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
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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.
• Analyzing the value chain of the McDonald’s Corporation to determine where they can create using resources, capabilities, and core competencies, which have been discussed above.
In a high competitive world market and with the increasing rational buyers a company can only win by creating and delivering the best customer value than the others competitors do. To succeed, a company needs to use the concepts of value chain.
Every company in any industry consists of collection of activities that help the company to create value for their customers, these collection of activities celled “ value chain”. The value chain has two types of activities: the primary activities and costs, and the support activities and costs. We will explain both of them that are related to Nintendo.
This perspective is concerned with the exploitation of emerging IT capabilities to impact new products and services (business scope), influence the key attributes of strategy (distinctive competencies) and develop new forms of relationships (business governance).
Value chain model highlights specific activities where the information systems could be applied. This model is set to identify leverage points in which IS could have a strategic impact to enhance company’s competitive position. The value chain perceives firm as a series of interconnected activities that add a margin of value.
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.
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.
Before explaining the advantages that a value chain can offer, it is important to first identify the value chain itself. According to Stabell and Fjeldstad (1998) Porter's work on VCA began by disseminating an organization's activities into two categories, primary activities and support activities (See Figure 1):
Naumann, E. (1995). Creating Customer value: The Path to Sustainable Competitive Advantage. Cincinatti: Thomson Executive Press.
Though the 4Ps approach has been working for companies for years, it became less effective as the market has developed. This happened due to the fact that product, price, place, and promotion do not include all the activities that are related to marketing a product. As a result, a more efficient approach was developed - the value approach.
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 aim of the value chain structure is to maximize the value creation while minimizing costs. Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your customers. Value chain analysis relies on the rudimentary economic principle of competitive advantage -companies are best served by operating in divisions where they have a relative prolific benefit compared to their competitors. Concomitantly, companies should ask themselves where they can deliver the paramount value to their customer. To conduct a value chain analysis, the company begins by identifying each part of its production process and recognizing where steps can be purged or enhancements can be made. These improvements can result
By adopting the value chain into a manufacturing company, it will gain efficiency, effectiveness, reduce the product cost and improve continuously. For example, Toyota has implemented Toyota Product System (TPS) integrated information system with the business process which allowed the company to be more efficiency, effectiveness and reduce inventory cost. (Toyota