Tata Consultancy Services (TCS), is an Indian multinational company in the Public sector. It operates in the IT Services and IT Consultancy industry. Since being established in 1968 by Tata Sons, TCS has come a long way and has been throned as the world’s largest company in the IT sector by market capitalization of approximately $169.2 billion, even surpassing Accenture in May 2021.
Tata has become No 1 in the market due to its withstand of pressure from the competitors so to know better let’s take a deep dive into the SWOT Analysis of TCS. But before we commence, we first need to comprehend its history and business.
TCS was founded by Jamsetji Tata in 1848, TCS per se was established around 120 years later as a division of Tata Sons Limited. It has its headquarters in Mumbai, India. TCS operates its industry from different parts of the world. It has a large campus to enforce the work without any delay. Today, TCS has 58 subsidiaries, which together provide information technology products and services including business process outsourcing, application development, consulting capacity planning, enterprise software, software management, hardware sizing, payment processing, and technology education services.
Among listed Indian companies, it is the fourth-largest employer after Indian Railways, Indian Army, and India Post. As of 31st December 2019, TCS has a total of 446,675 employees.
The fact that TCS’ Net income is ₹32,340 crore (US$4.5 billion) (2021), Total assets are worth ₹130,759 crores (US$18 billion) (2021) and a single share is valued at 3,187.00 INR or $13.02 (as of 7 Jun, 3:30 pm) reflects its credibility, power and influence over the people. TCS’ products and services have set a benchmark for companies of its sectors, and its excellence has made it one of India’s most reputed institutions.
To maintain its organisation, any company does its analysis .i.e SWOT analysis so let’s take a deeper look into it.
SWOT Analysis of TCS
Simply put, SWOT stands for Strengths, Weaknesses, Opportunity and Threats, and SWOT Analysis is a method or technique of assessing these aspects of a business. As the definition suggests, it’s done to reduce the chances of failures, by understanding what the business is lacking, to make better decisions, exploring opportunities and so the business can run more efficiently, effectively, smoothly, as well as profit maximisation can be attained.
1. Strengths of TCS
- Brand Image – Without a doubt, TCS has built a brand, an image, a reputation of its own; it keeps its customers happy and serves as a symbol of eminence.
- Great command of the market – TCS has a great command of not only the Indian market but markets worldwide. It has a strong and loyal clientele.
- Brand backing – Backed by none other than TATA itself, TCS has a strong brand backing.
- Ethics – TCS is known for its excellence, and the customers would swear by its name and quality of products and services.
- Employee strength – Currently TCS has 488,649 employees worldwide.
- Clients from different sectors of the market: TCS has clients from different industries such as Banking, financial services, retail, telecom and media and entertainment etc. Thriving in diversified business industries lessens the business’ risks of being overly dependent on a single market sector or industry.
- Worldwide reach: TCS has smartly expanded in the major markets throughout the world including America, the UK, Africa and Asia-Pacific etc. Presence in diversified markets reduces the risk of the business and creates a strong image for TCS on a global level.
- Well established partnership network: TCS has established a strong partnership with global companies around the world. It has partnered with some tech giants such as Adobe, Dell, Amazon, HP etc. These companies add to their brand value, reach, and customer satisfaction.
- Strong portfolio of services: TCS has a strong and balanced portfolio of offered services.
2. Weaknesses of TCS
- It’s not that good in the product segment: While TCS is doing well by providing the best services, its products per se aren’t how one would expect from a brand as reputed as it. They do need some work.
- Legal battles: In 2014, TCS was involved in a legal battle against Epic Systems for allegedly misusing Epic System’s confidential information. In 2016, TCS was again found guilty and was ordered to pay damages worth $940 million. TCS has opposed the judgment and is challenging it to the higher jurisdiction. Such incidents harm the image of the company.
- The decline in Diligenta’s performance: Diligenta, which is a subsidiary of TCS has continuously not been performing well. The company is not expected to improve on performance soon and thus has a negative effect.
3. Opportunities for TCS
- Opportunities in emerging and product markets
- Business from existing clients – Perhaps, one of the best ways to keep the business flourishing, is repeated business from the presence of existing clientage.
- Digital technologies: With the world shifting to digital and hence business dynamics are also changing to the digital economy. TCS has been focussing on digitally transforming itself and providing digital solutions.
- Machine-to-Machine (M2M) solutions
- Enterprise Mobility market
4. Threats to TCS
- Employee loyalty
- Bigger MNCs – Bigger MNCs are entering India and are competing for global clients
- Immigration restrictions: With stricter immigration laws, increased H-1B visa fees and changing political circumstances in the US, Indian IT companies are expected to suffer from it as it will increase its costs and impact profitability, therefore this is a threat to the industry.
- Intense competition: The IT industry is subjected to intense competition from companies such as Infosys, Accenture, Wipro, Capgemini and Deloitte etc. This not only leads to pricing wars in the industry but also limits market share.
- High attrition rate
Hands down, TCS is performing diligently in its field. Its strengths are many, and all commendable. For a company like TCS with such a great brand image, brand backing, command in the market, portfolio, reach etc, just a little more work to tackle its weaknesses will be required and being more alert of the threats as well as by paying more attention to its strengths and expanding as well as adjusting even further for new opportunities, TCS will be able to keep its crown.
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