Infosys is an Indian-based Multinational IT company that provides business consulting services, outsourcing services, and information technology services. It is the second-largest IT Company in India and the 4th company in India to cross the $100 billion market capitalization mark. This SWOT focuses on the strengths, weaknesses, opportunities, and threats facing Infosys.
| Name | Infosys |
| Website | www.infosys.com |
| Founders | N.R. Narayana Murthy, Nandan Nilekani, S. Gopalakrishnan, S. D. Shibulal K. Dinesh, N. S. Raghavan, Ashok Arora |
| Chief Executive Officer (C.E.O.) | Will Shu |
| Headquarters | Bangalore, Karnataka, India |
| Type of Corporation | Public |
| Year Founded | 1981 |
| Revenues (2019) | US$14 billion |
| Key Products/Services | Outsourcing, Consulting, Managed services |
| Key Competitors | TestComplete, Perfecto, Applause.Kobiton, Ranorex Studio, LambdaTest, pCloudy |
Strengths of Infosys
Superior Customer Experience and Strong Product
Infosys’ products and services are of superior quality leaving high customer satisfaction rates. The brand has earned high customer reviews on various review sites. The brand is rated 4.6/5 stars by 67,798 on glassdoor.co.in, 3.9/5 stars on ie.indeed.com by 13,842.
Low Labor Cost
Infosys has a major advantage over its competitors globally when it comes to its cost of labor. Infosys has the majority of its development centers in India. India is rich with quality expertise in technical talent that is offered at very low costs.
India’s labor rates are much lower than in developed countries. This savings in the cost of operation goes a long way in increasing the profitability and affordability of a brand’s services. With this lower labor cost, the company is able to sell at lower prices and thus gain a competitive advantage over other companies.
Diversified Business Solution
Infosys offers a comprehensive range of services to position it as a one-stop-shop for all business solutions. It provides end-to-end business IT services, business consulting, software-based services, and business process management among others.
Businesses across different industries can seamlessly have their needs met without having to move from one service provider to another. This diversification ensures stronger brand visibility, builds a stronger brand image, and increases profitability while hedging against un-systematic risk.
Strong Strategic Partnerships
Infosys has formed strategic partnerships with major technological companies on the global scene to enrich its product and service delivery. Its partners include IBM, HP, Microsoft, Oracle, and Amazon among other 30+ companies. These partnerships build synergies in the areas of expertise, innovation, finances, business networking, and market opportunities among others.
Infosys in the end is able to deliver a superior customer experience.
Employee Training Programs
Infosys provides continuous training for high-level personal skills. This equips employees with the necessary expertise to innovate solutions for the global stage. This has helped Infosys increase its employee focus and productivity, has had its employees remain up-to-date with the technological changes as well as industry changes.
High Brand Value
Brand value is a critical element of a business; the brand is much more important than even the product itself. This is because the brand lives much longer than the product; and people buy brands, not products. According to the brand directory, Infosys has ranked 4th in IT services globally; it has moved one step up from its position last year.
HFS ranked Infosys number 1 in their 2021, Best of the best banking and financial services providers report globally. The brand appears multiple times on the Forbes list. In 2021, the brand was ranked position 588 in the world’s best employer 2021; position 492 on Global 2000, 2021: position 744 in sales, 257 in profits, 1781 in assets, and 196 in market value; ranked position 410 in best employer for diversity in 2021.
Strategic Acquisitions
Infosys has over time made strategic acquisitions. In 2020, the brand acquired Simplus, Kaleidoscope, and GuideVision. All together the brand has had 15 acquisitions. These are critical to the brand’s product diversification strategy as they support the different product lines and ensure that every product line delivers a superior experience for the customer.
Weaknesses of Infosys
Heavy Dependence on Two Markets
Infosys heavily depends on the North American and European markets for its business. Close to 80% of Infosys’s revenues come from the two regions. In case of adverse occurrences in either of these markets, then Infosys’ operations and profitability could be significantly affected.
Employee Attrition
Infosys has witnessed high attrition rates in the recent past. The brand saw employee attrition rise from 5.2% to 15.2% in December. This was a steep rise over the two quarters. Analysts observed that Infosys would have to award wage hikes to stem any further rise in attrition rates.
The brand attributes this attrition to strong industry growth. A statement by the brand said that it plans to build up employee engagement, hike their salaries and also offer promotions.
Opportunities of Infosys
Strong Industry Growth
The IT industry has witnessed strong growth in the recent past due to the paradigm shift in working arising from COVID. Analysts foresee strong growth in software spending that is predicted to grow at 10% in 2021 and 11% in 2022.
Infosys has been a beneficiary of this growth registering growth rates of up to 40%. The brand needs to continue strategically positioning itself to reap further from the growth that will continue for the foreseeable future.
More Markets to Explore
Infosys has concentrated its efforts on the North America and Europe markets. While these two markets have seen Infosys grow in revenues to be a giant in its industry, the brand has a lot more opportunities in emerging markets all over the globe.
It is important however that proper market research is done to map out particular markets that fit well with Infosys’s business model.
More Strategic Acquisition
Infosys should continue to identify start-ups that could be the best fit in the brand’s growth agenda and acquire such for the brand’s growth. The brand already has experience in acquisitions and would therefore be better placed to make more growth in this regard.
Continuous Innovation
Continuous innovation is an indispensable part of growth for Infosys and any other brand in the market today. Regardless of the size of the brand, if it fails to innovate then it is sure headed for a downfall. Infosys has come so far with heavy investments in innovation. The brand should continue with this strategy
Threats of Infosys
Rising Wage Rates
The industry has seen a marked increase in wage rate. Initially, Infosys thrived on low wage rates in India, but now there is pressure worldwide to increase wages or face attrition. This increase in wages is sure to eat into the brand’s profits. At this level, the brand does not have much of a choice.
The brand will need to have creative ways of cutting costs to counter the effect of increased wage bills on profitability.
Stiff Competition
Infosys faces strong competition from Accenture, TCS, Capgemini, and Wipro among others. Competition is not only from the well-established brands mentioned above, the brand faces competition from startups and new entrants into the market. All these threaten Infosys’s market share.
Conclusion
Infosys is such a strong brand that has grown over the years to become a global brand. It has a strong product and excellent service that is valued globally. The brand needs to continue strengthening its brand with innovation and more market penetration.
