TATA CONSULTANCY SERVICES: SELLING CERTAINTY Harvard Case Solution & Analysis

TATA CONSULTANCY SERVICES: SELLING CERTAINTY Case Solution

1           INTRODUCTION:

The Tata Consultancy Services or TCS is an Indian Information Technology service provider that has an operational and business presence in multiple attractive regions of the world including the U.S. and Europe. It is the oldest and one of the most dominant IT services providing companies in the country in terms of revenues and operating margins that it annually generates from the markets where it operates.

It is a part of the Tata Group which is a listed entity at Bombay and the National Stock Exchange of India and this has also led it to build a strong and respectable image on the clients and customers of the company due to the positive reputation of the Group in the country and the offshore markets where the business operates.

The business offers and maintains a diverse service range for the customers and corporate clients in the markets where it operates

2           ISSUES:

There are several key issues and challenges for the present management of the company and the most critical issue for the management of the organization is to sustain the phenomenal growth rate of the company while also expanding the business in order to counter the increasing competitive environment in the IT industry. This is a major barrier for the business to achieve its target sales and revenues for the future as many global competitors of the company are entering and establishing themselves in the home market of the organization along with the local competitor firms who are also pursuing business aggressively.

3           ANALYSIS:

4           PORTER FIVE FORCES

The framework allows in providing a detailed insight regarding the operations of the company with respect to the industry in which it is operating in. The overall functioning of the company in the industry and the performance of the industry itself is analyzed through this framework.

4.1         BARGAINING POWER OF CUSTOMERS:

The operations of any company in any industry are directly affected by their customers only if the company is not operating in a business which is of a monopoly nature. The industry in which the company is functioning and continuing their business activities is highly competitive and the large number of IT companies is increasing their performance capacities in order to gain a higher number of customers in the market. Increased competition in the industry shifts the power towards the customers, it is mandatory for the company to maintain their standards in order to meet the needs of the customers. If the company fails to meet the customers’ needs, the customers are available with a number of available options to choose from and their switching costs are not a worry to the customers.

Developments in the IT sector require heavy amounts of investments and they cannot continue with their procedures of acquiring the best and innovative technologies without being funded sufficiently. The companies are more dependent over their customers as the funding which was previously being done by the USA are not enough. The financial crisis in the sector has drastically affected the operations of the companies in the industry as their innovating processes have reduced or slowed down. Due to the financial crisis, the dependency of the companies over their customer base has increased and now the companies are more inclined towards increasing their customer base. Therefore, it would be fair to conclude that the bargaining power of the customers is high in the industry. ..................

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