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IT INDUSTRY
Keerthi (305)Nithilesh (310)
Debashree (312)
Shane(314)
Giridhar (315)Hareesh reddy (319)
Ekambar(320)
Surya Theja (331)
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INTRODUCTION
Today the software industry has become the backbone of companies around
the world.
IT industry not only providing employment, but it is well as creating an
opportunity for innovation.
India is now the leading country in providing IT Enabled Services in the
world.
65% of the global market in offshore IT and 46% of the ITES market.
Information technology is the use of computers and software to manage
information.
In some companies, this is referred to as Management Information Services
(or MIS) or simply as Information Services (or IS).
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CORE BUSINESSACTIVITIES
IT services
Enterprise solutions
Consulting
Business process outsourcing
Business intelligence and performance management
Engineering and industrial services
IT and business solutions for SMEs
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IT INDUSTRY IN INDIA
The industry was begun by Bombay-based conglomerates which
entered the business by supplying global IT firms located overseas
with programmers.
India's IT Services industry was born in Mumbai in 1967 with the
establishment of Tata Group in partnership with Burroughs.
The Indian Information Technology industry accounts for a 5.19% of
the country's GDP and export earnings as of 2009, while providing
employment to a significant number of its tertiary sector workforce.
More than 2.5 million people are employed in the sector either directly
or indirectly, making it one of the biggest job creators in India and a
mainstay of the national economy
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India's outsourcing industry is expected to increase to US$225
billion by 2020.
The most prominent IT hub is Bangalore.
The other emerging destinations are Chennai, Hyderabad,
Coimbatore, Kolkata, Kochi, Pu.ne, Mumbai, Ahmadabad.
NCR
India's growing stature in the Information Age enabled it to
form close ties with both the United States of America and
the European Union.
Today, Bangalore is known as the Silicon Valley of India and
contributes 33% of Indian IT Exports.
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CURRENTPOSITIONOF IT SECTORIN INDIA
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TECHNOLOGY USED
Programming Languages : JAVA , C++
Data base management : DBMS , RDBMS ,
ORACLE , SAP
Operating systems : Windows, Linux, Solaris
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India's IT industry (USD bn)[16]Particulars FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
IT Services 10.4 13.5 17.8 23.5 31.0
Exports 7.3 10.0 13.13 18.0 23.1
- Domestic 3.1 3.5 4.5 5.5 7.9
ITES-BPO 3.4 5.2 7.2 9.5 12.5
- Exports 3.1 4.6 6.3 8.4 10.9
- Domestic 0.3 0.6 0.9 1.1 1.6
Engineering
services, R&D
and Software
products
2.9 3.9 5.3 6.5 8.6
- Exports 2.5 3.1 4.0 4.9 6.4
- Domestic 0.4 0.7 1.3 1.6 2.4
Hardware 5.0 5.9 7.0 8.5 12.0
- Exports 0.5 0.5 0.6 0.5 0.5
- Domestic 4.4 5.1 6.5 8.0 11.5
Total IT
industry
(includinghardware)
21.6 28.4 37.4 48.0 64.
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TOP 5 COMPANIES
IBM
ACCENTURE
ORACLE
POLARIS
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IBM
International Business Machines nicknamed Big Blue
Founder - Thomas J. Watson
Headquarters in Armonk, New York, United States
IBM manufactures and sells computer hardware and software, and
offers infrastructure services, hosting services, and consulting services in
areas ranging from mainframe computers to nanotechnology.
CEO - Samuel J Palmisano
Has 388,000 employees
Holds more patents than any other U.S. based technology company
Has eight research laboratories worldwide
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Revenue - US$ 99.870 billion
Operating income - US$ 19.273 billion
Net income - US$ 14.833 billion
IBM was among the first corporations to provide group life insurance(1934), survivor benefits (1935) and paid vacations (1937).
In 1932 IBM created an Education Department to oversee training for
employees, which oversaw the completion of the IBM Schoolhouse at
Endicott in 1933.
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SWOT ANALYSIS
Strengths The Advanced business action management and innovative culture of IBM is one of its
strengths.
The successful strategic outsourcing, mergers and acquisitions of IBM are its strengths.
High economical consummation centre and flexible marketing management of the company is
the reason for its success.
The creative service that International Business Machines provides is its strength. It is handling
almost 95% of business tasks of top 1000 companies all over the world. The company have some of the worlds fastest important frame and many subverted
technologies like: speech recognition software, chromatic gene, supercomputers etc. Through
such extraordinary and innovative technologies IBM is able to wage some of the prizewinning
back hand facilities.
The most recent merge of IBM is with the Lenovo; Lenovo is providing the outer element
profession and IBM providing all of its latest chip technology can result in greater success ofthe company.
Today, IBM has entered a wide range of fields including Business continuity, snap services,
End user services, integrated subject services, IT strategy and architecture services etc. The
good will of the company along with its huge base of loyal customers is one of its greatest
strengths.
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Weaknesses At International Business Machines there are high costs involved in the value chain and also the
company is dealing with some acquisition issues.
Since, IBM spends quite a lot on its research and development where as the implementation of
new processes is a little difficult. This is also because there are very few suppliers in the value
chain o IBM and it can act as a loophole.
IBM has a good position in the market but needs to change its strategies with the change in
market. This also causes the cost to the company to be greater as compared to other software
and hardware dealers.Opportunities The rising demand for wireless and internet services provides the company new opportunities
to explore.
There are many possible acquisitions and merger opportunities that the company can seize andincrease its market share greatly.
By making its distribution channels stronger and increasing its retail outlets and suppliers
canresult in more profits for the company.
The rising energy prices and cost makes running and operations of the business difficult. IBM
has addressed by making its strategy related to environment. With its green strategy it is able to
save up to forty percent of energy costs.
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THREATS
There are many competitors like HP, Dell, Accenture and Microsoft etc
that have captured large segments of the market.
The market has perfect competition state and switching cost is low for
the customers.
At IBM, there is a constant high threat of new substitutes as well asservice switching.
The technology market is very flexible, entry is easy and even
small companies like Compaq can reduce the market share of IBM
greatly.
The global recession is a large threat for IBM. The company prices are
higher as compared to other service providers in the same industry
therefore; the IBM needs to take effective cost reduction strategies to
deal with the unstable market conditions.
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MISSION
At IBM, we strive to lead in the invention, development and manufacture
of the industry's most advanced information technologies, including
computer systems, software, storage systems and microelectronics.
We translate these advanced technologies into value for our customers
through our professional solutions, services and consulting businesses
worldwide.
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TOP 5 COMPANIESIN INDIA
Tcs
Wipro
Infosys
HCL Tech Mahindra
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TCS Established in 1968
Headquarters - Mumbai, India.
First IT Company to cross US$ 3 Billion mark in revenues
Over 83,500 employees from 60 nationalities
Major Business areas: BFSI, Insurance, Telecom, Transportation,
Healthcare etc.
It first started as the Tata Computer Center
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SERVICESOFFEREDBYTCS
IT services
IT infrastructure services
Enterprise solutions
Consulting
Business process outsourcing
Business intelligence and performancemanagement
Engineering and industrial services IT and business solutions for SMEs
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MARKET PENETRATION STRATEGY:
Current Markets: USA and Europe
Current Products: BPO, KPO, consultancy services
(in BFSI, manufacturing and retail) and softwareproducts (financial products).
Recommendations: As most large clients in US and
Europe are cutting costs, TCS needs to be moreaggressive on cost and quality front.
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MARKET DEVELOPMENT STRATEGY:
New/Emerging Markets: India, Middle-east andAustralia
Current Products: BPO, KPO, consultancyservices (in BFSI, manufacturing and retail) andsoftware products (financial products).
Recommendation: Since these are fastdeveloping IT market, TCS needs a paradigmshift in focus from US and EU markets to thesemarkets.
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PRODUCT DEVELOPMENT STRATEGY
Current Market:USA and Europe
New Product: Consultancy and package
implementation services in relatively growingsectors esp. life sciences & healthcare, aviationsector, and KPO services.
Recommendation: Concentrate on buildingexpertise in these domains by strategic
acquisitions.
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BCGMATRIX
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Strength
Extensive global reach
Strong financialperformance Employee management
OpportunitiesFocus on SMB segment Growth in worldwide IT services Focus on high end business andIT consulting Expanding operations incountries like China
ThreatsIncreasing employee costsIntense competition from foreign firms like
Accenture, IBM etc.Consolidation in the end markets
Rupee appreciationIncreased competition from low-wagecountries like China, Indonesia etc.
Weaknesses
Significant exposure to
financial services market
Lack of scale in consulting
operations
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FINANCIALPERFORMANCE
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SUGGESTIONS
Expect to see the landscape continue to consolidate. Clients will seek
to cut costs and focus on fewer provider relationships as the economy
worsens. TCS should take this opportunity to improve your market
positioning. Ensure marketing articulates your value proposition to all
stakeholders concerned. In a recession, marketing can work as a
differentiator.
TCS need to create specific value propositions aimed directly at the
relevant stakeholdersand in the new tech ecosystem, these relevant
stakeholders must include business executives, not just IT personnel
Dont be influenced solely by short-term shareholder pressure.
changes in industry dynamics that will emerge
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TCS must provide diverse services to refrain from being over-
dependent
Provide more high-end services in value chain
There is a move required from ADM (Application Development and
maintenance) to value added services, BPO to Consulting and
Package Implementation, etc.
TCS should shift focus from Low cost advantage to high quality
services commanding a premium being the pioneer in the industry
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