Busm-4306 Strategic Analysis

Executive summary:

The business environment has a profound impact on the company’s business operations and whether the firm will get success or become failed on the domestic or international market is determined by it. The majority of external factors are creating opportunity for Infosys. People in India, become tech savvy and company have a strong patent portfolio as well technological infrastructure. The economic condition of India is not good and it may create a threat for the firm to some extent. Infosys has sufficient financial and human resources as well technical resources which valuable and rare, but possible to be imitated by rivals. In the short run, rivals cannot imitate Infosys technological base. Hence, Infosys has competitive advantage over rivals.

INTRODUCTION:

Infosys is the one of the leading company in Indian IT sector. Recently, the company has acquired management consultancy firm Lodestone based in Switzerland. In the research report, business environment analysis is done and threat and opportunity that it creates for the firm is identified. Thereafter, VRIO analysis is done extent to which Infosys has a competitive advantage over rivals is identified. Finally, considering business environment and VRIO analysis recommendation section is prepared and conclusion is given.

Business environment:

• Political factors: Political environment of any nation has huge impact on the business firms. Countries whose Government prepare business friendly policies new start ups comes into existence at a fast pace. Every nation Central Government has some priorities and its work around it during entire tenure. Government taxation policy, excise duty or tariff charged etc. is some of the core factors that greatly affect business firm’s profitability (Saleem, 2015). More political party is supportive for the business firms it becomes easy for companies to operate in the nation and trade with the foreign nation. Central Government enters into the trade agreement with foreign nations and by doing so create ample opportunities for the firms. Company by acting on these opportunities increase business at a fast pace. Hence, political factors have impact on business firm’s growth in the nation. In India, the Central Government has consistently prepared business friendly policies and due to this reason mentioned nation jump in the ranking of the ease of doing business from 77 to 63. This attracts foreign investors to make investment in the Indian market and consequently IT firms and other company number will increase in the Indian market. Infosys an Indian IT company acquire Lodestone Holding which is based in Switzerland. Lodestone is basically a management consultancy company. Number of business and size of companies will increase in Indian market due to the optimum business friendly environment (Hampel-Milagrosa, Loewe and Reeg, 2015). This creates opportunity for Infosys as it can give management consultancy services to companies and can assist them achieve efficiency and effectiveness in their business operations. Infosys revenue will increase due to exploitation of such kind of opportunity.
• Economical factors: The economic condition of the nation and people desire to spend in the market and firm’s business performance is interlinked to each other. If economic conditions of the nation are not good, then in that case unemployment and inflation rate increased in the country. Due to rise in the inflation rate and unemployment rate peoples’ propensity to save increase and they tend to save more money. This directly led to decline in demand of the product in the market which directly affect firms revenue and business profit. In this way, the economic condition of the nation has a direct impact on the business firm’s profitability. The economic growth rate of India decline from 7% to 4%, which reflect that demand in the domestic market decline which affect firms’ revenue and demand of service (Sharma and Singh, 2015). This creates an opportunity and a threat both for Infosys. Due to a reduction in revenue firm may receive less IT projects from its clients which is a threat from the economic environment. In such situations, firms need to adopt specific strategies in their business so that even in a negative environment profitability can be maintained. In such kind of condition demand for management consultancy services increased. This creates opportunity for the Infosys to create new clients for its management consultancy segment in its business at rapid pace.

 

 

CONCLUSION:

On the basis of the above discussion, it is concluded that firms need to keep watch on the internal and external factors and must respond very fast if any change happened to them. This is because these factors create both opportunity and threat for the company. If it is an opportunity then by working on it firming can take first mover advantage. Resources must also be analyzed time to time so that they can manage in better way in the business. It is the resources that assist firm to remain competitive in the industry and remain ahead of rivals in the industry.

References:

Books and Journals

Das, A. 2019. Corporate governance in India. Routledge.
Garlapati, V. K. 2016. E-waste in India and developed countries: Management, recycling, business and biotechnological initiatives. Renewable and Sustainable Energy Reviews. 54. 874-881.
Hamilton, L.. and Webster, P. 2018. The international business environment. Oxford University Press.
Hampel-Milagrosa, A., Loewe, M.. and Reeg, C. 2015. The entrepreneur makes a difference: Evidence on MSE upgrading factors from Egypt, India, and the Philippines. World Development. 66. 118-130.
Kaur, H. 2016. Ease of doing business in India: A big ‘Unease’for ‘Make in India’programme. International Journal of Applied Research. 2(1). 697-702.
Khan, R. 2015. Small Hydro Power in India: Is it a sustainable business?. Applied energy. 152. 207-216.
Saleem, S. 2015. BUSINESS ENVIRONMENT, 3/e. Pearson Education India.
Sharma, M. K.. and Singh, M. K. 2015. Impact of Changing Socio-Economic Environment on Business in India. International Journal of Research. 21.
Sharma, V., Garg, S. K.. and Sharma, P. B. 2016. Identification of major drivers and roadblocks for remanufacturing in India. Journal of Cleaner Production. 112. 1882-1892.
Sinha, S.. and Panda, A. K. 2018. Corporate social responsibility in India. ZENITH International Journal of Business Economics & Management Research. 8(4). 97-106.
Online
Industries., 2020. [Online]. Available through:< https://www.infosys.com/industries.html>.
Infosys completes acquisition of Lodestone Holding AG., 2020. [Online]. Available through:< https://www.infosys.com/newsroom/features/2012/infosys-to-acquire-lodestone-consultancy.html>
Patents and trademarks., 2020. [Online]. Available through:< https://www.infosys.com/trademarks.html>

 

 

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