Infosys is one of the leading information technology service organization of the world, having its operations dispersed in many region across the world. The company was founded by N.R Narayan Murthy and six of his friends in the year 1981, and currently the annual revenue of this company is accounting to approximately 5 billion USD. The company could achieve a leading position in the IT industry, due to its strategic decision of concentrating its efforts in capturing the market of United States from the beginning, instead of the Indian market, because India did not have a developed software market at that time. However, since Infosys is experiencing certain problems currently specifically in relation to its global delivery model, due many politically reforms in the United States, the company is undertaking certain strategic decisions to assist the U.S division of Infosys to gain and sustain a competitive advantage in the IT market.
While developing any strategy analysis of the external environment is important to understand the company’s competitive position in the market (Gurel, 2017). The evaluation of external environment consist of identifying the opportunities and threats of this company.
To gain a competitive advantage in the market and sustain competition, some opportunities available to this company are increased scope of product innovation, expansion of business to other service domains like transportation, infrastructure, etc. other than BFSI sector (Mahajan, Gandhi & Katyayan, 2019). The company also has an opportunity of focusing on the emerging markets and increase its market capitalization. Also, the growth of the domestic demand for IT and increasing demand for cloud-based business solutions can prove to be an opportunity for this company. Infosys also is facing some major challenges like from the global economic slowdown due to which spending on IT has reduced significantly, and has impacted the entire IT industry majorly. Also, the current backlash in United States, against outsourcing is posing a major challenge to Infosys and affecting its global service delivery model, of which outsourcing technology work is a key component (Mahajan, Gandhi & Katyayan, 2019). The company is also witnessing challenging times due to increasing competition in the IT industry from its major competitors like IBM, Accenture, Capgemini, Oracle, (Mahajan, Gandhi & Katyayan, 2019)etc.
Along, with evaluation of external market, internal market analysis is essential and involves identifying the strengths and weaknesses of the company (Gurel, 2017). Infosys is a big name in the world IT industry in the market, and its brand image is one of its major strength. Other strengths of this company include its strong product profile of complete business solutions like consulting services, services in IT and software, and business process management. The company is also benefitted from cost advantage, as most of its development centres being located in the domestic country of India, high-quality technical talent is available lesser cost (Mahajan, Gandhi & Katyayan, 2019). The many strategic associations of Infosys with many giant technology players of the market like Microsoft, HP, Amazon, etc. has proved to be a strength of this company. One of significant weakness of Infosys is its dependence and concentration of its operation in limited markets of United States, and on the BFSI sector, and is vulnerable to instability. Infosys has failed to cover major emerging markets which are spending heavily of IT development, and thus in lacking to gain a competitive advantage and experiencing lower revenue growth. Also, the high attrition rate at this company, and rising salary expenses is affecting the cost advantage (Mahajan, Gandhi & Katyayan, 2019).
Gurel, E. (2017). SWOT analysis: A theoretical review. The Journal of International Social Research, 10(51), 995-1006.
Mahajan, M., Gandhi, S. & Katyayan, Y. (2019). Infosys: International business practices. Asian Journal of Management, 10(2), 128-134.
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