Previously we analysed the SWOT Analysis of Accenture, one of the world’s major consulting firms. In this article, we will look at the SWOT Analysis of TCS.
Tata Consultancy Services (TCS) is a subsidiary of “Tata group” and one of India’s most renowned multinational conglomerates operating in 46 countries with 50 subsidiary businesses. TCS momentarily surpassed Reliance Industries and Accenture in market value on January 25, 2021, to become the world’s most valuable IT firm.
TCS’s marketing efforts have also aided the company’s current status as a powerhouse. Marketing is evolving as the world moves online, and if you want to learn about the newest – check out Free MasterClass on Digital Marketing Fundamentals taught by Karan Shah, the CEO and Founder of IIDE and gain insightful knowledge on Marketing.
Tata has risen to the top of the market as a result of its ability to endure competitive pressure, so before we begin with the SWOT Analysis of TCS, let’s learn about the company, its finances, services, and competitors.
TCS was formed on April 1, 1968, as a branch of Tata Sons to build demand for downstream computer services. Jamsetji Tata established it, and it is now one of India’s most esteemed firms. TCS now has 50 companies that offer information technology goods and services such as business process outsourcing, application development, consultancy capacity planning, enterprise software and more.
As the Indian financial system continued to expand in the twenty-first century, the need for technology to restrict extensive augmentation became part of the national blueprint. TCS, which had been investing more time in domestic IT from its inception, was ideally positioned to help the National Government at the federal and state levels in its innovative initiatives.
TCS created a digital distribution system on its own initiative as an expression of the company’s pioneering attitude and with the goal of spreading the advantages of the IT upgrade across the country. TCS’s ability to deliver high-quality overhauls and resolutions is unrivalled.
|Founder||J. R. D. Tata, F. C. Kohli|
|No. of Employees||509,058|
|Market Cap||$173.00 Billion|
|Annual Revenue||$22 billion (2021)|
|Net Profit||$4.3 billion (2021)|
Products and Services of TCS
Following are the products and services TCS sells –
- IT services and consulting,
- Outsourcing and BPO
- Software Products
- Business solutions
- TCS MasterCraft
- TCS Bancs
- TCS iON
- Intelligent Testing System
- Test Automation Manager
Competitors Of TCS
Below are the top 5 opponents of TCS –
- Infosys Limited
- Wipro Limited
- Cognizant Technology Solutions
- Computer Horizons Corp
Now that we’ve established the firm’s core business, let’s delve into the SWOT Analysis of TCS.
SWOT Analysis of TCS
SWOT analysis is a structured approach to evaluate a company’s strategic position by analysing its strengths, weaknesses, opportunities, and threats. It is a simple technique to analyse the outcomes of a marketing evaluation. The SWOT analysis of TCS are as follows:
1. Strengths of TCS
Strengths are an organization’s distinct skills that offer it a competitive edge in gaining greater market share, attracting more customers, and maximising profitability. TCS’s strengths are listed below:
- Extensive Global Reach – TCS’s global reach, which currently extends from North America, the United Kingdom, Africa, Europe, and the Asia-Pacific regions, reflects the company’s efforts to obtain as much coverage as possible in diverse areas. TCS has a strong worldwide image thanks to its presence in a variety of geographical locations.
- Major number of Customers from various sectors – TCS supports customers in a wide range of industries, including banking, finance, retail, telecommunications, and media & entertainment. Exposure to different enterprises mitigates the hazards of over-dependence on a particular market or industry.
- Strong reputed Brand Image in the market – TCS has unquestionably created its own brand, image, and reputation; it keeps its consumers satisfied and acts as a sign of excellence.
- Well established strategic alliances – TCS has formed significant alliances with multinational companies all around the world. It collaborated with technology powerhouses such as Amazon, Adobe, Dell, Bosch, and HP, among others. Through these partnerships, TCS provides both technologically viable and creative commercial and tactical solutions.
- Robust Service Portfolio – TCS has a diverse service offering that includes application development and maintenance of Business Process Services (BPS), IT infrastructures, business intelligence, and more. A robust and diversified portfolio is drawn to various corporate clients.
- Empowered and encouraged employees – Through effective training and learning initiatives, a highly competent workforce has been created. TCS invests heavily in employee training and development, resulting in a staff that is not just highly competent but also driven to achieve greater success.
- Excellent returns on capital invested – TCS has an excellent track record of executing new projects and generating good returns on capital expenditure by establishing new income streams.
2. Weaknesses of TCS
Weaknesses are elements of a company or brand that need to be improved. The following are TCS’s significant flaws:
- Performance of Diligenta deteriorated – Diligenta, a TCS subsidiary, has consistently performed poorly. TCS’s bottom line is unlikely to improve rapidly as a result of the enterprise’s poor performance and hence has a negative effect.
- Legal Squabbles – TCS filed a lawsuit against Epic System in 2014 for suspected abuse of private information. TCS was found guilty in 2016 and was charged $940 million in damages. TCS objected to and rejected the higher competence’s decision. Such incidents have a negative impact on the company’s image.
- The product segment is not relatively impressive – While TCS does well by delivering the greatest services, its products aren’t what one would anticipate from a company of its kind. They do require some effort.
3. Opportunities for TCS
Opportunities are possible areas of emphasis for a firm to focus on in order to enhance outcomes, boost sales, and, eventually, profit.
- Emerging Interest in Cloud Computing – Digital technologies and high-speed internet access have evolved. In fact, spending on cloud services will rise at a CAGR of 19% over the next five years. Society is shifting towards cloud-based solutions. TCS has a robust cloud-based infrastructure and is thus prepared to capitalise on the created demand.
- M2M Solutions – Wireless and cable communications systems are both enabled by Machine to Machine (M2M) solutions. There are bright possibilities for M2M solutions in the future, and revenues are projected to be substantial. TCS offers a comprehensive variety of M2M services, allowing the need for M2M solutions to be met.
- Transformation of the Digital Universe – Because the world is becoming more digital, business forces are altering the digital economy. TCS’s primary goal is to digitally transform and deliver digital solutions. TCS could expect more expenditure on technology for digital transformation.
- Solutions for mobility – With a rising mobile worker population and the increased usage of sophisticated mobile devices, enterprise mobility solutions are expected to be driven by business applications. The demand for mobility solutions is latent and is expected to grow at a CAGR of 24.7 per cent through 2022. TCS is well-positioned to profit from its increased emphasis on the development of enterprise mobility solutions.
4. Threats to TCS
Threats are environmental elements that might have a negative impact on a company’s success. TCS’s threats include the following:
- Competition is fierce – IT firms such as Infosys, Wipro, Capgemini, Deloitte, Accenture, and others confront fierce rivalry. As a result, the industry is experiencing price wars and has a restricted market share.
- A high rate of attrition – The Indian IT sector has a high rate of turnover, which raises the expense of providing new workers with skills and leadership development and has a negative impact on the company’s reputation.
- The Constraints on Immigration – With immigration regulations, increasing H-1B visa fees, and changing political situations in the US, Indian IT firms are anticipated to suffer as they increase their costs and damage profitability, posing a risk to the sector.
- Large multinational corporations – Large multinational corporations are expanding into India and competing for a worldwide clientele.
TCS is unquestionably the best in its industry. It has numerous and noteworthy strengths. For a company like TCS with such a great brand image, brand backing, market command, portfolio, reach, and so on, it needs just a little more work to address its weaknesses and be more alert to threats. If TCS pays more attention to its strengths and expands as well as adjusts even further for new opportunities, TCS will be able to keep its crown.
We also discovered in this SWOT Analysis of TCS that the firm is significantly reliant on its customers and has great brand recognition and trust. Considering the rising competition in a competitive field like IT, firms have to compete for their customers through improved marketing efforts.
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