Mir Raashid Nazir

Course Code: MGN 578 Course Title: International Business Environment

Course Instructor: Dr. Pretty Bhalla

Academic Task No.: CA - 3 Academic Task Title: TCS in USA

Date of Allotment: 26 - 08 - 2019 Date of submission: 18 – 09 - 2018

Student’s Roll no: A – 05 Student’s Reg. no: 11700247

Learning Outcomes:

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other
students work or from any other source except where due acknowledgement is made
explicitly in the text, nor has any part been written for me by any other person.

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 INTRODUCTION:

Tata Consultancy services Limited:

Tata Consultancy Services Limited (TCS) is a subsidiary of the Tata Group, an Indian
information technology consulting and business solutions company which operates in 46
countries worldwide. TCS Limited was founded in 1968 by a division of Tata Sons Limited. Its
early contracts included punched card services to TISCO (now Tata Steel), working on an Inter-
Branch Reconciliation System for the Central Bank of India. In 1975 TCS made an electronic
depository and trading system called SEMCOM for Swiss company. TCS also established
India's first software research and development centre called Tata Research Development and
Design Centre in Pune, Maharashtra. On 25 August 2004, TCS became a Publicly Listed
Company. Some important aspects related to TCS are mentioned below.

 TCS is one of the largest employers of women with 35.3% of women employees.
 TCS became the first Indian IT company to reach $100 billion market capitalization with a
value of $102.6 billion in Bombay Stock Exchange and a second Indian company ever after
the Reliance industries that achieved the same in 2007.
 TCS is ranked 10th on the Fortune India 500 list in 2018.
 It is the world's 9th largest IT service provider by revenue.
 TCS is ranked 64th overall in Forbes World's most innovative company ranking, making it the
highest-ranked IT services company ever.
 In the latest, TCS, the biggest software services company, has added 12,000 jobs in the first
quarter of 2019 and sent offer letters to 30,000 fresh graduates building the employment level
in the country.

Tata Consultancy services USA:

TCS has a 40-year history in North America, working with its first American clients in 1974
and opening its first office in New York in 1979. Tata Consultancy Services (BSE: 532540,
NSE: TCS), a leading IT services, consulting and business solutions organization, was ranked
as the 57th leading brand in the US by Brand Finance® in its second annual Top 500 US Brands
survey, which evaluates the financial value of a company’s brand name, intellectual assets and
trademark, as compared to companies across industries. TCS was recognized as a top four IT
Services brand in the US – the same as its global ranking – and has a AA+ score for its brand
strength, the sector’s highest designation. Globally, TCS’ brand value grew271% from US $2.3
billion in 2010 to US $8.7 billion in 2015, marking the fastest grood.
In Canada, TCS
has been present for more than 20 years, serving its first client in 1991. These customer
relationships span all 50 U.S. states, including the District of Columbia and Puerto Rico, and
coast-to-coast across Canada. TCS has a significant and growing presence in North America,
with over 30,000 employees working in 450 work locations. It is the world’s second largest IT
services and consulting organization in terms of market capitalization, and continues to invest
in new facilities, local talent and innovation

Products and services of Tata Consultancy services:

Services:
Information Technology Consulting, IT services, Outsourcing, BPO, Software

Products:
TCS Bancs, Digital Certification Products, Healthcare Management Systems.

FINANCIAL STABILITY:

TCS financially persists to demonstrate the steady stand in the top position of Indian IT firms.
As the IT outsourcing market records more rapid growth pace, TCS expressed a steady growth
rate in 2008-09, whose consolidated revenue grew by 23% to 27% which helped TCS to cross
the $6 billion revenue milestone. TCS operating margins improved to 23.73% by 109 basis
points. TCS have also increased its dividend share to Rs.14 in the last financial year. The TCS
directors have also recommended an issue of bonus shares in 1:1 ratio and it was the second
bonus issue since 2004. TCS completely focused in helping their customer’s relationship with
them simultaneously adding fresh customers and penetrating in novel market segments and
emerging verticals which made them to add 163 new customers internationally in the past year.
TCS’s foremost market North America crossed new high point of revenue above $3 billion and
grew 26% in 2008-09 in spite of recession, While Europe’s branches faced a express growth
of 38.5% during the same year. It is very significant for an organization to certify the
differentiation of its revenue stand and to uphold its augment impetus.TCS always delivers that
the 143,000 TCS employees are the supreme assets of all which includes 50,000 global
associates from 67 countries and TCS trained 93,000 software professionals of which, 22,000
college graduates in the past academic year which was tremendous growth. TCS is incessantly
investing to unlock new markets and services which made them to invest in emerging markets
like Asia-pacific, Middle East, Africa and Latin America. The firm’s gigantic team of human
resources is serving the TCS’s panorama not only in business but also its contact on the
community. TCS made an effective evolution in corporate sustainability. TCS persists to be a
pioneer of growth for the reason of its established ability to reinvent the business and
organisation. The concern is placed to exert in collaborative mode, significant assessing all that
TCS does. TCS holds a strong position in the future IT global market.
Competitors of TCS in the Foreign Market and its competitive advantages:

The top competitors of Tata Consultancy Service in the world market as well as in Indian
market are Accenture, Wipro, HP, IBM, Infosys, Genpact, Cognizant, Deloitte, Dell and
Microsoft is a multinational company and global leader in IT services, consulting & business
solutions with its headquarter at Mumbai.

Tata Consultancy Service TCS has achieved remarkable competitive edge not only in its home
country India but has expanded its software business successfully at global level as well. TCS
has only followed one theme up till now and that is growth. Some of its advantages can be
summarised below:

1. Trusted Partners
2. Trusted costumers
3. Global Presence
4. Sustained Development in Europe and America.
5. Innovation Labs
6. Global Network Delivery Model
7. Highly Skilled Workforce
8. Well Defined Disaster Management

EXPANSION STRATEGIES OF TCS IN THE FOREIGN MARKETS:

TCS has successfully navigated through multiple technology cycles over the last five decades,
pivoting and adapting each time to build relevant new capabilities and helping our clients
realize the benefits of that new technology. Its responsiveness, agility and adaptability to
change have been core to our longevity. TCS have a keen view in looking US and UK for the
Business Revenue markets and India for the skilled employees. TCS is very keen in
establishing global delivery centres outside India which can demonstrate TCS as a Global
company. TCS was the first one to set the global delivery centre in China which distinguished
TCS from other corporate companies. In recent years TCS was frequently changing its
approach towards global market; recently TCS reconstructed its structure towards its global
operations to implement a Customer centric and integrated approach which is anticipated to
assist in avoiding the risk factors arising from the Economic Meltdown in western countries.
TCS’s operation units are mainly divided into five main divisions. The well-established
markets are North America, U.K and Western Europe and the new markets are Latin America,
Middle East, India and Eastern Europe. The new restructured plan was considered as the very
good change by the TCS as it is attaining impetus in Europe and other markets, which is
obvious in the company’s marked growth rate of 40% every year. The operations In Middle
East and Latin America had also seen a substantial growth. TCS had built new delivery and
offshore centres in Latin America like Uruguay, Mexico and Brazil.
Key Elements of its strategy.
PESTLE ANALYSIS OF TCS Ltd. : -

Political Factors:

The political factors that matters are the international and domestic political arena and the legal
issues for the courier industry. TCS has been one of the very significant courier service
providers and has a direct impact of political maxims o of the world. The political factors also
have a direct impact on the way the TCS has made its norms and derived its policies. By and
large, the political factors greatly define the policies of the TCS and time and again had
impacted this company. Brexit may alsoimpact projects in UK and Europe markets.

Economic Factors:

Economically Courier Company like TCS has been considered as one of the best company in
its realm. Customers have shown great satisfaction in this particular realm. TCS is paying their
employee’s way better than the employees working in other rival companies. The profit the
Travel Industry is making is good enough to maintain its good position against its competitors.
For the secure future, TCS needs to enhance its marketing strategies and has a dire need to
promote the company globally. Such initiatives are possible in order to show the might to the
competitors. On the Large workforce strength with
higher compensation is increasing operating costs and the Increase in local hiring in US and
other countries may have a considerable impact on the cost structure which must be looked
after keenly by the company.

Social Factor:

TATA group has its brand reputation and it is known for ethics and integrity which helps TCS
win business. TCS is involved considerably in employee volunteer investments and IT
education to school students.
There are more certain unique features of TCS that have played a vital
role in making the organization popular among its regular clients. The quality which has been
maintained by the team of TCS has made the people more prone to the TCS than any other
courier service. The innovative culture introduced by the TCS has always attracted the clients.
The company has always considered and respected the social values and norms of the people
from every background which is an opportunity. As such factors laid a direct impact on the
success graph of the company.

Technological Factor:

This is the era of technology. The people here are now very much interested in the new
technologies and always expect from good companies to adapt the latest trends of technology.
Likewise, TCS has always been found adapting the new technological trends in its domain.
TCS has the best of the customer care services with the updated technology. It has been the
key to success of the company. TCS has all latest and up to the mark technology for managing
all the services. Customers have always found very satisfied and happy with the services. So
technological factors are the major ingredient in chalking out the policies of TCS.
 Digital five forces- Mobility, big data, social media, cloud computing and robotics are
going to be the main growth driver and TCS should be in the forefront of adopting these digital
forces.

Legal Factor:

Penalty from the impeding lawsuits will impact TCS’s reputation and incur significant
penalties. Legislations in USA, UK and other major markets can impact the TCS’s operating
model. TCS must always abide by the rules and regulations of the region which are directly or
indirectly linked with the whole process of its operations.

Environmental Factor:

TCS’s strategy to build its green and energy efficient infrastructure empowers its
environmental sustainability road map.

Challenges faced by Tata Consultancy Services:

Recent News:

Tata Consultancy Services has been struggling to meet market expectations for the last six
consecutive quarters and could be trailing the industry growth average this year. While the
third quarter is traditionally a weak quarter, the company agrees that some of the growth
challenges it is facing may continue for the next few quarters.
“It's a relatively muted quarter. There is no taking away from the fact that the quarter was
lower than what we expected as well as what the overall market expected,” Rajesh
Gopinathan, Chief Financial Officer at TCS, told BusinessLine.
Key reason:
Gopinathan said that while a diverse portfolio helped India’s largest software exporter sail
smoothly through the slowdown in demand about four years ago, the same diverse portfolio
is causing problems now. “We have the most diversified geographic spread in the industry,
with the US contributing only 52 per cent. We believe that we have to be working in every
large market and it has helped us. About 4-5 years, when developed markets started doing
badly, other markets supported our growth. Now, growth is practically only in North
America. So, everyone else is dragging,” Gopinathan said while pointing out the company
will not make any changes in its geographic portfolio.
Within the non-US markets, India has been one of the most challenging markets for TCS. “If
you take India, the real issue is that the extent of actual hard investment on ground has not
happened. We are a downstream player — first the money has to come in and then we get
some. That is not picking up significantly,” Gopinathan said.