HIGH PRIORITY MARKET - IT
PORTERS FIVE FORCES ANALYSIS
Competitive Rivalry
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Intense competitive rivalry exists due to low switching costs Most of the bigger Indian firms offer same services and there is little product differentiation
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Threat of New Entrants ( Medium ) |
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Substitute Products ( Medium ) |
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Easy entry as the capital required is low Large players , however , toughen prospects of small and medium players to win large deals |
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Threat is medium as new centres , such as Philippines and China , are fast gaining ground among investors due to their low cost advantages |
Bargaining Power of Suppliers ( Low ) Bargaining Power of Customers ( High )
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Bargaining power of suppliers is less as most of their businesses come from the same geographies Price taker rather than price maker |
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Bargaining power is high as many IT firms fight for a similar project Firms are mostly dependent on same geography , which increases customer power |
STRATEGIES ADOPTED
Expanding in Tier II & III cities and externally
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Companies are expanding their business to Tier II & III cities to have low cost advantage
Infosys expanded to Indore and Mohali in FY14 to increase its penetration across India
Companies are expanding their business towards emerging economies of East Europe and Latin American countries
Movement to SMAC & digital space
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Social Computing , Mobility , Analytics and Cloud ( SMAC ) is taking significant leaps
Companies are getting into this field by offering big data services , which provides clients better insights for future cases
Product and Pricing differentiation
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Most of the IT companies have been offering similar products and services to their clients
The companies are working towards product differentiation through various other services by branding themselves , e . g . Building Tomorrow ' s Enterprise by Infosys
Indian IT firms have started to adopt pricing strategies to compete with Global firms like IBM and Accenture
Promotion of R & D
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Companies are now investing a lot in R & D and training employees to create an efficient workforce , enhancing productivity and quality
R & D forms a significant portion of companies ’ expenses , which is critical when margins are in pressure , to promote innovations in the changing landscape
Fast-growing sectors within the BPM domain
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Knowledge services , data analytics , legal services , Business Process as a Service ( BPaaS ), cloud-based services
Spotlight on Indian Electronics 2016 | 179