Business Strategy of Tata Consultancy Services (TCS)

trade scheme of Tata Consultancy go (TCS)TATA group of companiesTata Group of companies is the largest private corporate group in India and has been recognized as one of the most respected companies in the world which was founded by Jamsedji R Tata in 1991. The company has trading operations in more than 85 countries across six continents and its companies export products and serve to 80 nations and the Tata Group comprises (114) companies and subsidiaries in seven melodic line sectors (Tata Sons Ltd., 2010).SBUs of TATA group For inside information re bring forth abduce to appendix no.1)SBUs which piddle a major part of the Tata group includeTata steelTata motors Ltd.Tata consultancy functionTata TechnologiesTata teaTata powerTata CommunicationsTata TeleservicesTata hotels1.1 Company profile Tata consultancy services (TCS)SBU of Tata grouphttp//t2.gstatic.com/images?q=tbnftrqMPzMyAWhIMt=1usg=__pSSLT1wgbnRMMkApfc8zl-8DYsg=Source http//biet.beadvg.org/images/logos/tcs_logo_ cmyk.jpgTata Consultancy Services (TCS) is one of the SBU of Tata group of companies. It is a Softw ar services consulting company which is a subsidiary Tata group .It is the largest provider of information applied science (IT) and business process outsourcing services in Asia. It has offices in 42 countries with more than 142 branches across the globe. The company is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange(BSE) of India.TCS princip totallyy offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique strategic Global Network Delivery Model which is recognized as the benchmark of excellence in the IT industry (LinkedIn Corporation, 2010) .TCS is catamenialy investing in new technologies, new processes people in order to achieve an competitive edge (Amdocs Ltd., 2010).(For details please bring up to appendix no.2)TCS athletic supporters some of the worlds largest companies to adopt the right applied scie nce-enabled solution that functions them in following manner (Tata Sons Ltd., 2010).Optimize business performanceFacilitate alignment of business with engine roomConnect their extended supply chainsReduce product development timeImprove product differentiationProvide real-time business brainstormLower operational representsTCS business social structureFollowing diagram illustrates operating structure of TCSFig 1.TCS operating structureSource http//www.allbusiness.com/glossaries/organizational-structure/4943569-1.html2 Business Level StrategiesTCS has developed its business train scheme by assuming as world financial institutions are in a tremendous violate of crisis and think of scaling up revenue from other industries. (Tata Consultancy Services Limited, 2010). TCS names its business divisions as Industry Service Practice which will dish up them to squirrel away maximum revenue from Banking Financial Services and Insurance Sectors. (Please refer to appendix no. 3)Generic Business Strategies of TCSTCS provides low cost Global legal transfer with the help orbicular strategy.TCS mainly nidus on customer relationship management customer retention in order increase the business revenue.TCS provides timely delivery of IT services with the help of proven delivery quality framework called as (iQMS)TCS uses differentiation strategy by providing low end services in basis of cost, resources.TCS likewise diffenciate its superior end services such as consulting in term of niche offerings.TCS has strong knowledge management system resource power by which they has successful in reaching the overall cost leadership in the (IT) industry.TCS has develop a resolute strategy where they are providing (IT) services consort to the requirements of customer and the nature of business. targeting new markets like Middle East, Europe, and Asia-pacific.Currently TCS Focus on Centres of Excellence (CoE) to hold ability so as to construct technologies such as service-o riented architecture, testing, and virtualization which will help TCS to attempt outsized projects so as to alter customers (IT) applications.Business train strategy modelFollowing diagram illustrates different business level strategies of TCS which are closely related to the company.Fig 2. Business level strategy model-TCSSource originBusiness level Strategies are listed infraGlobal StrategiesStrategic Alliance strategyAcquisition strategyTCS Co innovation network (coin) strategy(1) Global strategyTCS global strategy structure tend towards its global operations to implement a Customer centric and integrated approach which will help them to control external factors arising from the Economic meltdown in western countries. TCSs global operation units is divided into five main divisions includes the established markets like North America K Western Europe as well as the new markets includes mainly Latin America, Middle east, India and Eastern Europe. TCS was the first one to set t he global delivery centre in china which distinguished TCS from other corporate companies (Mitra, 2005).This global strategy of TCS will Increase Companys market growth rate at the rate of 40% every year. TCS is establishing global delivery centres outside India which demonstrate TCS as a Global company. In recent years TCS was frequently changing its approach towards global market. (For details please refer to appendix no .3)Global strategy mapFollowing map illustrated the countries where TCS col science laborate its global strategyMainly includes US, Mexico, China, India, Hungary, UK, West-Europe etc.http//htmlimg3.scribdassets.com/entwg1s84irfuww/images/15-8f526c1a8f/000.jpgFig.3 Global outline mapSource http//www.cogmap.com/chart/tata- consultancy-services2 Strategic Alliances strategyTata consultancy services have been holding a strategic relationship with various International technology (IT) vendors such as Intel, Hewlett-Packard (HP), IBM this distinguished as service prov ider, customer, supplier, and alliance partner. (Mitra, 2005). The relationships with the international technology vendors have made TCS to maintain a holistic approach to create a joint venture opportunities with these international vendors on joint look into by which each others strengths will provide a strategic advantage by following ways(For details please refer to appendix no.4)It creates joint engagements with (IT) vendors.It provide new or improved solutions on problemsIt helps to adopt a Joint go-to-market strategy for the specific (IT) solutions.3. Acquisition strategyTCS divides its acquisition strategy into two components. Organic means and inorganic means (Mitra, 2005). The Inorganic way of acquisitions of companies this has business sense to TCS as part of its strategy to look at expansion options has set up an internal team which will focus only on acquisition strategies.(For details please refer to appendix no.5)4. Co- innovation network (coin) strategiesTCS have im plemented a Co-innovation strategy in order to face the competition in todays globalisation world. Where competition among the IT companies is increasing day by day. TCS has developed implement an innovative technology which will result in collaborating a Globally Distributed Network (GDN) (Mitra, 2005). (Please refer to appendix no.6)Bowmans strategic clockBusiness level strategy of TCS gouge also be explained with the help of Bowmans Strategic clock (work of falling off Bowman) (For details please refer to appendix no.7)Fig 4. Bowmans strategic clockSource Adopted from (Faulkner Bowman, 1995)Based on the competition faced by TCS they are using two parallel strategies so as to sustain in the (IT) sector.Differentiation-TCS use differentiation strategy by offering its low high end services such as consulting in term of niche offerings terms of cost resources. Expertise that is different from those of the competitors in (IT) industry which are cute by the customers.Low price- TCS has achieved cost (price) leadership in the (IT) industry with the help of its strong knowledge management system as compare to competitors. fit in to Bowmans strategic clock differentiation Low price strategy comes under hybrid strategy. So, it is evident that TCS use these strategies in order to support up with the emerge (IT) trends and working out towards its goal of being the most chosen dent in the (IT) industry.TCS Business level Strategies can also be identified and explained with the help of Ansoff hyaloplasm which divides the strategy of a company into four different categories namely,(i) food market Penetration Strategy(ii) Market Development Strategy(iii) Product Development Strategy(iv) Diversification StrategyTCSs growth and development strategies based on Ansoffs matrixAnsoffix growth matrix For details please refer to appendix no.8)TCSS Business level Strategies can also be identified and explained with the help of Assnsoff matrix as followsExisting Product s New Products(Market Penetration)Existing Markets USA and EuropeExisting Products ADM, BPO, KPO, consultancy services software products.(Product Development)Existing Market USA and EuropeNew Product Consultancy and package implementation services in relatively growing sectors life sciences healthcare, aviation sector, and KPO services(Market Development)New markets India, Middle-east and AustraliaExisting Products ADM, BPO, KPO, consultancy services Software products (financial products).(Diversification)New productsvertical- Specific services packages, TCS Financial Solutions, and Platform-based BPONew markets Latin America, Eastern Europe, Middle East Africa and India),Existing MarketNew MarketFig 4. Ansoffix growth matrix of TCSSource Author(i) Market penetration strategyAs per the growth matrix TCS is currently get intos its take off of services into USA and Europe where they provide ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail firms) as well a s they provide software products (financial products) to the firms as most large clients in US and Europe are concentrating on cutting costs of (IT) related services (Tata Consultancy Services Limited, 2010). TCS demand to be more aggressive on cost cutting strategy with good quality.(ii) Market development strategyAs per the growth matrix TCS is concentrating on new markets like India, Middle-east and Australia where they provide products like ADM, BPO, KPO consultancy services (in BFSI, manufacturing and retail) and software products (financial products) (Tata Consultancy Services Limited, 2010).Since these are the most fast developing IT market where TCS needs to keep a paradigm as a shift in focus from US EU markets to these new markets.(iii) Product Development StrategyAs per the growth matrix TCS is selling its new products such as Consultancy and package implementation services in relatively growing sectors especially in life sciences healthcare, aviation sector, and KPO s ervices into existing markets like USA and Europe (Tata Consultancy Services Limited, 2010). This strategy will definitely help on building expertise in these domains by strategic acquisitions.(iv) Diversification strategyAs per the growth matrix TCS has diversified their new products like vertical- Specific services packages, TCS Financial Solutions, and Platform-based BPO into new markets like Europe and other emerging markets where the market growth of the company has change magnitude by 40 % (Tata Consultancy Services Limited, 2010).TCS diversified its function to new markets like Latin America and Middle East for considerable expansion. In order to penetrate a new market TCS has established delivery and offshore centres in countries like Brazil, Uruguay and Mexico.3 Strengths weaknesses based on business Level StrategiesFollowing postpone illustrates (TCS) strengths and weaknessesStrengthsWeaknessesExtensive Universal reachStrong economic performanceStrong brand name and aw arenessUnique service OfferingsEmployee Management Skills (HR Skills)Innovation lab systemFame of move over significant publicity to financial marketsLack of focus on the domestic markets.Deficient in level of consultingOperationsSource Author3.1 Strengths(1) Extensive Universal reach TCS has widespread a global reach by its product and services throughout its branches all over the world includes in UK, U.S, Middle east, Australia, Europe etc. (Tata Consultancy Services Limited, 2010). This provides a assorted revenue base for the company to have an active control on its business operations universally.(2) Strong economic performance TCS has made apparent and strong economic presentations around the globe which makes its clients to be financially confident about the company and thence it will increase companys reputation.(3) Strong brand name and awareness As the popularity of the brand TCS (Tata consultancy services) has been reach all over the world which made TCS a reputed bra nd image in the Global information technology (IT) and software industries.(4) Unique service Offerings TCS provides a unique range of services including business consulting information technology, business process outsourcing (BPO), infrastructure, and engineering which distinguished them from competitors belong to IT industry (Tata Consultancy Services Limited, 2010).(5) Employee Management Skills (HR Management Skills) The domestic base of TCS i.e. India is well -known for its skilled employees in IT field which of course made TCS a very strong in HR management .TCS is also recruited its board of Directors are from overseas countries in order to adopt the strategies from all the parts of the world.(6) Innovation in lab system TCS have most effective infrastructures and innovative labs all over the world with most modern technologies which help its employees to have an access to update the most up-to-date information to make research in various IT related fields (Tata Consultancy Services Limited, 2010). This provides TCS an competitive edge.(7) Fame of founder Tata is recognised as the most renowned brand in Asia as well as the fame of the founder Mr.Ratan J Tata also added look upon to TCS (Tata Consultancy Services Limited, 2010).3.2 Weaknesses(1) Momentous publicity to financial marketsThe Excess exposure on the financial service markets at a global level (Datamonitor, 1998). Which generally necessitate to be keep confidential as they it displays companys private policies and legal terms which is considered as the primary delineate weakness of Tata consultancy services (TCS)(2) Lack of focus on the domestic marketsAs per the strength of TCS it has an Extensive Universal reach by its product and services throughout it are all over the world branch which provides a diverse revenue base for the company. (Datamonitor, 1998). But at the same time domestic markets are also affected due to lack of focus by the company. This is the key weakness of Tata consu ltancy services (TCS).(3) Deficient in level of consulting operationsLack in Effective consulting team which show a strong reflection of freeze off in the growth Cycle of the TCS, Being a company which mainly works on Outsourcing on scale large projects and assignment which generally needs a very good effective consulting team which acts as the link between the Clients and company (Tata Consultancy Services Limited, 2010).TCS company is lacking behind in its level of consulting operations.Report to the Board of DirectorsTo,The Board of Directors,Tata consultancy services Ltd.Subject Recommendations for the (TCS) business unit.Respected Board members,In the report which is attached along with a critical research and analysis has been done on the corporate strategy followed by your company. The research and analysis has been conducted by using various corporate strategy tools and methods and the companys past and current strategies have been highlighted.On the basis of the strengths and the weaknesses of these strategies we have stated so following are the recommendations which I was able to generate after studying the strategies adopted by the TCSTCS should create specific value propositions aimed directly at the relevant stakeholders which include business executives, IT personnel in order to improve your market positioning in domestic markets.The excess exposure on the financial service markets which usually need to be kept confidential is considered as the main weakness of TCS so they can should focus more on increasing their IP (Intellectual Property) assets in order to lower the momentous publicity to financial markets (Tata Consultancy Services Limited, 2010).TCS can also go for isolation strategies with premium services like IT solutions and focus on a niche market.In market Meltdowns (recession) marketing can work as a differentiator. TCS can alter its focus from Low cost advantage to high quality services considering quality being pioneer in the (IT) industry.TCS can offer diverse services to refrain from being over-dependent and increasing exposure to the vulnerabilities of few sectors like USA.TCS can adopt ADM (Application Development and maintenance) system to increase value added services, BPO to Consulting and Package Implementation (Tata Consultancy Services Limited, 2010).Consolidation and strategic acquisitions are essential for future growth of revenues. The HP-EDS merger (one of the biggest ever merger in this industry) is evidence to this. TCS should pull in for such opportunities which are strategic fit for the company.TCS has rightly placed SMB (Small and Medium Businesses) as a separate strategic unit, which should be focused aggressively. They should also focus consulting practice on the same business unit (Tata Consultancy Services Limited, 2010).