Introduction and Overview of Infosys.
Infosys was founded in 1981 by Narayana Murthy and his six colleagues, they shared a vision of providing “a fair deal to the stakeholders: shareholders, employees and customers alike” (Evans & Barsoux, 2002, p.61). Infosys’ vision was to regain the top position for the Best Employee and Best Performer Company by 2007 (Delong, 2006). The head of HR leadership Hema Ravichander recognized that Infosys had some HR problems: From 1981-1991, Infosys had only one client and the organization was almost dissolved because of the bureaucratic and regulated Indian environment. Murthy was able to save the organization by energizing the rest of the co-founders (Delong, 2006). In 1991, Infosys shifted its focus from “Body-Shopping to Off -shoring” (Delong, 2006, p.4) at the same time India was facing economic liberalization. Infosys introduced off- shore development Center known as ODC and also introduced Global Delivery Model (GDM) which is a project management system. GDM afforded the organization to divide each project into components that was executed “independently and concurrently” at client site from remotely development centers.
Moving up the IT Chain
The organization traditionally concentrated on the lower end of IT value chain from 2000-2004, this shifted to higher value IT services in order to obtain the competitive advantage. Value chain offers organizations ways to improve value to its customers; it can also be defined as generic strategies of differentiation and cost leadership (O’Connell, 2010).
Infosys through GDM moved up the value by offering process innovation on its value chain, it takes the work, project or job to the p...
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...rovide a road map, direction and focus, establish measures, set priorities and encouraged innovation and change in a country where change is most difficult (Zuckerman, 2005).
Works Cited
References
Delong, T.J.(2006). Infosys (A): Strategic Human Resource Management. Harvard Business
School.
Evans, P., Pucik, V. & Barsoux, J.L. (2002). The Global Challenge- Frameworks for
International Human Resource Management. McGraw Hill Companies.
Gomez-Mejia, L.R., Balkin, D.B. & Cardy, R.L. (2004). Managing Human Resources. (4th.ed.).
Pearson International Edition.
O’Connell, P. (2010). How Infosys Leads the Way in Leadership. Businessweek Online.
Retrieved on March 8, 2010 from MasterFILE Premier. EBSCO.
...sion of its plants, which resulted in an increase in production and a greater number of employees. This required the communication of too much technical detail, where it would be impossible to interact without changing their business environment. The solution to this fourth revolutionary stage is to move towards more collaboration.
The series of activities that are enacted by a firm that add value to a product beyond the cost of the production are referred to as the value chain. Harley Davidson offers a combination of superior performance and unique attributes within its value chain that promotes their core competencies and provides them with a competitive advantage.
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
To get started, we first need to understand what Crocs' value chain is and how that process plays a role in the strategic direction of the company. The authors of our text, views the value chain as "the entire series of organizational work activities that add value at each step, from raw materials to finished product. In its entirety, the value chain can encompass supplier's suppliers to the customer's customers"(Robbins & Coulter, 2009, p.430). At Crocs, the entire series of organization work activities may be broken down even further using Porter's value chain model of viewing a manufacturing (or service) primary and secondary activities as a "system made up of subsystems, each with inputs, transformation processes and outputs"(Ifm.eng.cam.ac.uk, 2011). A diagram, compliments of Porter(1985) can be seen below:
The market for IT industry was huge and expanding at a fast pace. However the market leaders were Accenture and IBM which had a negligent market share and rest was captured by small enterprises. Indian companies also ventured in the industry and due to their competition, IT multinational giants had to increase their base in India. Due to high opportunities, attrition rate was also high in this industry. As a result Indian companies like Wipro, Infosys increased their base level salaries. During this phase, Indian economy was transforming towards an era of information and knowledge. This can be seen from the fact that contribution of services towards the economy’s GDP was higher than 18% in 2001 as against in 1980. No other industry had done better standing against global competition. The annual exports had always been over 50% over a decade. U.S.A. share represents highest with 61% and about a third of Fortune 500 companies outsource their software work to India. To foster development, Indian government has taken a number of steps like liberalization of policies and providing necessary capital and infrastructure to foster growth. Thus Indian environment has been conducive for growth. (Ref: Indian Embassy.org) Competitor analysis- The market for IT industry was fairly competitive with IBM and Accenture as global leaders and rest of the market was pretty diffused. IBM and Accenture had strong brand and a global presence with a large customer base. They also offered panoply of services viz. technology implementation, business consulting, offshore services, customer relationship management etc. Both offered breadth and depth of services. IT market in India offered technical and business consulting with Tata Consultancy Services which was the market leader in IT exports and Wipro Technologies and Infosys being other major market players. TCS offered consultancy services, IT services, asset based solution etc. Wipro was third largest IT provider with service offerings in IT consulting, software solutions, BPO etc. Both had a strong global presence. Intensity of Rivalry: Rivalry amongst competitors was pretty intense as can be seen the Indian competition caused IBM to increase their presence in India. However leaders like IBM and Accenture had a wide range of service offerings so competition was only amongst few sectors. Rivalry was to hire the top talent as human capital is the most important thing in the IT sector. This is the reason that attrition rate lead to a rise in pay packages.
The value chain is a systematic approach to examining the development of competitive advantage. The Google's chain consists of a series of activities that create and build value, the mission is to organize the world's information and make it universally accessible and useful. Innovations in web search and advertising have made the web site a top internet destination and Google brand is one of the most recognized in the world.
In the previous part of our work we were talking about Porter’s value chain of McDonald’s fast-food restaurant. It is known, that before making a statement about competitive priorities, the company should know the objectives of the operation. Is it customer oriented? Does it cover shareholders’ and suppliers’ interests? However, now we consider that McDonald’s has taken into account all of the interests of business environment.
Value creation means the performance of the product and services that creates value in the eyes of customer. Value creation is big role in the profitability in the shape of profit or revenue that depends on the supply chain partners which they create value at each level. How they provide value added services to them and play a vital rule to enhance value for customer. Further in 3PL industries only limited function perform by the partners so that’s why value creation is big problem but on the other hand 4PL is a solution of complete supply chain process which supported by the value creation. Further, with the help of value creation framework firm increase its cash flow, reduce cost, increased profitability or growth rate. Value creation and enhancement: back to the future (Aswath Damodaran).
For instance, Harley Davidson may be forced to change their marketing strategy due to the entrance of a new competitor into the market. Second, Harley Davidson has to learn new skills and technologies quickly. For example, technologies are changing rapidly, so it is crucial for Harley Davidson’s business plan to change or alter in order to keep up with innovation. Third, this organization has to effectively leverage its core competencies while competing with its competitors. This is, Flexibility is required for Harley Davidson to learn how to use primary value-chain activities and support functions in the way that allow the organization to produce their products at a lower cost with differentiated features compare to their competitors in the market
Value chain analyses a firm 's internal activities such as planning, production, and development, packaging and distribution so as to create value for clients. The function of the value chain is to identify the sources for cost reduction along with quality improvement. It means value chain is used to identify the strong and weak points, positive and negative points, the scope of improvement; in a nutshell, the advantages and disadvantages of the activities taking place in the system. The value chain is also called as a strategic analysis tool and it is a well-known concept in business management industry.
Value chains are essential elements of successful businesses, and how to gain a competitive advantage by analyzing them is the most important aspect. In Porter’s value-chain model, he points out that there are two types of business activities: primary activities, which include inbound logistics, operations, outbound logistics, marketing, sales and service; and support activities, which include procurement, technology development, human resources management, and firm infrastructure. In order to gain an edge, companies should focus on these activities to improve or create products that will satisfy their customers.
Value has different aspects which include company values; which relates to new innovations, job growth, reducing costs, as well as long term production and so forth. Value must meet customers’ needs which they benefit from the product or service.
Explain how the company’s value-chain activities can be better linked to create value for the company.
Porter argues that no firm can provide value in all the ways that people wish value to be delivered, so they should select one strategy; cost leadership, differentiation or focus. (Robbins & Barnwell, 2002)
Olav Jull Sorensen (2009): “Formation, Organisation and Management of the (Global) Value Chain I a Theoretical Perspective”