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6C StrategicManagement
6C StrategicManagement
6C StrategicManagement
Group 6c
Strategic Management
The IT and BPM sectors have emerged as major growth drivers for the Indian economy,
contributing considerably to GDP and public welfare. The IT industry accounted for 7.4% of
India's GDP in FY22 and is predicted to contribute 10% by 2025.
As creative digital applications infiltrate sector after industry, India is now ready for the next
stage of growth in its IT revolution. The rest of the world considers India to have one of the
largest Internet user bases and the lowest Internet rates, with 76 crore individuals currently
connected to the Internet.
Based on data from the National Association of Software and Service Companies (Nasscom),
the Indian IT industry's sales they reached US$ 227 billion in FY22, representing a 15.5%
YoY increase.
According to Gartner, IT expenditure in India is predicted to reach US$ 101.8 billion in 2022,
a rise from a prediction of US$ 81.89 billion in 2021.
The Indian software product business is estimated to generate $100 billion by 2025. Indian
enterprises are concentrating on overseas investment to broaden their worldwide reach and
improve their distribution centers.
In 2004, Wipro emerged as the second publicly traded Indian IT business to exceed $1 billion
in yearly revenue. Wipro de-merged its non-IT operations in 2012, becoming Wipro
Enterprises as a separate corporation. Prior to this restructuring, Wipro's varied businesses,
which included consumer care, lighting, and diagnostics, accounted for around 10% of total
sales. Wipro's American international headquarters were inaugurated in March 2023 at Tower
Center in East Brunswick, Middlesex County, New Jersey, demonstrating the company's
dedication to expanding globally.
Wipro, their goals and guiding principles through a well-defined vision, mission, set of
values, and company culture.
Vision: Wipro's vision goes beyond just being a successful company. They strive to be a
globally respected leader, recognized for providing best-in-class products, solutions, and
services. This ambition positions them as a trusted partner for their stakeholders, which
include employees, clients, investors, and the communities they operate in.
Mission: Their mission statement focuses on client success. Wipro aims to empower their
clients by offering a powerful combination of process excellence, high-quality frameworks,
and innovative service delivery. This translates to providing clients with the tools and support
they need to achieve their business objectives.
Wipro promotes a global mindset within its workforce. They believe in operating as
responsible global citizens, fostering a sense of environmental and social awareness.
Wipro emphasizes the importance of a respectful and inclusive work environment. This value
ensures that every employee feels valued and has the opportunity to contribute their talents.
Integrity is paramount at Wipro. They believe in conducting business with honesty and
transparency in all interactions.
Purpose: While Wipro's original vision aimed to contribute to a global information society,
their current purpose seems to have evolved with a stronger focus on client success and
driving innovation.
Culture: Wipro fosters a work environment that is collaborative. They believe in a
meritocratic system where employees are recognized and rewarded based on their
contributions. Additionally, continuous learning is highly encouraged, ensuring that Wipro's
workforce stays at the forefront of the ever-changing technological landscape. This focus on
collaboration, meritocracy, and learning, coupled with a global outlook and social
responsibility, shapes Wipro's unique culture.
Offerings by Wipro
It earned global acclaim for its different services and serves clients on six continents
worldwide. It also boasts an impressive 180,00 employees. It was included in Bloomberg's
Gender Equality Index in 2020 and achieved a 90/100 rating on the 2020 Corporate Equality
Index. In 2019, it earned Pivotal Software's Global Breakthrough Partner of the Year award,
as well as the NASSCOM Diversity and Inclusion Awards' Gender Inclusion category. It was
also named one of the Best Companies for Women in India (BCWI) for 2019.
It was the first runner-up in the United Nations Global Compact Network India (UN GCNI)-
Women at Workplace Awards 2019, among other accolades.
The company offers the following services:
IT Services: Wipro’s IT services encompass digital transformation, cloud computing,
cybersecurity, artificial intelligence and analytics, enterprise applications, infrastructure
services, blockchain, and the Internet of Things (IoT).
Consumer Care and Lighting: Under this umbrella, Wipro serves consumer care products,
health and wellness, lighting solutions, smart home automation, customized solutions, and
sustainability initiatives.
Engineering: These services include product design and development, mechanical
engineering, electrical and electronics engineering, software engineering, system engineering,
quality assurance and testing, digital twin and IoT solutions, and industry-specific solutions.
Infrastructure Services: Herein, Wipro offers data center services, cloud services, network
services, end-user computing, IT Operations Management, security services, managed
services, and digital workplace solutions.
Consulting Services: With this, the company offers strategy consulting, digital
transformation, technology consulting, business process improvement, organizational change
management, supply chain and operations consulting, risk and compliance consulting, and
industry-specific consulting.
Wipro has experienced considerable problems meeting its growth ambitions under the
leadership of CEO Thierry Delaporte. Despite ambitious intentions to accelerate expansion
through acquisitions and huge transactions, Wipro has faced a number of setbacks, resulting
in missed revenue predictions and diminishing performance. This case study investigates the
elements that contribute to Wipro's development issues and evaluates viable solutions to
them.
Wipro appointed Thierry Delaporte as CEO in 2020 to accelerate development and reclaim
its competitive position in the IT services sector. Delaporte's approach revolved around two
main pillars: acquisitions and significant transactions. Wipro's $1.4 billion acquisition of
London-based consultancy firm Capco intended to increase its foothold in the financial
services sector and broaden its service offerings. Furthermore, landing high-value
transactions, such as the $700 million contract with German wholesaler Metro, was expected
to boost Wipro's revenue and market competitiveness.
Financial Analysis
Wipro encountered challenges driven by weak demand and sectoral fluctuations during the
medium term, impacting its financial performance in Q2FY24. The uncertainties prevailing
in the near term clouded the visibility of services, leading to a slowdown in large client
accounts. Decision-making delays and limitations in ramping up new deals due to uncertain
macroeconomic conditions hindered execution capabilities. However, despite these
challenges, new deals exhibited resilience, suggesting potential for a quicker recovery in the
medium to long term.
Industry life cycle stage and timing of entry into the industry
The Indian IT industry is likely to be in the maturity stage of its life cycle. That is evident
because of the following nuances:
Market Maturity is evident through facts like:
The Indian IT industry has established itself as a global leader with over $250 billion
in revenue, which signifies that it is a well-developed market and saturated.
There is a slowdown in traditional exports, which indicates market saturation in some
areas. The industry is adapting by focusing on the domestic market and higher-value
services like R&D.
Indigenous companies are facing competition from companies from other countries, and
automation
Current Scenario:
The industry is expected to reach $253.9 billion, reflecting a slower growth rate
(3.8%) compared to previous years.
Reasons for slow Growth are Macroeconomic headwinds (global economic
slowdown), geopolitical tensions,
Impact on Segments:
Software services exports (a major revenue source) are affected by the slowdown in
Western markets (North America, Europe).
The domestic market is showing the fastest growth, indicating some resilience.
Positive Signs:
Growth in the R&D (engineering, research, and development) sector, exceeding
expectations.
Global Capability Centres (GCCs) in India are gaining traction, with their scope
expanding beyond back-end work to include R&D and innovation.
Increase in large deals, even with fewer overall deal closures.
Future Outlook:
The tech industry is projected to add $9.3 billion in revenue across various segments.
The domestic market is expected to contribute a larger share ($54.4 billion) with a
growth rate of 5.9%.
Enterprise client tech budgets are predicted to increase in 2024, especially in
previously underperforming sectors like Hi-Tech, BFSI (banking, financial services,
and insurance), and TMT (technology, media, and telecom).
Wipro entered the IT industry during the 1980s with the launch of its information
technology services, which aligns with the early growth stages of the Indian IT sector—this
period marked a surge in interest in information technology, with the rise of personal
computers and the increasing adoption of computing solutions by businesses. Wipro's foray
into IT positioned them well to capitalize on this growing market and become a key player in
the industry's development.
Wipro, one of the leading global information technology, consulting, and business process
services companies, has several competitive advantages that contribute to its success in the
market:
1. Global Presence: Wipro has a strong global footprint with operations in over 50 countries.
This global presence enables it to serve clients across various industries and geographies,
providing localized solutions and support.
2. Diverse Service Offerings: Wipro offers a wide range of services including IT consulting,
system integration, application development and maintenance, infrastructure services,
business process outsourcing, and digital transformation solutions. This diversified portfolio
allows Wipro to cater to a broad spectrum of client needs, making it a one-stop solution
provider.
Wipro seems to be increasingly emphasizing inorganic growth in recent times. This could be
due to a desire to accelerate their growth strategy and address any skill or service gaps in
specific areas.
External Analysis
PESTEL Analysis
Wipro Limited PESTEL analysis is a strategic tool to analyze the macro environment of the
organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental
& Legal factors that impact the macro environment of Wipro Limited.
Political Factors:
Political stability and importance of the Information Technology Services sector in the
country's economy.
Risk of military invasion or political unrest.
Level of corruption and regulatory environment in the technology sector.
Government interference in the Information Technology Services industry.
Legal framework for contract enforcement and intellectual property protection.
Trade regulations, tariffs, and favored trading partners.
Anti-trust laws and pricing regulations.
Taxation rates, incentives, and wage legislation.
Industrial safety regulations and product labeling requirements.
Economic Factors:
Social Factors:
Technological Factors:
Internal Analysis
VRIO Analysis
Wipro Limited employs VRIN/VRIO analysis to systematically evaluate its internal resources
and capabilities. This analysis focuses on identifying resources that provide a sustained
competitive advantage by assessing their Value, Rarity, Inimitability, and Organizational
characteristics.
Valuable Resources:
Financial resources: Valuable for investing in external opportunities and combating threats.
Local food products: Highly differentiated, valued more by customers than competitors.
Employees: Highly trained and loyal, leading to greater productivity and consumer value.
Patents: Enable selling products without competition and generate licensing revenue.
Distribution network: Facilitates reaching more customers, ensuring greater revenues.
Cost structure: Not valuable, as production methods lead to higher costs than competitors.
Research and development: Not valuable, costing more than it benefits in innovation,
recommending improvements and cost-cutting.
2. Relationships with Suppliers
Wipro has established a robust distribution network globally, supported by close ties with
distributors and suppliers. These relationships are built on stringent standards, enabling Wipro
to efficiently penetrate new markets and regions.
Innovation
Wipro's commitment to innovation sets it apart in the market, allowing the company to offer a
diverse range of products and services worldwide. This innovation not only drives revenue
growth but also enhances the company's global recognition and cultural exposure.
Access to Capital
As a large conglomerate, Wipro can access capital internally, giving it the financial flexibility
to pursue strategic expansions and acquisitions. This access to capital strengthens Wipro's
market position and facilitates its growth initiatives.
3. Rare
Wipro possesses rare assets such as its extensive international presence and strong problem-
solving skills. These assets provide the company with a competitive edge, bolstering its
financial resilience and adaptability in the face of market challenges.
Risk-taking Capabilities
Wipro's calculated approach to risk-taking is integral to its growth strategy, allowing the
company to venture into new markets and seize emerging opportunities. This capability
enables Wipro to make informed decisions, fostering sustainable business expansion.
Adaptability
Wipro's adaptability to diverse cultural contexts enhances its market penetration and brand
visibility. By striking a balance between global standards and local preferences, Wipro
effectively navigates international markets, reinforcing its competitive position.
4. Inimitable
Wipro's offerings, pricing strategies, and customer experiences are difficult for competitors to
replicate. These unique attributes not only differentiate Wipro in the market but also
contribute to its long-term success and sustainability.
Competitive Price
Efficient operations and cost-saving measures enable Wipro to maintain competitive pricing,
leveraging economies of scale to enhance its market share and profitability.
Customer Experience
Wipro's focus on delivering exceptional customer experiences fosters brand loyalty and
enhances its market reputation. By engaging customers across multiple touchpoints, Wipro
creates lasting connections that drive repeat business and brand advocacy.
5. Organization
Wipro's organizational strengths, including financial stability, technological prowess,
employee training, and supportive culture, collectively underpin its competitive advantage.
Additionally, investments in R&D, distribution channels, corporate leadership, manufacturing
capacity, HR, and marketing strategies further strengthen Wipro's market position and ensure
its sustained growth and success.
SWOT Analysis
Strengths
Low Cost Advantage and High Quality Standards: Wipro Technologies maintains competitive
pricing while upholding high-quality standards, giving it an edge in the market.
Broad Range of Research and Development Services: The company offers diverse R&D
services, keeping it at the forefront of technological innovation.
Impressive Clientele and Strategic Partnerships: Wipro has strong partnerships with industry
giants like Cisco, Oracle, and Microsoft, bolstering its credibility and market presence.
Leading IT Company in India: With over 130,000 employees, Wipro is one of India's top IT
companies, providing extensive service delivery capabilities.
Weaknesses
Low Operating Margin: Other group companies have lower operating margins, affecting
overall profitability.
Limited Free Floating Stock: Restricted availability of free-floating stock limits investor
participation.
Opportunities
Industry Growth: With the sector expanding, Wipro has ample opportunities for further
growth.
Diversification: Wipro can explore diversification into new product categories and consulting
services.
Domestic Market Potential: There is significant untapped potential in the domestic market for
Wipro.
Threats
US Economic Slowdown: A slowdown in the US economy, where Wipro's major client base
is located, could impact revenue.
Attrition and Employee Loyalty: High attrition rates and challenges in retaining talent pose
threats to operational efficiency.
Rising Human Capital Costs: Increasing costs associated with human capital could affect
profitability and competitiveness.
References
(https://www.statista.com/topics/2256/it-industry-in-india/#topicOverview)
(https://ensureias.com/blog/information-technology-sector-of-india)
(https://www.fincash.com/l/brand/wipro)
(https://www.bizzbuzz.news/technology/wipro-bets-big-on-inorganic-growth-1133609)
https://economictimes.indiatimes.com/tech/information-tech/my-commitment-to-premjis-
and-to-the-board-that-this-company-will-be-profoundly-transformed-wipro-ceo-thierry-
delaporte/articleshow/100748861.cms?from=mdr)