Infosys: The Buyout Strategy for Vision 2020 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Infosys: The Buyout Strategy for Vision 2020
Infosys Limited, a large Indian information technology (IT) company, had set a target of achieving revenues of US$20 billion by 2020 (known as Vision 2020) and thus needed swift growth. Acquisitions were a possible source of growth, but the problem was where and what to acquire and how to take the post-merger integration factor into account for achieving this growth. Infosys Limited had already made several acquisitions, which improved the company's client base, knowledge, and geographical expansion, but a few had also been controversial. If Infosys Limited was going to use acquisitions to continue the swift growth it needed to meet its Vision 2020, the company needed the right buyout strategy. Which business and geographical segments should Infosys Limited invest in, and what should be the key determining factors to drive the acquisitions-increased clientele, enhanced technology, or increased geographical reach? Netra Pal Singh and Nakul Gupta are affiliated with Management Development Institute.
Swot Analysis of "Infosys: The Buyout Strategy for Vision 2020" written by Netra Pal Singh, Nakul Gupta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Infosys 2020 facing as an external strategic factors. Some of the topics covered in Infosys: The Buyout Strategy for Vision 2020 case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Infosys: The Buyout Strategy for Vision 2020 casestudy better are - – increasing energy prices, there is backlash against globalization, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Infosys: The Buyout Strategy for Vision 2020
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Infosys: The Buyout Strategy for Vision 2020 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Infosys 2020, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Infosys 2020 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 Infosys: The Buyout Strategy for Vision 2020 can be done for the following purposes –
1. Strategic planning using facts provided in Infosys: The Buyout Strategy for Vision 2020 case study
2. Improving business portfolio management of Infosys 2020
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Infosys 2020
Strengths Infosys: The Buyout Strategy for Vision 2020 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Infosys 2020 in Infosys: The Buyout Strategy for Vision 2020 Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Infosys 2020 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Infosys 2020 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.
Organizational Resilience of Infosys 2020
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Infosys 2020 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Infosys 2020 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
– Infosys 2020 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Infosys 2020 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Infosys 2020 is one of the most innovative firm in sector. Manager in Infosys: The Buyout Strategy for Vision 2020 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Infosys: The Buyout Strategy for Vision 2020 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Infosys 2020 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Infosys: The Buyout Strategy for Vision 2020 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.
Successful track record of launching new products
– Infosys 2020 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Infosys 2020 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.
High switching costs
– The high switching costs that Infosys 2020 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Infosys: The Buyout Strategy for Vision 2020 firm has clearly differentiated products in the market place. This has enabled Infosys 2020 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Infosys 2020 to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Infosys 2020 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 Infosys: The Buyout Strategy for Vision 2020 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Infosys 2020 in the sector have low bargaining power. Infosys: The Buyout Strategy for Vision 2020 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Infosys 2020 to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Infosys: The Buyout Strategy for Vision 2020 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Infosys: The Buyout Strategy for Vision 2020 are -
Lack of clear differentiation of Infosys 2020 products
– To increase the profitability and margins on the products, Infosys 2020 needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Infosys 2020 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Infosys: The Buyout Strategy for Vision 2020, in the dynamic environment Infosys 2020 has struggled to respond to the nimble upstart competition. Infosys 2020 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Infosys 2020 has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Infosys 2020 is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Infosys 2020 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Infosys 2020 to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Infosys: The Buyout Strategy for Vision 2020 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 Infosys: The Buyout Strategy for Vision 2020 can leverage the sales team experience to cultivate customer relationships as Infosys 2020 is planning to shift buying processes online.
Products dominated business model
– Even though Infosys 2020 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 - Infosys: The Buyout Strategy for Vision 2020 should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Infosys 2020 has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Infosys: The Buyout Strategy for Vision 2020 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 Infosys 2020 has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Infosys: The Buyout Strategy for Vision 2020, it seems that the employees of Infosys 2020 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 cash cycle compare to competitors
Infosys 2020 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.
Opportunities Infosys: The Buyout Strategy for Vision 2020 | 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 Infosys: The Buyout Strategy for Vision 2020 are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Infosys 2020 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Infosys 2020 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Infosys 2020 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 Infosys 2020 to hire the very best people irrespective of their geographical location.
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 Infosys 2020 in the consumer business. Now Infosys 2020 can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Infosys 2020 can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Infosys 2020 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Infosys 2020 can use these opportunities to build new business models that can help the communities that Infosys 2020 operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Infosys 2020 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.
Loyalty marketing
– Infosys 2020 has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Infosys 2020 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Infosys 2020 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. Infosys 2020 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.
Better consumer reach
– The expansion of the 5G network will help Infosys 2020 to increase its market reach. Infosys 2020 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.
Creating value in data economy
– The success of analytics program of Infosys 2020 has opened avenues for new revenue streams for the organization in the industry. This can help Infosys 2020 to build a more holistic ecosystem as suggested in the Infosys: The Buyout Strategy for Vision 2020 case study. Infosys 2020 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Infosys: The Buyout Strategy for Vision 2020 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Infosys: The Buyout Strategy for Vision 2020 are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Infosys 2020 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 Infosys: The Buyout Strategy for Vision 2020 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Infosys 2020 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Infosys 2020 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Infosys 2020 is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Infosys 2020 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 Strategy & Execution industry regulations.
High dependence on third party suppliers
– Infosys 2020 high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 Infosys 2020 business can come under increasing regulations regarding data privacy, data security, etc.
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 Infosys 2020.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Infosys: The Buyout Strategy for Vision 2020, Infosys 2020 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Infosys 2020 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. Infosys 2020 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Infosys 2020 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Infosys 2020 needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Infosys 2020 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.
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 Infosys 2020 in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Infosys: The Buyout Strategy for Vision 2020 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 Infosys: The Buyout Strategy for Vision 2020 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 Infosys: The Buyout Strategy for Vision 2020 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 Infosys: The Buyout Strategy for Vision 2020 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 Infosys: The Buyout Strategy for Vision 2020 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 Infosys 2020 needs to make to build a sustainable competitive advantage.