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Analysis of Internal Strategic Context: SWOT Analysis

Paper type: Analysis
Pages: 6 (1320 words)
Categories: Business, Management, Marketing, Swot Analysis
Downloads: 7
Views: 42

Strength

TCS offer wide range of services such as digital enterprise, iON-small and medium businesses, eco-sustainability services, IT infrastructure services, enterprise security and risk management, business process services, consulting, IT services, engineering and industrial services, platform solutions, and supply chain management. TCS forms strategic partnerships with global major technology players like SaS, Adobe, CA, Symantec, NetApp, Oracle Bosch, Cisco, Networks, SAP and many others. This joint partner helps TCS to deliver innovative solutions, build competitive advantage over the peers and provide a collaborative platform for technological advancement.

Introduction of Business 4.0 leadership framework enable TCS to change buying behavior of market to attract more buyer from the market.

TCS is well-known brand as it is a subsidiary of TATA group. TCS has revenue growth at CAGR of 19.3% during 2013-2018 (Refer to Exhibit-1). These improve investor confidence for further investment in the company and provide returns to shareholders. TCS expanded its service to different segment of market line (Refer Exhibit-2).

For better accessibility company operates in Europe, Americas, the Middle East and Africa Asia-Pacific. Diversified business helps company to reduce risk of dependence on any business and allows service to wide range of customers. Also mitigate risk to business from political issues of different countries. TCS has ties with the prime educational institute for R&D in technology transformation, it has started ‘Ignite My Future in School’ program in the US to make a career in digital technology. The customer-centric strategy used to focus on delivery performance, offering full services and drives investment decisions. (Refer Exhibit-3)

HR strategy focus on talent development, talent acquisition through recruitment and training program. TCS has become a global top employer across 24 countries. Increase of local hiring reduces the dependency of on-site based professionals.

Weakness

The operational performance of TCS has declined in year of 2018. Sometimes this makes shareholders doubtful in terms of return on investment and may decline future investment in long term projects. SG&A expenses increased from INR 692 in the year 2017 bn to INR 744 bn in year 2018. Net profit margin decreased from 22.3% in 2017 to 20.9% in 2018. Rapid digital transformation increases company spending on various digital technologies.

Opportunity

THE global IT service market is expected to grow at CAGR 6.3% from 2017-2022. US has maximum market share for IT service industry (Refer Exhibit-4). Acquisition of established start-ups helps a company to increase market share, develop new business opportunity and increase product extension lines. Continuous improvement in current technology can improve customer satisfaction rating. Forecast technology change to sustain in the market. Focus on talent development programs to provide cutting edge technology. Diversify talent in terms of geography and gender. Focussed on customer-centricity to align organizational structure as per customer needs. Build a network with global law firms in which the company operates in. Increase investment in cyber-security, threat detection and prevention. Re-skilling of the employee to adopt technology change

Threat

Changing the political scenarios in US, European countries, and uncertainty in these markets can affect investment in technology which can affect the growth of the company. Visa restriction increases the threat to the transfer of skilled employees to other countries. The rapid change in technology can obsolescent current technology, business model. Global presence increases litigation risk. Litigation can attract media attention and increases risk to reputation. Cyber-attack can be possible on the company’s network which can damage a company’s reputation. Yearly complexity in global regulatory compliance is increasing and noncompliance can damage the reputation and heavy penalties. Company has an attrition rate of 11%. The high attrition rate is the lowest among competitors. An increase in the attrition rate leads to the loss of well-experienced employees, increases the cost of hiring.

Maxi-Maxi Strategies (SO)

The company has a strong performance in terms of revenue which increases financial stability and allocation of capital to invest in new technology. Strategic partnership with a globally leading technology company helps in innovating new technology, valuable network with the client. Collaborative work on problem-solving, product development by bringing different teams.

Mini-Maxi Strategies (WO)

Increase business dependency on technology. Change in technology to meet customer expectations and improve operational efficiency.

Maxi-Mini Strategies (ST)

Diversified talent across the world. Retention rate smallest in IT industry. Strong customer-centricity strategy. Successful adoption of technology change in the business model. Understanding of countries’ legality, proper implementation of policy especially labor policy.

Investment in prevention and detection-based solutions.

Mini-Mini Strategies (WT)

Invest in reskilling employees. Research agreement with prime educational institutes. Student engagement program. Recruit local talent. Build a strong legal network in the global market.

Business Strategy

TCS delivers low-cost Global Service delivery.

BFSI contributes more than 40 percent to consolidated revenues. HYPERLINK ” l “gs.l1fvYlw” t ” 7 Definitely, TCS should reconsider its business strategy for increasing its revenue from other verticals of its business. Market penetration strategy:

TCS has diversified its business on a global scale. It has penetrated its services in the USA, Europe, India, Middle-East and Australia etc. It is providing its services in software products, BPO, ADM, KPO, consultancy services (in BFSI, manufacturing and retail).

Global Strategy

TCS-GNDMTM

It is a global engagement model of TCS which permits its customer to select the sourcing services which complements to their business needs. TCS take a follow-the-sun approach, meaning that no matter where your business is located, it helps you keep it running 24/7, while providing a seamless service across all operations.

GNDM- powers its diverse technical, language and domain-specific competencies to deliver custom, quality solutions faster and in compliance with local regulatory requirements and cultural preferences9.

Global Strategic Partners

TCS’s dedicated partner management, field alliance, business solutions, and infrastructure architect teams nurture relationships to drive efficiencies and predictable outcomes as its customers adopt Cloud, Automation and Agile9.

Strategic Partners

IBM – Global System Integrator Partner

Oracle – Global System Integrator and Global Certified Advantage Partner

Microsoft – Global System Integrator Partner

SAP – Global Consulting Partner

Acquisition Strategy

TCS has taken many companies under its acquisition to achieve proficiency, expertise and market share in the field in which TCS was not earlier or was lacking. TCS has acquired firms that allow it to attain horizontal and vertical integration. This is a perfect example of how a company can use acquisition as its strategy for expansion.

Analyzing Key Success Factors

Technology Related

The customer-centric innovation strategy helps to focus on delivery excellence. Developing in-depth domain expertise. Offer full-service capability, globally distributed delivery model. Partnership with global technology leaders. Develop Co-Innovation Network (COIN) which has 150 ecosystem partners, 2000 startups, and 27 partnerships in academia.

Service-related

Built position as the low-cost value player at scale. High asset turnover ratio for the last five consecutive years which concludes efficient use of the asset. Continuous focus on employee empowerment through training, re-skilling program. A wide range of service (Exhibit-5) offering develops flexibility in the product range.

Marketing-related

The customer-centric model helps to develop a business model for efficient delivery to clients. Renowned brand position in a competitive market.

Skills-related

Focused on talent development, talent acquisition. Re-skilling of the employee. Third-party auditing to ensure quality assurance. Increase spending on Digital technology to develop new products. Asset leveraged solutions help to deliver service quickly.

Organizational capability

LDP program designed for managers. From inception, the company has three CEO and everyone had contributed significantly for the growth of the company. The company business model quickly adopt changes as per shift in technology.

Other types

The company has a brand image in the global market. The company provides learning, career development, safe environment to employees. The company has low debt-to-equity and high liquidity ratios. This easy access to raise capital funds.

Digital enterprise, Eco-sustainability services, Engineering and industrial services, enterprise security and risk management, Business Process Services, Consulting, iON-small and medium businesses, IT services, IT infrastructure services, platform solutions, and Supply Chain Management.

References

  • TCS Annual Financial Reports
  • TCS GRI Corporate Sustainability Report
  • Accenture Annual Financial Reports
  • Accenture Sustainability Report

Cite this essay

Analysis of Internal Strategic Context: SWOT Analysis. (2019, Nov 22). Retrieved from https://studymoose.com/analysis-of-internal-strategic-context-swot-analysis-essay

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