Infosys: Financing an Indian Software Start-Up SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Infosys: Financing an Indian Software Start-Up
This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Describes the financing and growth of Infosys, an Indian software start-up. Infosys defies a number of stereotypes about barriers to entrepreneurship in India. The company was founded by a small group of entrepreneurs with little equity and without backing from a large family conglomerate. While Infosys has been very successful recently, there was also a highly uncertain period in the company's history. At the time of the case, Mr. Murthy, Infosys' CEO, and his team once again face important challenges regarding future growth and financing. Infosys' shares trade on the Bombay Stock Exchange. The company must decide whether it should seek to also list its shares on a U.S. stock exchange and, if yes, whether to list on NASDAQ or NYSE.
Swot Analysis of "Infosys: Financing an Indian Software Start-Up" written by Walter Kuemmerle, William J. Coughlin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Infosys Financing facing as an external strategic factors. Some of the topics covered in Infosys: Financing an Indian Software Start-Up case study are - Strategic Management Strategies, Financial analysis, Financial management, Financial markets, Growth strategy, IT and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Infosys: Financing an Indian Software Start-Up casestudy better are - – increasing transportation and logistics costs, increasing energy prices, geopolitical disruptions, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Infosys: Financing an Indian Software Start-Up
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Infosys: Financing an Indian Software Start-Up case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Infosys Financing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Infosys Financing 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: Financing an Indian Software Start-Up can be done for the following purposes –
1. Strategic planning using facts provided in Infosys: Financing an Indian Software Start-Up case study
2. Improving business portfolio management of Infosys Financing
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Infosys Financing
Strengths Infosys: Financing an Indian Software Start-Up | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Infosys Financing in Infosys: Financing an Indian Software Start-Up Harvard Business Review case study are -
Strong track record of project management
– Infosys Financing 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 Infosys Financing 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.
Analytics focus
– Infosys Financing 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 Walter Kuemmerle, William J. Coughlin 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.
Innovation driven organization
– Infosys Financing is one of the most innovative firm in sector. Manager in Infosys: Financing an Indian Software Start-Up Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Infosys Financing is present in almost all the verticals within the industry. This has provided firm in Infosys: Financing an Indian Software Start-Up 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 Infosys Financing 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.
Superior customer experience
– The customer experience strategy of Infosys Financing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Innovation & Entrepreneurship field
– Infosys Financing is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Infosys Financing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Infosys: Financing an Indian Software Start-Up 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.
Low bargaining power of suppliers
– Suppliers of Infosys Financing in the sector have low bargaining power. Infosys: Financing an Indian Software Start-Up has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Infosys Financing to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Infosys Financing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Infosys Financing 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.
Training and development
– Infosys Financing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Infosys: Financing an Indian Software Start-Up 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.
Weaknesses Infosys: Financing an Indian Software Start-Up | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Infosys: Financing an Indian Software Start-Up are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Infosys: Financing an Indian Software Start-Up, in the dynamic environment Infosys Financing has struggled to respond to the nimble upstart competition. Infosys Financing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Infosys: Financing an Indian Software Start-Up 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 Financing has relatively successful track record of launching new products.
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 Infosys Financing supply chain. Even after few cautionary changes mentioned in the HBR case study - Infosys: Financing an Indian Software Start-Up, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Infosys Financing vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Infosys Financing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Infosys: Financing an Indian Software Start-Up can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Infosys Financing 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.
Lack of clear differentiation of Infosys Financing products
– To increase the profitability and margins on the products, Infosys Financing needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Infosys Financing 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: Financing an Indian Software Start-Up should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Infosys Financing 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.
No frontier risks strategy
– After analyzing the HBR case study Infosys: Financing an Indian Software Start-Up, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Infosys Financing 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.
Slow decision making process
– As mentioned earlier in the report, Infosys Financing 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. Infosys Financing 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.
Opportunities Infosys: Financing an Indian Software Start-Up | 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: Financing an Indian Software Start-Up are -
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 Financing can use these opportunities to build new business models that can help the communities that Infosys Financing operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Infosys Financing 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 Financing to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Infosys Financing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Infosys: Financing an Indian Software Start-Up 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.
Using analytics as competitive advantage
– Infosys Financing 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 Infosys: Financing an Indian Software Start-Up - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Infosys Financing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Infosys Financing is facing challenges because of the dominance of functional experts in the organization. Infosys: Financing an Indian Software Start-Up 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Infosys Financing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Infosys Financing 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 Financing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Infosys Financing 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, Infosys: Financing an Indian Software Start-Up, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Infosys Financing to increase its market reach. Infosys Financing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Infosys Financing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Infosys Financing 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 Innovation & Entrepreneurship segment.
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 Financing in the consumer business. Now Infosys Financing can target international markets with far fewer capital restrictions requirements than the existing system.
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 Financing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Infosys: Financing an Indian Software Start-Up External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Infosys: Financing an Indian Software Start-Up are -
Environmental challenges
– Infosys Financing 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 Financing can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Infosys Financing 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: Financing an Indian Software Start-Up .
Stagnating economy with rate increase
– Infosys Financing 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Infosys Financing in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Infosys Financing 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.
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.
Regulatory challenges
– Infosys Financing 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 Innovation & Entrepreneurship industry regulations.
Consumer confidence and its impact on Infosys Financing 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.
Increasing wage structure of Infosys Financing
– 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 Infosys Financing.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Infosys Financing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Financing business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Infosys Financing has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Infosys Financing needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Infosys Financing is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Infosys: Financing an Indian Software Start-Up 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: Financing an Indian Software Start-Up 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: Financing an Indian Software Start-Up 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: Financing an Indian Software Start-Up 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: Financing an Indian Software Start-Up 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 Financing needs to make to build a sustainable competitive advantage.