Tata Consultancy Services: Sustaining Growth Momentum in China 2010 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing transportation and logistics costs,
increasing energy prices, central banks are concerned over increasing inflation, 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 -
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.
Diverse revenue streams
– Tcs China is present in almost all the verticals within the industry. This has provided firm in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Ability to recruit top talent
– Tcs China is one of the leading recruiters in the industry. Managers in the Tata Consultancy Services: Sustaining Growth Momentum in China 2010 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Highly skilled collaborators
– Tcs China has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Tata Consultancy Services: Sustaining Growth Momentum in China 2010 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Organizational Resilience of Tcs China
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tcs China does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Technology & Operations industry
– Tata Consultancy Services: Sustaining Growth Momentum in China 2010 firm has clearly differentiated products in the market place. This has enabled Tcs China to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Tcs China to invest into research and development (R&D) and innovation.
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 -
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.
Slow to strategic competitive environment developments
– As Tata Consultancy Services: Sustaining Growth Momentum in China 2010 HBR case study mentions - Tcs China takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Skills based hiring
– The stress on hiring functional specialists at Tcs China has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
Lack of clear differentiation of Tcs China products
– To increase the profitability and margins on the products, Tcs China needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Tcs China has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Tata Consultancy Services: Sustaining Growth Momentum in China 2010 should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tata Consultancy Services: Sustaining Growth Momentum in China 2010, it seems that the employees of Tcs China don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Slow decision making process
– As mentioned earlier in the report, Tcs China has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Tcs China even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tcs China is facing challenges because of the dominance of functional experts in the organization. Tata Consultancy Services: Sustaining Growth Momentum in China 2010 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tcs China can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Tata Consultancy Services: Sustaining Growth Momentum in China 2010, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tcs China to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tcs China to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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 -
Environmental challenges
– Tcs China needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Tcs China can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tcs China in the Technology & Operations sector and impact the bottomline of the organization.
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 .
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.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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.
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.
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.