Previously we studied the SWOT Analysis of Accenture, one of the world’s largest consulting firms. In this blog, we will do a SWOT Analysis of Capgemini.
Capgemini is a global leader in engineering and technology services, consultancy and digital transformation. They are a French Company providing multinational IT services and consultancy services. It has its headquarters in Paris, France and has more than 2 lakh employees in around 50 countries out of which around 1 lakh employees are from India.
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Let’s start with Capgemini’s past, founding, finances, services, and market rivals in this SWOT Analysis.
About the company
Capgemini SE or Capgemini was first started as enterprise management and data processing company and was founded by Serge Kampf on 1 October 1967 in Grenoble, France. Its Net Revenue is 1,584 crores EUR as per 2020 reports. The current CEO of the company is Aiman Ezzat.
Their vision is to work together to fit the needs of each business and develop the most adapted and adequate solutions fitting the customer’s requirements. They want to create and deliver such business and technology solutions that not only fit the customer needs but also drive the results they want.
|No. of Employees||270,000 (2020)|
|Market Cap||€36.22 Billion (2021)|
|Annual Revenue||€15.84 billion (2020)|
|Net Profit||€957 million (2020)|
Services of Capgemini
- Technology services
- Digital transformation
Competitors of Capgemini
Now that we are familiarised with the company, let’s dive into the SWOT Analysis of Capgemini.
SWOT Analysis of Capgemini
In SWOT Analysis we can understand the company’s strengths, weaknesses, opportunities and threats to the company. This gives us an idea of the reason behind the company’s success as well as tells us what opportunities lie in front of the company which may benefit it.
1. Strengths of Capgemini
Every company has its strengths which are the reason for its success as well as give a competitive edge against other companies in the same line of business. Here are some of the strengths of Capgemini.
- Technology – The main strength of the company is working with diversified technology, providing actual results to technology-oriented people. It tries to fill the gap between IT and business firms.
- Strong presence in Europe – Capgemini has a strong presence in the European market which has enabled the expansion of the right shore model. The Rightshore model has its main focus on cost reduction, streamlined processes, innovation, and the possibility of outsourcing IT operations.
- Strong leadership and solid values – For a company, its core values are its foundation. Capgemini’s core values like honesty with the customers, boldness, team spirit, trust and freedom are the basic moral and ethical values of the company which has propelled it in moving forward with integrity.
- Firm presence Internationally and in India – The Company has a strong global presence in about 50 countries as it has 145,000 employees working in their organization globally. It employs over 50000 people in India creating a strong presence in the country.
- Expertise – Capgemini has a lot of experience in the Public, Government, telecom, energy and utilities, manufacturing and finance sector making it an expert in these sectors.
- Strong Brand Portfolio – Capgemini has done a lot of investment in building its brand portfolio over the years which has helped the company while expanding and entering new sectors.
2. Weakness of Capgemini
Although Capgemini is a leading organization in the IT field it also has some weaknesses that act as hindrances. Some of the weaknesses are as follows:-
- No scope apart from core business – Even though Capgemini is a leading organization in the IT Sector, it faces a lot of challenges while moving to other domains because of its current work culture.
- Integration challenges – Everyone knows Campgemini’s acquisition behaviour. Even though it is successful in integrating small firms it faces a failure in integrating firms following a different work culture.
- The profitability ratio and Net Contribution – Although Capgemini is a leading organization in the IT sector it has a profitability ratio and Net contribution below the industry average.
- Expansion limitation – The structure of the organization is compatible and soothing only for the current business model and is a hindrance for expansion in nearby product segments.
- Not able to face new challenges – The challenges faced by the company as a result of entering into new sectors are not tackled properly resulting in loss of market share in niche categories. It should build a system of internal feedback starting from the sales team itself.
- Poor Marketing – The marketing strategy of Capgemini does not highlight its unique selling proposition and positioning which may act as a backlog for the company in terms of giving an advantage to its competitors.
3. Opportunities for Capgemini
Capgemini has a lot of opportunities for it, some because of external factors like government and economy and some because of the field it has chosen. The opportunities that it has have been listed below:-
- An important role in the current business – In the present business prospects, Capgemini plays an important role in main domains like networking, cloud computing which is a prominent area for the company to grow and excel.
- Collaborative Strategy – “Collaborative Experience” being a part of its strategy allows it to partner with other cloud computing leaders and allows it to adapt to new ecosystems.
- Internet – With the increasing number of internet users, Capgemini can design its marketing strategy to increase its online presence as well as to use the internet to interact with consumers. The growth in the sales of the e-commerce industry allows it to earn revenue by making sales through opening online stores.
- Inflation – As the inflation rate is low and is expected to be low for the upcoming two years it is an opportunity for the company as its cost of inputs will be below.
- Government Subsidy – Environmentally friendly products are not only beneficial for the environment but because of the current environment subsidy program, it can also benefit the business firms. Capgemini should make more of these products to avail of the benefits.
- Niche markets – Capgemini with an increase in niche markets should try to sell its products in its markets thus taking advantage of it.
- Globalisation – The increase in globalisation has allowed Capgemini not to be restricted to its own country and extend its operations to other countries and as well make the most out of the opportunities lying in those markets.
4. Threats for Capgemini
There are certain things about Capgemini which may act as advantages for the competitors and a threat to the company’s success. Some of them are mentioned below:-
- European market presence – They have a strong presence in the European market which is a big threat because they are undergoing economic disorder. This limits their business growth.
- Shortage of innovative products – The Company has developed many such products which are developed by the competitors too. Innovations are less frequent leading to highs and lows in sales.
- Competitive market – The IT market is competitive because there are many emerging players focusing on low-cost values.
- Seasonal Demand – The highly profitable goods are seasonal in nature and any unlikely event during the boom period may affect the profits of the company.
- Poor-quality products and Imitation of the counterfeit – The poor quality of the products and the imitation of counterfeit products are a threat to Capgemini’s products especially in low income and emerging markets.
- Environment regulations – New environmental regulations which are under the Paris agreement (2016) may act as a threat to certain product categories.
- Shortage of skilled workforce – The shortage of people that are skilled in some global markets may act as a threat for Capgemini for steady profit growth in those markets.
The company is a leading IT firm because of its strengths like technology, strong brand portfolio, expertise in certain sectors, a strong presence in the European market, Its presence internationally and in India and its work ethics. Though the above strengths make the company what it is today, there are also some weaknesses like no scope apart from the core business, lack of integration, low profitability and net contribution.
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