Strategic Management Assignment: Strategic Analysis Report For Infosys

Question

Task: Each student must choose one MNC and develop a max 3.000-word Strategic Report based on the requirements. You are required to develop a Professional Strategic Analysis Report addressing the four specific tasks set out in the strategic management assignmentbrief. Your report should be 3.000 words, excluding Title, Abstract, Table of contents, Bibliography and Appendices.

You are required to develop a comprehensive strategic management analysis of a multinational corporation of your choice. You need to conduct independent research focusing on the key developments inside and outside your case organization. The study should not go back in time beyond 5 years.

ADDRESS THE FOLLOWING TASKS:
Task 1: Strategic Issues
Critically discuss and evaluate the impact of strategic changes in the strategic position of the SBU of your choice by analyzing the external and internal environment (including changes in organizational resources, competences, capabilities, leadership, culture and other internal aspects) of the case study organization during the period identified for your research.

Task 2: Three Level of Strategy Analysis
Critically evaluate how well the organization responded to the external and internal challenges over the period concerned. Part of your critical reflection and evaluation could be a discussion of whether the strategy of your case organization is prescriptive and/or emergent.

This evaluation should include considerations pertaining to the strategy implementation of the organization and an evaluation of its successes and failures. Your considerations should be supported by analysis and evaluation of the key performance indicators for the period studied i.e., from the end of the case study to present.

Task 3: VRIO/VRIN and SAFe
Critically discuss and evaluate the basis and sustainability of the competitive advantage of your case organization. You are to use a range of theoretical frameworks to develop a critical discussion about the basis of the competitive advantage of the case organization and how it changed over the period studied. Students are also to conclude how sustainable the competitive advantage of the case organization going forward.

Task 4: Recommendations
You are required to thoroughly develop a range of strategic options for the organization to ensure its longterm success. This task needs to be specific and relevant to the organizational context studied. Predict the results and be convincing in developing a clear success path.

Answer

Introduction
The present strategic management assignment has been prepared on the business case scenario of Infosys which is an Indian international IT company engaged in providing business consulting, outsourcing, and information technology services.It was established in the year 1981 in Pune and is headquartered in Bangalore. It is considered as one of the leading IT Company across the world. In spite of such growth and brand image, company has confronted several issues such as corporate governance problem, whistleblower hit, investigation by US Securities and Exchange Commission, and some others. In this aspect, present study provides detailed analysis of strategic issues faced by company by applying PESTLE framework, Porter’s five forces model, and SWOT analysis. Subsequent to this, three level of strategic analysis of the Infosys is discussed, by which company’s current strategies for address the issues can be ascertained. At last, result analysis is performed by applying VRIO and SAF model.

Critical analysis
Analysis of the strategic issues and opportunities
In order to build robust and effective strategy, it is essential to understand the strategic position Infosys faces itself. Following analysis reflects how internal and external factors creates impact on company’s strategies -

Porter’s five forces framework
Rivalry among firms (High): The IT sector is featured through significant competition for traditional IT services, data-center services, network management services etc. assisting therefore to commoditization (Meena, Shrotryia, and Singh, 2021). There are a number of companies in the sector providing identical services and it is very typical for Infosys to differentiate on the basis of such services. Currently, younger rivals are grasping away agreements with newer technologies, and clients are shifting away from the paid by hours outsourcing work in which Infosys is specialized in. Therefore, it can be asserted that, rivalries among firms are very high that creates significant threat to Infosys.

Bargaining power of customers (High): For traditional IT services, bargaining power of the purchaser is high and it creates pressure on prices of goods. The purchaser, having worked with multinational IT providers and Indian ones is greatly the price setter and has negated the offshore benefits by mature procurement and international delivery. Bargaining power of suppliers (low): It is significantly less and since there is existence of high-standardization, there is lesser scope of suppliers having any power.

Threats of new entrants (Moderate): There is high cost of entry in the information technology industry. This demonstrates business requires a significant amount of capital, and therefore the threats of new entrants are low (Mahajan, Gandhi, and Katyayan, 2019).

Threat of substitutes (Moderate): There is not significant substitute to IT services apart from the internal IT divisions that have lost power over the years.
On the basis of above analysis, it can be said that, the information technology sector, in which Infosys competes, has in majority high forces, suggesting that the sector is not very attractive and generates lower return on investment. It is essential for Infosys to make changes it its strategies by which it can achieve growth and success in the subsequent period.

PESTLE analysis
Political factor: In the year 2016, UK has voted for leaving EU, termed as Brexit that assisted in shockwaves in all over the world. In the financial year 2020, Infosys generated more than 24% revenue from Europe and Brexit has created uncertainty in the political and business environment affecting the IT business. Further, changes in visa policies by government would also have significant impact on company as its business model is dependent on outsourcing.

Economic factor: Since, company is running business at international level; therefore it is affected by economic uncertainties of the global environment. Thepressure of pricing on the IT services, variation in the currency exchange rate, high wage pressure, and sudden enhancement in tax could create impact on profitability of Infosys to a significant extent (Leavy, 2021).

Social factor: Recently, the negative media coverage of the policies and practices of Infosys has negative impact on the reputation of company. The response to the media allegation could divert the attention of investor and shareholder’s interest. In order to address this issue, Infosys has introduced several human welfare programs.
Technological factors: The Indian based IT Company has excellent technological infrastructure providing exciting opportunities for national and international professionals. The technology employment observes a significant growth over the last few years in all over world (Singh, and Kataria, 2021). With the altering technology and innovation trends, Infosys is maintaining its pace through starting new tech centers such as the Indiana tech center and innovation hub in the US.
Legal element: Local as well as foreign rules and regulations could create impact on business operations at a greater extent. The offshore outsourcing through the IT firms as Infosys is achieving higher political attention in nations like United States in which new rules and regulations by regulatory authorities could restrict the operations. For example, the United States Securities and Exchange Commission has initiated an examination on the complaints made by whistle blower against the company arguing malfeasance in accounting (Trouble at Infosys: What we know so far, 2019).

Environmental elements: Infosys is putting efforts to be a sustainable incorporation by up to mark strategies responding the innovation, automation, and education. It is also making a strong partnership with the world prominent environmental consultancy as ERM for offering the innovative solutions for health and safety.

Internal analysis of company

Table 1 SWOT analysis of Infosys

Three levels of Strategic analysis of the company
Critical success factor
With the help of critical success factors, company can identify the consumer’s requirements and recognize which elements are critical to such market segment. The critical success factor of IT industry is demonstrated by innovation, consumer satisfaction, transparency, integrity ethics, and some others. In case of Infosys, critical success factor of the company are openness, transparency, management, talented workforce, honest practices, and proactive. However, it has been noted that, company is not transparent as it refused to make the Gibson, Dunn & Crutcher report public on the acquisition of Panaya and only put summary of the report in the public domain.

Value chain analysis
Value chain is referred as set of activities that is carried out by company to build value for its consumers. By application of Porter’s value chain model, company could investigate all of their activities, and observe the manner in which they are connected.

Figure 1 Value chain model

The Infosys’s most significant activities in the value chain consist of firm infrastructure, technology development, marketing and sales, and after sales services. In this aspect, firm infrastructure support activities at Infosys include quality management, general management, legal service, and finance and accounting (Lokuge et al. 2020). This activity support the entire activities of value chain by the scope varies given that the company is a diversified organization even within the industry. For instance, the finance and planning at Infosys is managed at the corporate level while quality management, accounting and finance are managed at the business unit level.

Corporate strategy
The main strategic goal of the company is to create sustainable and resilient entity that remains relevant to the planning of their client, while making growth opportunities for employees, producing profitable returns for investors and participating to the communities in which it is running its business activities. Recently, company has introduced integrated cloud offering, Infosys Cobalt, combining together more than 14000 cloud assets, more than two hundred solution blueprints and an array of networkassociation (Annual Report, 2021).

Business strategy
The primary aim of the Infosys is to start business into more and more distinct sectors. Therefore, it has implemented penetration pricing strategy that reflects company provides services at lesser prices while confirming the quality and precision of services. Because of the decreased costs, company could curtail its prices and enhance competitiveness. Moreover, company has implemented a client-focused strategy for achieving growth. Instead of emphasizing on several small companies, it emphasizes on restricted number of large entities in all over world. In order to satisfying the requirement of clients, company focuses on custom built software (Taluka, and Verma, 2018). For enhancement of business from existing and new clients, company has emphasized on increasing the nature and scope of engagement for the present clients through enhancing the size and nature of the project and accelerating the breadth of its service providing.

Operational strategy
Company’s operational strategies are proven to be in accordance with the corporate level and business level. In the year 2021, company added 0.86million sq.ft. of physicalinfrastructure space. Further, for strengthening of its digital service capabilities, industry expertise, and expansion of geographical footprints, it has also entered into systematic merger and acquisition approach with three companies such as GuideVision, Kaleidoscope Animations, Inc, and Beringer Commerce Inc. and Beringer Capital Digital Group Inc. moreover, company is continuously making investment in research and development to support development of product, in the year 2021, it has invested 521 crore for R&D division (Annual Report, 2021).

Result analysis
VRIO analysis
VRIO analysis of the Infosys helps in understanding of the resources, value proposition, competitive edge, and its value in the industry. By the help of VRIO analysis, company’s valuable, rare, imitable, and organized resources can be recognized. Valuable: The resources applied by Infosys business are valuable for the organization, which consists of finance, human resources, management of operations, and experts of marketing. These are some of the crucial significant factors for analysis of the competitive advantage (Subramanian, 2019).

Rare: It includes resources that are unique for Infosys only and it could not be available to its rivals. In this aspect, some of the rare resources of company include network flexibility of supply chain, leadership team, market position, and some others.

Imitation: The imitation procedure is expensive for the competitors of company. It could be performed only through two mechanisms such as duplication of items that is produced and manufactured by Infosys and introduction of the replacement of items. This enhances the threat of interference to the present structure of the market. Organized: This element of the VRIO analysis considers with the compatibility of the company to place in the market making efficient usage of its valuable resources that are very typical to imitate (Maria, 2019). Commonly, the development of management is wholly based on the execution technique of company. Thus, this polishes the capabilities of the organization by time based decision taken by the entity for the advancement of its tactical capitals.

Table 2 VRIO analysis of Infosys

On the basis of above VRIO analysis, it can be said that, Infosys is gaining sustained competitive advantages from market position, brand awareness, financial resources and leadership team. It can be said that, company’s financial resources are key strategic ability and important factor for achieving the sustained competitive advantage. These resources permit the organization stability as well as flexibility by which external threats could be addressed. Company’s leadership team as well as brand awareness offers competitive advantages to it. It is capable to attract and retain top talent within organization by effective leadership.

SAF analysis
SAFanalysis assists towards whether or not the strategy would have successful results –
Suitability:It can be said that, strategies would definitely have successful outcome. The particular cause for such aspect is that, company is continuously focused towards innovation and unique ideas. Moreover, by making investment in research and development division it would provide high consumer satisfaction, and consequently expand its market share in all over the world. In addition to this, company is responding on its external threats such as high competition, dependency on outsourcing, by entering into merger and acquisition with distinct companies (Chavan, and Breyer, 2020).

Acceptability: The strategies implemented by company are acceptable by entire stakeholders of company. The reason behind the same is that, consumer would highly satisfied by innovative features and shareholders of company would get higher return because of expansion of business in distinct region and countries as well.For example, company has implemented penetrated pricing strategy, which enables it to reduce the prices and accelerates its competitiveness in market (Basarkar, 2019). Therefore, it can be said that, the three level strategies will leads towards providing successful outcomes aiding entire stakeholders of the organization.

Feasibility: It is feasible for the company to implement all strategies as it possesses adequate financial and human resources. By the application of same, company can achieve sustained competitive advantages. Moreover, Infosys implemented strategies by considering the dynamic rules and regulations of countries as well as future trend of the industry in which it is running its business activities.

Recommendations
The objective of company is to split its revenue stream in more equal manner. This demands growth particularly in the area of innovation. In the optimization space, the beginning of cloud computing would also signify significant variation in the manner clients consumers technology of Infosys. Further, it is recommended that, company should split its revenue by which US accounts for approximately 40%, Europe accounts for 40%, and 20% would be accounted by rest of the world. At the present, company is generating major revenue only from US market such as 65%, Europe a fast increasing 21%, and the rest of world 14% (Crainer, 2012). Since, technology is persistently commoditizes, therefore it is suggested that, company should repositioned itself by giving more emphasis on intellectual property as well as solution development and on reusing technologies. It can be said that, Infosys should continuously emphasis on development of its strategic capabilities by which sustained competitive advantages can be availed. Therefore, entering into merger and acquisition andinvestment in research and development to providing technological invention and differentiate itself in the industry. In addition to this, it is recommended that, company should give adequate emphasis on corporate governance policies for recovering of brand image as well as trust of shareholders.

Conclusion
On the basis of aforementioned analysis, it can be concluded that,Infosys is confronting several issues inclusive of corporate governance aspect, investigation by regulatory authorities, lack of trust among public, and some others, which leads towards damaging brand image of company. In order to address such issues company has implemented several strategies and planning that would benefit entire stakeholders of company. Further, it has been noticed that, Infosys possesses adequate financial and non-financial resources, by which such strategies would deliver successful outcomes.

References
Annual Report, 2021. (Pdf). Available through [Accessed on 12th February 2022] Basarkar, S., 2019. Strategic Brand Management for B2B Markets: A Road Map for Organizational Transformation. South Asian Journal of Management, 26(2), pp.210-213.https://www.proquest.com/docview/2283949179/fulltextPDF/73B0FF55059046CFPQ/1accountid=30552 Bhambhani, G., Sainy, M. and Gupta, R., 2018. An Empirical Research on Impact of HRD Climate on Infosys Pune. Journal of Technology Management for Growing Economies, 9(1), pp.7-21. https://tmg.chitkara.edu.in/index.php/tmge/article/view/9/5 Chavan, M. and Breyer, Y.A., 2020. Industry-Academia Partnerships for Sustainability: Project Genesis in India. In Industry and Higher Education (pp. 189-205). Springer, Singapore.https://link.springer.com/chapter/10.1007/978-981-15-0874-5_9 Crainer, S. 2012. What next for Infosys. (Online). Available through [Accessed on 12th February 2022]

Leavy, B., 2021. Designed to evolve: digital transformation the Infosys way. Strategy & Leadership.https://www.emerald.com/insight/content/doi/10.1108/SL-05-2021-0051/full/htmlutm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest

Lokuge, S., Sedera, D., Ariyachandra, T., Kumar, S. and Ravi, V., 2020. The next wave of CRM innovation: Implications for research, teaching, and practice. Communications of the Association for Information Systems, 46(1), p.23.https://aisel.aisnet.org/cais/vol46/iss1/23/

Mahajan, M., Gandhi, S. and Katyayan, Y., 2019. Infosys: International Business Practices. Asian Journal of Management, 10(2), pp.128-134.https://ajmjournal.com/AbstractView.aspxPID=2019-10-2-8
Maria, A., 2019. HR Analytics: Challenges and prospects of indian IT Sector. International Journal of Management, IT and Engineering, 9(7), pp.404-415.https://www.indianjournals.com/ijor.aspxtarget=ijor:ijmie&volume=9&issue=7&article=032
Meena, M.K., Shrotryia, V.K. and Singh, A.K., 2021. Do Human Resources have more Value than the Cost incurred on them by the Organisation An Empirical Analysis of Infosys Ltd. using Contribution-Based Model. Strategic management assignmentRamanujan International Journal of Business and Research, 6, pp.73-86.https://rijbr.in/index.php/1/article/view/354 Singh, P. and Kataria, P., 2021. Leadership in Infosys Technologies–A Case Study Report. Saudi J Bus Manag Stud, 6(6), pp.199-204.https://saudijournals.com/media/articles/SJBMS_66_199-204.pdf

Subramanian, S., 2019. The Emergence of Principal–Agent–Principal Model in India: The Case of Infosys Ltd. IIM Kozhikode Society & Management Review, 8(2), pp.120-130.https://journals.sagepub.com/doi/abs/10.1177/2277975219836536 Taluka, S. and Verma, S., 2018. Emerging Dimension of Board Gender Diversity in Corporate Governance-An Analysis. International Journal of Emerging Multidisciplinary Research, 2(2), pp.1-5.https://www.researchgate.net/publication/352026059_Board_Gender_Diversity_A_Review_of_the_Literature

Trouble at Infosys: What we know so far, 2019. (Online). Available through [Accessed on 12th February 2022]