Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

TCS CASE PRESENTATION

No description
by

Rupert Rink

on 15 November 2015

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of TCS CASE PRESENTATION

Blanca Elosua, Rupert Rink, Amjad Hassan, Maria Fujkova & Morten Mowinckel
ISMiP: Group 10
STRUCTURE
Introduction to
Tata Consultancy Services (TCS)

Our Strategic Process

Strategic Diamond

Connection to Articles
OUR STRATEGY PROCESS:
STRATEGIC CHALLEGE/VISION
COMPANY ANALYSIS
ENVIRONMENTAL ANALYSIS
STRATEGIC OPTIONS
IMPLEMENTATION
COMPETITIVE ADVANTAGE
INTRODUCTION TO TCS
TCS is a multinational IT services, business solutions & outsourcing services organization

TCS is part of the Tata Group, one of India's largest industrial conglomerates

TCS has over 254,000 of the world's best-trained IT consultants in 44 countries
STRATEGIC DIAMOND
ARENAS
VEHICLES
STAGING
DIFFERENTIATORS
ECONOMIC LOGIC
CONNECTION TO ARTICLES
A
a
a
"By 2010 we want to become a $10 Billion-a-year company producing 25% margins" - S. Mahalingam (Chief Financial Officer, TCS)

"...transforming ourselves from a totally Indian company to a totally global company without forgoing labour cost arbitrage" - S. Mahalingam
Porters 5 forces
Key success factors
Changes in business environment may effect performance
PORTER'S 5 FORCES
NEW ENTRANTS
CUSTOMERS
SUBSTITUTES
SUPPLIERS
COMPETITIVE
RIVALRY
INCUMBENTS AREA
Measures the ability of companies to enter your market
Few can compete globally

Reputation required
Low barriers to entry

Small sunk costs

Requires high human & intellectual capital
This measures the factors effecting how easy it is for buyers to drive prices down.
This assesses how easy it is for suppliers to drive up prices
Main Raw material of TCS is their employees or consultants

Higher the number of consulting agencies = the higher the supplier power

Require consultants of high excellence to maintain their reputation for quality

Supply of highly-skilled consultants falls below market demand

Suppliers have high bargaining power

Low cost of switching suppliers
Substitute products are produced in a different industry but crucially satisfy the same customer need
This measures the number and capability of your competitors. If your company has high competitive advantage then you will have high rivalry power.
SWOT MATRIX
STRENGTHS
Broad services portfolio

Significant market position

Extensive global reach

Strong financial performance

Innovation labs
WEAKNESSES
Exposure to finiancial services market

Lack of scale in consulting operations

Marketing Skills

Business Expertise
OPPORTUNITIES
THREATS
Focus on SMB segment
Growth in worldwide IT services
Focus on high end business and IT consulting
Opportunities in emerging markets
Cloud Computing Market
Growing Healthcare IT Industry
Increasing employee costs
Intense Competition
Consolidation in the end markets
Exchange Rate Fluctuation
Increasing Visa Restrictions
Increased Cost Labour Arbitrage Competition
Jamsetji Nusserwanji Tata, founder of the Tata Group in 1868
Porter's 5 Forces


Changes in Business Environment
CHANGES IN BUSINESS ENVIRONMENT
Took advantage of a change in legislation in 2002
– SOX Act section 201

Sustaining competitive advantage in a changing environment
Many consulting firms to choose from

TCS must develop sufficient expertise thus making outsourcing a compelling value proposition

However, buyers require special customization

A need to move the purchase decision away from price

Huge decline in IT expenditure


Internal stategic development departments
Price pressures from existing competitors

Low switching costs - therefore high price competition
Low exit barriers

Mobile Apps are intensifying competition
Strong Resource Pool

Recruits employees locally

Specialised services customized to client's needs

Global Reach

Broad Service Portfolio
Q 1: Partner with packaged software makers such as Oracle and SAP

Tailor better to customer needs
Create sustainable value to customers
Competitive advantage over competition
Q2: Price Leaderhip

Not sustainable in long-term
Imitation ↑
Technological improvements make the low price advantage outdated
Premium Services

market share ↑, product portfolio
importance of quality
Q3: Incentives in absence of stock options

Cash incentives
Rewarded for company performance above industry benchmark/average.
Non-financial benefits
Q4: Organic growth

Organizational knowledge and learning↑
Spread the investment over time
No availability constrains

Limitations of own capabilities
Q5: Not only ethnocentric approach in HR

Global company need global employees
Acquisitions

Extension to new markets, to build global presence
Consolidate the competition
Capabilities↑

Difficulty to find a strategic and organizational fit
Risk of failure↑
Hostile
Technical excellence, reputation & pioneering spirit

Innovation of customized software migration solutions

Ranging from Price Leadership to Premium Prices

Best trained IT consultants in the world
Organic Growth


Alliance & Patnership


Acquisitions
RESULTS
Q1: Partnership with package software makers

Q2: Price leadership segments and
premium services

Q3: Implementation of cash incentives

Q4: Continued focus - organic growth
Secondary focus - acquisition

Q5: Global company need global employees
Q1: Should TCS partner with packaged software makers such as Oracle & SAP or compete with them?

Q2: Should TCS continue price leadership or move more aggressively into premium services such as management consulting and complete business solution delivery?

Q3: In the absence of stock options, what kind of incentives should TCS put in place to account for geographic cost of living and resource competition?

Q4: Should TCS grow organically or through acquisitions?

Q5: Should TCS recruit and promote executives from countries where the company has a significant amount of business?
CONFIRM

The internationalization process of the firm (1977)
Uppsala model : step-by-step, incremental internalization
TCS export services; association with local firms, leading to acquisition in some cases; hire local consultants.

Institutional differences and the development of entrepreneurial ventures (2009)
Institutional framework:
Regulatory- e.g. government control of equipment purchasing
Normative-e.g. the break with Burroughs
Cognitive

CONTRADICT

The internalization of born globals (1977)
Born globals - export >75% of sales within first 2 years
TCS was founded in 1968, 1. export activity in 1974
TCS challenege - transfer into a totally global company

Wide range of IT services & unique IT software

MNEs, SMEs

Global

TCS BaNCS, TCS MasterCraft & TCS Technology Products

Technology Labs, Domain Labs & Academic Labs
1968 - TCS Inception

1970 - Burroughs Alliance

1980s- Competing with Western consultencies, Software
Migration Factory

1990s- TCS answers the client server call, TCS addresses the Year
2000 Problem, TCS misses Internet Revolution

2000s- TCS catches the cost-cutting & Sarbanes-Oxley compliance
wave, $10 Billion revenue target,
Cost Labour Arbitrage

Increasing employment

Innovative solutions at premium prices

Expansion of employment pool
Full transcript