Apart from these, thousands of other small and medium software companies compete with INFOSYS in different segments for micro chunks of the market. Businesses across industry segments are always under pressure to increase their productivity by IT enabling the various internal functions and external supply chains. What the industrial revolution did to businesses in the 18th and 19th century, the IT and telecom revolution did to businesses in the end of 20th century improved efficiencies of production. Thus, an inordinate price-inelastic demand for IT solutions was fostered across geographies which counter-balanced the monopolistic market condition. As a consequence of the aforementioned conditions, INFOSYS established itself as a price maker in the market and held the mantle of industry leadership in terms of strategy, size, positioning, and corporate social responsibility. Though absolute financial numbers place it in the second position in India, when it comes to brand recognition or awards and recognition, it is superior to all its Indian competitors. It has been awarded repeatedly by the MAKE, TIMES, FORBES, Economic Times, and even other industrial bodies. But the most valued of all is the numerous appreciations and preferred partner statuses offered by client companies of world repute across industries and locations. EXHIBIT-1 shows growth comparison of Total Profit and Total Revenues.
MBA-2012 | LT-1A
Overall INFOSYS has been very effective in anticipating the macro-economic shifts in the global business environment and in formulating strategies to manage the effects of the same. So I dont think it will be caught in a Prisoners Dilemma till 2015. During my career at INFOSYS I noted several instances where INFOSYS managed to steer clear of the potential risks by strategizing in advance. A most noteworthy example is the early anticipation of anti-offshoring sentiment and the financial recession of USA. As far back as 2005, INFOSYS announced a strategic goal to change its revenues composition across geographies from 75%-US | 25%-ROW to 50%-US | 50%-ROW to de-risk its operations and margins. Marketing focus was shifted to the EMEA geographies where the Euro and Oil prices were more probable to appreciate or at least remain stable over the subsequent years. This strategy paid off handsomely, as, by 2008, INFOSYS revenue composition was around 57%-US & 43%-Non-US. This shielded INFOSYS revenues and margins from the actual Wall Street collapse which was triggered-off by the Sub-prime Mortgage crisis. In another related strategy, INFOSYS continued to invest heavily in building up its human capital pool by recruiting thousands even through the recessionary period. This helped the company to be better prepared than its competitors when the recessionary clouds lifted and there was an increased IT spending by businesses across the world. Thus, I feel confident about the growth and sustenance of INFOSYS in the long run.
[1342 words overall]
EXHIBIT-1
Millions
200,000
180,000
160,000
156,480
140,000
131,490
120,000
100,000
90,280
INCOME
80,000
68,600
PROFIT