COMPANY ANALYSIS Tata Consultancy Services Limited is an Indian multinational information technology (IT) services, business solutions and

consulting company headquartered in Mumbai, Maharashtra. TCS operates in 44 countries and has more than 199 offices across the world. It is a subsidiary of the Tata Group and is listed on the Bombay Stock Exchange and the National Stock Exchange of India. It is one of India's most valuable companies. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services comprising Application Development & Maintenance, Business Intelligence, Enterprise Solutions, Assurance Services, Engineering & Industrial Services, Infrastructure Services, Consulting, Asset Leveraged Solutions and Business Process Outsourcing delivered through its unique Global Network Delivery Model (GNDM), recognized as the benchmark of excellence in software development.

The company has domain expertise in a broad set of industries, comprising Banking & Financial Services, Insurance, Telecom, Manufacturing, Retail & Distribution, High Tech, Life Sciences, Healthcare, Transportation, Energy & Utilities, Media & Entertainment and others.

Geographically, TCS operates in all five continents, with North America and Europe constituting the largest markets for our services. The company derives over a fifth of the revenues from emerging markets such as India, Asia-Pacific, Latin America and Middle-East & Africa. TCS was established in 1968 as a division of Tata Sons Ltd. The date of incorporation is January 19, 1995. Following a hugely successful IPO in July 2004, it was listed on the NSE and BSE on August 25, 2004. Offerings: The Company offers a wide range of services which includes -Assurance Services, BI & Performance Management, Business Process Services, Cloud Services, Connected Marketing Solutions, Consulting, Eco-sustainability Services, Engineering & Industrial Services, Enterprise Solutions, iON - Small & Medium Business, IT Infrastructure Services, IT Services, Mobility Products and Services and Platform Solutions.

The software products offered by the firm are-TCS BaNCS, TCS MasterCraft and TCS Technology Products. Awards****

SWOT ANALYSIS Strengths TCS has deep and long lasting customer relationships. Investment in research and development. Focus on improvement of quality and efficiency in service delivery. TCS is capable of attracting and retaining the best talent required for driving business growth. It's highly professionally managed IT consulting and services company under the belt of TATA. Consistent no.1 position for last 10 years. Company has performed consistent year on year with weak economy conditions in the world. Extensive global reach. Strong financial performance.

Weakness Difficult to handle the career development needs of vast number of growing employees. Management difficulties of various subsidiaries including cultural, financial and technological. Threats TCS has to deal with cost pressures. Increasing employment costs and escalation in operating expenses creating pressure on margin. Volatility in economic environment. Currency volatility. Intense competition from across the world.

The governments of North America and Europe are bringing in regulations to make labour movement from India difficult.

Opportunities TCS is the largest Indian IT Services Company in terms of revenues, profits and number of employees. In terms of opportunities, the Company is in the privileged position of being in a growth industry like technology, which is becoming central to the wellbeing of all other industries. TCS can address a larger section of the growing market for technology services. Growth in small and medium business solutions. Growth in world - wide IT services. Strategic acquisitions.

Michael Porters Five Forces In the case of both software outsourcing and BPO, for TCS there are few important suppliers, becauseTCS inputs are standard commodities and there is little opportunity for differentiation on the input side.The four forces that are most problematic are the bargaining power of customers, the threat of newentrants, the threat of substitutes, and the competitive rivalry with existing players. We examine each of these four forces in their turn for both software services outsourcing and BPO.In the early days of the software exporting business, the software vendor market was dominated by afew large global suppliers such as IBM. Indian firms were viewed as too small to matter for obtainingsignificant business. In addition, they competed actively with each other at the low-end. The result wasthat TCS and its Indian peers chose components of the business that were relatively low value-addedand relatively simple to do.TCS also faced a client market that was dominated by the large banks and insurance companies. While itactively sought alliances with larger vendors as a competitive strategy, its most successful strategy wasto directly approach clients and accept the lower rates that its competitive position necessitated.Looking ahead, TCS must continue to work to reduce the bargaining power of customers by trying tomove the purchase decision away from price. This means that TCS must deliver more thanundifferentiated programming by moving up the value chain. Such a movement is difficult in softwareservices because the customers have deep domain expertise and almost invariably wish to retain thetasks grouped under strategic consulting. Moreover, customers understand that if they outsource thestrategic

consulting, then their bargaining power will be reduced. TCS must develop sufficient expertiseso as to make outsourcing these tasks a compelling value proposition. Of course, it is exactly in theserealms that the multinational outsourcing firms such as IBM, Accenture, and EDS are the most ferociouscompetitors.Forging alliances is often viewed as a good strategy to offset clients bargaining power. However,building alliances with firms working in clients locations should be discounted as this would furtherfocus TCS in applications development. On the other hand, the acquisition of a medium-sized Americanfirm with strong client relationships and domain skills could provide an attractive opportunity. Althoughcosts per employee would rise, the rise would be small since labor requirements are lower for highervalue-added work.Meanwhile, the threat of new entrants is declining rapidly as the larger firms have rapidly increasedtheir size, market share, and credibility with customers. However, although firms strive to reduce theirdirect competition through product differentiation, in each market segment there continue to benumerous players. 16A key concern for TCS is competition from existing players as it has generated competition for existingbusiness and created significant pricing pressures. Globally, firms such as EDS have positionedthemselves as capable of undertaking large, turnkey projects in order to differentiate themselves fromcompetitors such as IBM and Accenture that focus on higher value-added work such as consulting. Thissuggests an organically-driven growth strategy for TCS: that TCS continue to do the same kinds of workthat it currently does, but try to capture a greater portion of the value-addition by undertaking largerprojects. Though it has already demonstrated a capability in remote project management, it would berequired to further increase this capability.However, there are some risks to this strategy. TCS large size suggests that it may have alreadymaximized economies to scale in applications development. Adding scope, however, offers the potentialfor large gains since it necessarily involves higher value-added activities. In the early days, this wasdifficult, partly due to the technical difficulty in de-integrating the value-chain beyond themodularization of applications programming. Over the past few years, however, engineering services,systems design, and systems integration work have increasingly been outsourced (within the U.S.),suggesting that, if the skills are at hand, such work could be done in India.Most of the American providers of such services offer domain and software skills. TCS already has thesoftware skills to move into these areas. But domain skills are a challenge. This reflects a general lack of domain expertise outside the financial services sector in India. Put differently, India does not haveglobal-class, nontechnical knowledge in various other industries. As a result it is difficult

to offer the fullpanoply of services a firm would want when it considers outsourcing a software development activity.This may be being rectified as the liberalization of the Indian economy since 1991 has led to thedevelopment of a host of new industry capabilities, such as in insurance. This promises an expansion of domain-specific skills in fields outside the traditional industries but these will develop only gradually.These facts indicate that it will be difficult for TCS as an organization based and staffed primarily in Indiato change its revenue mix through organic growth. Acquiring Indian firms doing higher valueaddedbusiness is a possibility, but there are few such firms in the Indian business environment. Essentially, theconstraint that TCS faces is environmental rather than firm specific. In most sectors, Indian businessconditions are sufficiently dissimilar to overseas client conditions that local domain expertise is of lowrelevance.The threat of substitutes in software services does exist as technology tools to speed coding etc.However, at this time the threat of substitutes seems rather remote.