TCS Looks West - IBM Eyes East: Switching Homelands for Revenues



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Code :BSM0043

Year :
2009

Industry : Information Technology and IT Enabled Services

Region : Global

Teaching Note:Available

Structured Assignment :Available

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Abstract: It may sound funny but when analysed from the point of business implications, very insightful strategic issues emerge. During 20072008, 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?

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Pedagogical Objectives:

  • To analyse the value chain of the Indian IT industry and explore its strengths and weaknesses
  • To debate on how good it is for IT companies to peg revenues on one source
  • To explore the options available for TCS to diversify its revenues

    Keywords : IT, TCS, IBM, Value Chain, Revenues, Outsourcing, India, ITes, Offshoring, SWOT, Global Network Delivery Model, Accenture, Infosys, Wipro, Software Companies

    Contents :
    Indian IT Companies - Stuck Up in the Muddle
    TCS - Expanding Across the Globe
    IBM - Skewed Towards India


    Case Introduction >>


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