INFOSYS

1. INFOSYS

2. IT Service Industry Overview

3. PEST ANALYSIS Political Economic Global IT spending (demand) Domestic IT Spending (Demand) Currency Fluctuation Real Estate Prices Attrition • Political stability • Government owned companies and PSUs have decided to give more IT projects to Indian IT companies. • Terrorist attack or war.

4. PEST Analysis Social Technological Telephony Internet Backbone New IT technologies Technologies like SOA, Web 2.0, High-definition content, grid computing, etc • Language spoken: English • Education: A number of technical institutes and universities over the country offer IT education. • Working age population

5. Porter’s Five Forces Model • Threat of Substitutes: Medium • Other offshore locations such as Eastern Europe, the Philippines and China • Price • Bargaining power of supplier: High to Low • Due to slowdown, the job-cuts, the layoffs and bleak IT outlook. • No longer Demand and supply of IT professionals • Vast talent pool – fresher's and experienced.

6. Porter’s Five Forces Model • Barriers to Entry : Low • Low capital requirements. • Large value chain, space for small enterprises. • Bargaining Power of Customers:Very High 1. Large number of IT companies 2. Huge decline in IT expenditure • Rivalry Among Firms: High • 'low-cost, little-differentiation' positioning. • Strong competitors – few numbers of large companies.

7. Infosys Profile • Founded on 2nd July 1981 with a capital of Rs.10,000 • Went Public in 1993 • 1st Indian Company to be listed on Nasdaq on 11th March 1999 • Global footprint : Over 50 offices and development centers • Employees: 103,905 (As on 30th June 2009) • Certified at SEI- CMM Level 5. • Major Clients: British Telecom, BanAmerica, Citigroup, Walmart

8. Infosys Resources • Tangible People Capital Global Reach • Intangible Brand Equity Trust & Goodwill Corporate Culture

9. Infosys Capabilities • Global Delivery Model • Training Capabilities • Operational Efficiency • Management/Leadership • High Quality Standards

10. VIRU Analysis • IBM - Brand Equity - Global Reach - R & D focus - Bouquet of Services • Infosys - Brand Image, Culture - Operational Efficiency - Marketing Strategy • Mastek - No growth strategies - High operational costs, Limited reach - Expertise in Insurance Sector • L & T Infotech - Weak Brand Image - No cost efficiency, No reach - No special service or industry capability

11. Sustainable Competitive Advantage

12. VALUE CHAIN ANALYSIS • Primary Activities • Inbound Logistic • Operation • Outbound Logistic • Marketing And Sales • Post Sales Service

13. CONTD…… • Secondary Activities • Human Resource Management • Technology Management • Infrastructure

14. McKINSEY’S 7 S MODEL • Strategy: • Client-focused strategy to achieve growth • Focuses on limited number of large organizations throughout world • Caters clients through custom-built softwares • Commands premium margins • Does not compromise on quality for low-cost contracts • Quality driven model rather than cost-differentiating model. • Increase business from existing and new clients • Expand geographically • Enhance solution set • Develop deep industry knowledge • Enhance brand visibility • Pursue alliances and strategic acquisitions • Staff (Human Resources): • Knowledge-based industry - Focuses on the quality of the human resources • 90% Engineers • At the entry level • Find the company’s meritocratic culture satisfying • Superior academic records • Technical skills • High level of learn ability. • Emphasizes on T&D on continuous basis • Spends about 2.65 % of revenue on up gradation of employees’ skills • High training standard • High matured processes capabilities • Investment in infrastructure. Shared Values: Customer Delight-A commitment to surpassing customer expectations. Leadership by Example-A commitment to set standards in business and transactions and be an exemplar for the industry and teams. Integrity and Transparency-A commitment to be ethical, sincere and open in our dealings. Fairness- A commitment to be objective and transaction-oriented, thereby earning trust and respect. Pursuit of Excellence-Acommitment to strive relentlessly, to constantly improve ourselves, our teams, our services and products so as to become the best • Leadership Style: • Essential for organizational success. • Based on high business vision and supportive styles. • Emphasis on developing leadership qualities among employees. • “Infosys Leadership Institute” • Open door policy • Continuous sharing of information • Employee input for decision making • Building personal rapport with employees • Skills: • Mandatory for every employee to clear 7 predefined certifications (domain as well as technical) in order to be eligible for appraisal. • This is just one of the initiatives taken by Infosys which signifies the efforts taken for building competencies. Apart from internal initiatives like • Knowledge management • Infosys has been CMM-Level 5 certified for its process capabilities • Organizational Structure: • Free form organization devoid of hierarchies • Everyone is known as associates irrespective of his position in the company Software development is undertaken through teams • Constitution of teams is based on the principle of flexibility

15. INFOSYS BCG MATRIX - USA

16. INFOSYS BCG MATRIX - INDIA

17. CORPORATE LEVEL STRATEGIES Core Strategies: Firm believer in “Organic growth” and acquire only those companies in line with strategic goals Global Delivery Model – Producing where it is most cost effective to produce & selling where it is most profitable to sell. Moving up the Value Chain – Getting involved in a software development project at the earliest stage of its life cycle. PSPD Model – “Predictability of Revenues, Sustainability of Revenues, Profitability, De-risking” for risk management.

18. CORPORATE LEVEL STRATEGIES Actions Taken: 1. To maintain low-cost advantage they have opened offices in Czech Republic, Mauritius, Poland, Philippines, Thailand and Mexico 2. Invested in developing training centers 3. Improved quality capabilities – CMM level 5i company 4. Infosys Consultancy established to provide high end services in value chain 5. Has hedged currency for more predictability of revenues (risk management)

19. GENERIC STRATEGIES • Low cost Global delivery 24/7 Model • Little differentiation in low-end services of value chain • High differentiation in high end services of value chain like software products and package solutions • Focus on quality, customer relationship management, timely-delivery

20. SWOT Analysis STRENGTHS WEAKNESSES Dependence on BFSI Segment for revenues Dependence on North America for revenues Weak Player in domestic Mkt Rising Operating Expenditure Low R & D focus • Trusted Brand & Client Relations • Proven GDM • Wide spectrum of Services • Leadership & Management • Quality Standards

21. SWOT Analysis THREATS OPPORTUNITIES Intense Competition High dependency on small no. of clients Currency Fluctuations • Untapped Domestic Market • New Geographies • Acquisitions • High End Consulting

22. Recommendations • Reduce Dependency on BFSI, North America, Explore new markets • R & D Focus • Hunt for Acquisitions • Focus on cost reduction • Tap Domestic Market