Tata Consultancy Services: Sustaining Growth Momentum in China 2010 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tata Consultancy Services: Sustaining Growth Momentum in China 2010
In 2002, Tata Consultancy Services (TCS) set up operations in China, following its major client, GE Medical Systems. TCS China operations also supported the software needs of multinational and regional companies expanding in China, while providing the company with a platform to grow its local clientele base. In 2006, TCS announced a new global business initiative which included plans for large-scale operations in China. The aim was to grow its China operations to become TCS' second global delivery centre after India, functioning as its offshore IT outsourcing hub for the Asia Pacific region. In addition, China's growing domestic software market presented attractive opportunities for IT services. TCS shifted its focus to China's financial sector, as many of China's domestic banks were then undergoing a period of major organisational transformation. Given this, in 2007, the company set a target to increase its China-based manpower strength from 800 to 6,000 by 2011. However, the tight supply of IT talent in China was a major challenge and in early 2010 TCS' manpower strength reached 1,100. The company set a new target to quadruple its manpower strength to 5,000 by 2014. Product/service innovation was an essential catalyst to sustain its growth momentum and to maintain a competitive edge in the Chinese market. What steps should the company take to tap the rising demand for outsourcing services while tackling the problems of achieving service excellence in a resource-tight situation?
Authors :: Beng Geok Wee, A. Lee Gilbert, Ivy Buche
Swot Analysis of "Tata Consultancy Services: Sustaining Growth Momentum in China 2010" written by Beng Geok Wee, A. Lee Gilbert, Ivy Buche includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tcs China facing as an external strategic factors. Some of the topics covered in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 case study are - Strategic Management Strategies, IT, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Tata Consultancy Services: Sustaining Growth Momentum in China 2010 casestudy better are - – increasing government debt because of Covid-19 spendings, increasing energy prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, increasing commodity prices,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Tata Consultancy Services: Sustaining Growth Momentum in China 2010
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tcs China, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tcs China operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tata Consultancy Services: Sustaining Growth Momentum in China 2010 can be done for the following purposes –
1. Strategic planning using facts provided in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 case study
2. Improving business portfolio management of Tcs China
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tcs China
Strengths Tata Consultancy Services: Sustaining Growth Momentum in China 2010 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tcs China in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Tcs China in the sector have low bargaining power. Tata Consultancy Services: Sustaining Growth Momentum in China 2010 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tcs China to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Tcs China is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Tcs China is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Tcs China in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Tcs China is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Beng Geok Wee, A. Lee Gilbert, Ivy Buche can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Tcs China are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Tcs China has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tcs China to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Tcs China digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tcs China has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Tcs China has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tcs China has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Tcs China is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Tcs China has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Tcs China has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Tcs China has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Tata Consultancy Services: Sustaining Growth Momentum in China 2010 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tata Consultancy Services: Sustaining Growth Momentum in China 2010 are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010, is just above the industry average. Tcs China needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Beng Geok Wee, A. Lee Gilbert, Ivy Buche suggests that, Tcs China is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Tcs China, firm in the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010, in the dynamic environment Tcs China has struggled to respond to the nimble upstart competition. Tcs China has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tcs China 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tata Consultancy Services: Sustaining Growth Momentum in China 2010 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Tcs China has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Tcs China needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Tcs China supply chain. Even after few cautionary changes mentioned in the HBR case study - Tata Consultancy Services: Sustaining Growth Momentum in China 2010, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tcs China vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Tcs China has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Tata Consultancy Services: Sustaining Growth Momentum in China 2010 can leverage the sales team experience to cultivate customer relationships as Tcs China is planning to shift buying processes online.
Opportunities Tata Consultancy Services: Sustaining Growth Momentum in China 2010 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 are -
Building a culture of innovation
– managers at Tcs China can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tcs China can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Tcs China can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Manufacturing automation
– Tcs China can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Tcs China to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tcs China in the consumer business. Now Tcs China can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Tcs China can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Tcs China has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tcs China to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tcs China in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Tcs China to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Tcs China has opened avenues for new revenue streams for the organization in the industry. This can help Tcs China to build a more holistic ecosystem as suggested in the Tata Consultancy Services: Sustaining Growth Momentum in China 2010 case study. Tcs China can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Tcs China can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tata Consultancy Services: Sustaining Growth Momentum in China 2010 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Tcs China to increase its market reach. Tcs China will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Tcs China can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Tata Consultancy Services: Sustaining Growth Momentum in China 2010 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 are -
Increasing wage structure of Tcs China
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Tcs China.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tcs China needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Tcs China needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tcs China will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Tcs China is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tcs China can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tcs China business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tcs China can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Tcs China.
Consumer confidence and its impact on Tcs China demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Tcs China can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tcs China with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Tata Consultancy Services: Sustaining Growth Momentum in China 2010 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tata Consultancy Services: Sustaining Growth Momentum in China 2010 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Tcs China needs to make to build a sustainable competitive advantage.
