Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code :BSM0043

Year : 2009

Industry : Information Technology and IT Enabled Services

Region : Global

Teaching Note:Available

Structured Assignment :Available

Abstract: It may sound funny but when analysed from the point of business implications, very insightful strategic issues emerge. During 2007–2008, TCS earned 51% of its revenue from North America, whereas IBM's overseas revenue accounted for 65%. Indian IT industry has become competitive with its offshore providers like TCS, Infosys, and Wipro winning 'big ticket' contracts globally. In their quest to get into the big league of global players, these companies are ramping up their operations inorganically worldwide in low-cost countries, like Hungary, Poland, China and Mexico, besides developed countries like US and UK. On the contrary, global players such as IBM, Accenture, etc., are expanding their reach by competing with them in their homeland and making India as a pivot for any of their offshore strategies. The competition has taken the global centre stage with HP's acquisition of EDS. On the other side, TCS and Infosys are trying to rejig their strategies focussing on increasing domain capabilities as well as climbing up the higher-end of the IT value chain to maintain their growth momentum. This case study highlights the challenges faced by the IT companies from emerging markets like India - which are trying to gain a foothold in the high-end of the value chain. It triggers the dilemma - can companies following low-cost model provide high-end services that are risky and cost-intensive?