Business Strategy of Tata Consultancy Services (TCS)

TATA band of companies:

Tata Band of companies is the major private corporate and business group in India and has been named one of the very most respected companies in the world that was founded by Jamsedji R Tata in 1991. The company has businesses in more than 85 countries across six continents and its companies export products and services to 80 nations and the Tata Group includes (114) companies and subsidiaries in seven business areas (Tata Sons Ltd. , 2010).

SBU's of TATA group :( For details please refer to appendix no. 1)

SBU's which form a significant part of the Tata group include:

Tata steel

Tata motors Ltd.

Tata consultancy services

Tata Technologies

Tata tea

Tata power

Tata Communications

Tata Teleservices

Tata hotels

1. 1 Company account: Tata consultancy services (TCS)

SBU of Tata group:

http://t2. gstatic. com/images?q=tbn:ftrqMPzMyAWhIM::&t=1&usg=__pSSLT1wgbnRMMkApfc8zl-8DYsg=

Source: http://biet. beadvg. org/images/logos/tcs_logo_cmyk. jpg

Tata Consultancy Services (TCS) is one of the SBU of Tata band of companies. It really is a Software services talking to company which really is a subsidiary Tata group. It's the largest supplier of information technology (IT) and business process outsourcing services in Asia. They have office buildings in 42 countries with an increase of than 142 branches across the globe. The company is stated on the Country wide Stock Exchange (NSE) and Bombay Stock Exchange(BSE) of India. TCS mainly offers a consulting-led, built in portfolio of computer and IT-enabled services sent through its unique strategic Global Network Delivery Model which is recognized as the benchmark of excellence in the IT industry (LinkedIn Company, 2010). TCS is currently investing in new technologies, new functions & people to be able to attain an competitive border (Amdocs Ltd. , 2010). (For details please refer to appendix no. 2)

TCS helps some of the world's most significant companies to adopt the right technology-enabled solution that helps them in pursuing manner (Tata Sons Ltd. , 2010).

Optimize business performance

Facilitate positioning of business with technology

Connect their expanded supply chains

Reduce product development time

Improve product differentiation

Provide real-time business insight

Lower operational costs

TCS business framework:

Following diagram illustrates working composition of TCS:

Fig 1. TCS operating structure

Source: http://www. allbusiness. com/glossaries/organizational-structure/4943569-1. html

2 Business Level Strategies:

TCS is rolling out its business level strategy by supposing as world finance institutions are in a significant shock of crisis and think of scaling up revenue from other establishments. (Tata Consultancy Services Limited, 2010). TCS titles its business divisions as Industry Service Practice which can only help them to accumulate maximum revenue from Banking Financial Services and Insurance Sectors. (Please make reference to appendix no. 3)

Generic Business Strategies of TCS:

TCS provides low cost Global delivery with the help global strategy.

TCS mainly concentrate on customer relationship management & customer retention to be able increase the business income.

TCS provides timely delivery from it services with the help of proven delivery & quality construction called as (iQMS)

TCS uses differentiation strategy by providing low end services in conditions of cost, resources.

TCS also diffenciate its high end services such as consulting in term of specific niche market offerings.

TCS has strong knowledge management system & resource

Strength where they has successful in reaching the overall cost management in the (IT) industry.

TCS has create a resolute strategy where they are simply providing (IT) services in line with the requirements of customer and the nature of business. & targeting new market segments like Midsection East, European countries, and Asia-pacific.

Currently TCS Focus on Centres of Superiority (CoE) to hold ability to be able to construct solutions such as service-oriented structures, tests, and virtualization which can only help TCS to attempt outsized projects to be able to adjust customer's (IT) applications.

Business level strategy model:

Following diagram illustrates various business level strategies of TCS that are meticulously related to the business.

Fig 2. Business level strategy model-TCS

Source: Author

Business level Strategies are the following:

Global Strategies

Strategic Alliance strategy

Acquisition strategy

TCS: Co invention network (coin) strategy

(1) Global strategy:

TCS global strategy structure have a tendency towards its global operations to implement a person centric and designed approach which can only help them to regulate external factors arising from the Economic Meltdown in american countries. TCS's global procedure units is split into five main divisions includes the established markets like THE UNITED STATES K & Western Europe as well as the new markets includes mainly Latin America, Midsection east, India and Eastern Europe. TCS was the first one to place the global delivery centre in China which distinguished TCS from other corporate companies (Mitra, 2005).

This global strategy of TCS increase Company's market progress rate at the pace of 40% every year. TCS is establishing global delivery centres outside India which demonstrate TCS as a Global company. Lately TCS was frequently changing its strategy towards global market. (For details please make reference to appendix no. 3)

Global strategy map:

Following map illustrated the countries where TCS collaborate its global strategy

Mainly includes US, Mexico, China, India, Hungary, UK, West-Europe etc.

http://htmlimg3. scribdassets. com/entwg1s84irfuww/images/15-8f526c1a8f/000. jpg

Fig. 3 Global Strategy map

Source: http://www. cogmap. com/chart/tata- consultancy-services

2 Strategic Alliances strategy:

Tata consultancy services have been possessing a strategic marriage with various International technology (IT) distributors such as Intel, Hewlett-Packard (HP), IBM this distinguished as company, customer, company, and alliance spouse. (Mitra, 2005). The romantic relationships with the international technology sellers have made TCS to keep a holistic approach to create a jv opportunities with these international sellers on joint research where each other's advantages provides a strategic benefit by following ways(For details please refer to appendix no. 4)

It creates joint engagements with (IT) suppliers.

It provide new or improved solutions on problems

It really helps to adopt a Joint go-to-market strategy for the precise (IT) solutions.

3. Acquisition strategy:

TCS 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 extension options has create an internal team that may target only on acquisition strategies. (For details please refer to appendix no. 5)

4. Co- development network (gold coin) strategies:

TCS have executed a Co-innovation strategy to be able to face the competition in today's globalization world. Where competition one of the IT companies is increasing daily. TCS has developed & put into action an ground breaking technology that may cause collaborating a "Globally Distributed Network (GDN)" (Mitra, 2005). (Please refer to appendix no. 6)

Bowman's strategic clock:

Business level strategy of TCS can even be explained with the aid of Bowmanёs Strategic clock (work of Cliff Bowman) (For details please refer to appendix no. 7)

Fig 4. Bowman's strategic clock

Source: Used from (Faulkner & Bowman, 1995)

Based on the competition experienced by TCS they are using two parallel strategies in order to preserve in the (IT) sector.

Differentiation:-TCS use differentiation strategy by offering its low &high end services such as consulting in term of market offerings & terms of cost resources. Knowledge that is different from those of the rivals in (IT) industry & which are valued by the customers.

Low price:-TCS has achieved cost (price) management in the (IT) industry by making use of its strong knowledge management system as compare to competitors.

According to Bowman's strategic clock differentiation & Low price strategy comes under 'cross strategy'. So, it is evident that TCS use these strategies to keep up with the rising (IT) styles and working out towards its goal of being the most chosen brand in the (IT) industry.

TCS Business level Strategies can even be identified and discussed by using Ansoff matrix which divides the strategy of a company into four different categories namely,

(i) Market Penetration Strategy

(ii) Market Development Strategy

(iii) Product Development Strategy

(iv) Diversification Strategy

TCS's expansion and development strategies predicated on Ansoff's matrix

Ansoffix development matrix :( For details please make reference to appendix no. 8)

TCS'S Business level Strategies can even be identified and discussed by using Assnsoff matrix as follows:

Existing Products New Products

(Market Penetration)

Existing Marketplaces: USA and Europe

Existing Products: ADM, BPO, KPO, consultancy services & software products.

(Product Development)

Existing Market: USA and Europe

New Product: Consultancy and package implementation services in relatively growing areas life sciences & health care, aviation sector, and KPO services

(Market Development)

New market segments: India, Middle-east and Australia

Existing Products: ADM, BPO, KPO, consultancy services & Software products (financial loans).

(Diversification)

New products:

vertical- Specific services deals, TCS Financial Solutions, and Platform-based BPO

New marketplaces: Latin America, Eastern Europe, Midsection East & Africa and India),

Existing Market

New Market

Fig 4. Ansoffix growth matrix of TCS

Source: Author

(i) Market penetration strategy:

As per the growth matrix TCS happens to be penetrates its range of services into USA and Europe where they offer ADM, BPO, KPO, consultancy services (in BFSI, making and retail firms) as well as they provide software products (financial loans) to the companies as most large clients in US and European countries are concentrating on reducing costs of (IT) related services (Tata Consultancy Services Small, 2010). TCS must be more extreme on cost lowering strategy with good quality.

(ii) Market development strategy:

As per the growth matrix TCS is focusing on new markets like India, Middle-east and Australia where they offer products like ADM, BPO, KPO consultancy services (in BFSI, production and retail) and software products (financial products) (Tata Consultancy Services Small, 2010). Since they are the most fast growing IT market where TCS needs to keep a paradigm as a move in target from US & European union marketplaces to these new market segments.

(iii) Product Development Strategy:

As per the development matrix TCS is providing its services such as Consultancy and deal implementation services in relatively growing areas especially in life sciences & medical, aviation sector, and KPO services into existing markets like USA and European countries (Tata Consultancy Services Limited, 2010). This plan will definitely help on building expertise in these domains by proper acquisitions.

(iv) Diversification strategy:

As per the development matrix TCS has diversified their services like vertical- Specific services deals, TCS Financial Alternatives, and Platform-based BPO into new market segments like European countries & and other rising markets where the market development of the company has increased by 40 % (Tata Consultancy Services Small, 2010). TCS varied its function to new market segments like Latin America and Middle East for considerable expansion. In order to penetrate a new market TCS has generated delivery and offshore centres in countries like Brazil, Uruguay and Mexico.

Following desk illustrates (TCS) advantages and weaknesses:

Strengths

Weaknesses

Extensive Universal reach

Strong economic performance

Strong brand name and awareness

Unique service Offerings

Employee Management Skills (HR Skills)

Innovation lab system

Fame of founder

Momentous promotion to financial markets

Lack of give attention to the domestic markets.

Deficient in level of consulting

Operations

Source: Author

3. 1 Talents:

(1) Extensive Universal reach: TCS has widespread a global reach by its product and services throughout its branches across the world includes in UK, U. S, Midsection east, Australia, European countries etc. (Tata Consultancy Services Small, 2010). This gives a diverse income base for the business to have an active control on its business businesses universally.

(2) Strong monetary performance: TCS has made apparent and strong financial presentations around the globe which makes its clients to be financially confident about the company and hence it will increase company's reputation.

(3) Strong brand name and understanding: As the reputation of the brand TCS (Tata consultancy services) has been reach around the globe which made TCS a reputed brand image in the Global information technology (IT) and software market sectors.

(4) Unique service Offerings: TCS offers a unique selection of services including business consulting; information technology, business process outsourcing (BPO), infrastructure, and executive which recognized them from opponents participate in IT industry (Tata Consultancy Services Limited, 2010).

(5) Worker Management Skills (HR Management Skills): The home base of TCS i. e. 'India' is well -known because of its skilled employees in IT field which effortlessly made TCS a very strong in HR management. TCS is also recruited its table of Directors are from overseas countries to be able to adopt the strategies from all the elements of the world.

(6) Innovation in lab system: TCS have most reliable infrastructures and impressive labs across the world with most modern technologies that assist its employees with an access to revise the most up-to-date information to make research in various IT related areas (Tata Consultancy Services Limited, 2010). This gives TCS an competitive border.

(7) Popularity of founder: Tata is recognised as the most renowned brand in Asia as well as the popularity of the creator Mr. Ratan J Tata also added value to TCS (Tata Consultancy Services Small, 2010).

3. 2 Weaknesses:

(1) Momentous promotion to financial markets:

The Excess coverage on the financial service marketplaces at a worldwide level (Datamonitor, 1998). Which generally necessitate to be keep confidential as they it shows company's private plans and legal conditions which is recognized as the primary & key weakness of Tata consultancy services (TCS)

(2) Insufficient concentrate on the domestic markets:

As per the effectiveness of TCS it has an Extensive Common reach by its product and services throughout it are all over the world branch which provides a diverse income base for the company. (Datamonitor, 1998). But at the same time domestic marketplaces are also influenced due to insufficient focus by the business. This is actually the key weakness of Tata consultancy services (TCS).

(3) Deficient in degree of consulting functions:

Lack in Effective consulting team which show a strong reflection of decline in the progress Cycle of the TCS, Being a company which mainly works on Freelancing on scale large jobs and assignment which generally requires a very good effective consulting team which works as the link between the Clients and company (Tata Consultancy Services Limited, 2010). TCS company is lacking behind in its level of consulting businesses.

Report to the Mother board of Directors

To,

The Plank of Directors,

Tata consultancy services Ltd.

Subject: Tips for the (TCS) business product.

Respected Board participants,

In the statement which is fastened along with a critical research and research has been done on the organization strategy accompanied by your company. The study and examination has been conducted by using various corporate strategy tools and methods and the business's past and current strategies have been highlighted.

On the foundation of the advantages and the weaknesses of these strategies we have stated so; following are the suggestions which I could generate after learning the strategies implemented by the TCS:

TCS should create specific value propositions aimed directly at the relevant stakeholders such as business professionals, IT personnel in order to boost your market placement in domestic markets.

The excess visibility on the financial service marketplaces which usually need to be kept confidential is recognized as the key weakness of TCS to allow them to should target more on increasing their IP (Intellectual Property) possessions in order to lower the momentous promotion to financial market segments (Tata Consultancy Services Small, 2010).

TCS can also go for isolation strategies with high quality services like IT solutions and focus on a distinct segment market.

In market Meltdowns (recession) marketing could work as a differentiator. TCS can transform its target from Low cost benefit to high quality services considering quality being pioneer in the (IT) industry.

TCS can provide diverse services to refrain from being over-dependent and increasing contact with the vulnerabilities of few sectors like USA.

TCS can choose ADM (Software Development and maintenance) system to increase value added services, BPO to Consulting and Package Implementation (Tata Consultancy Services Small, 2010).

Consolidation and tactical acquisitions are crucial for future development of earnings. The HP-EDS merger (one of the biggest ever before merger in this industry) is information to this. TCS should prepare for such opportunities that happen to be proper fit for the company.

TCS has rightly located SMB (Small and Medium Businesses) as another strategic unit, that ought to be centered aggressively. They should also focus talking to practice on the same business unit (Tata Consultancy Services Small, 2010).

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