chp 1 : wipro ltd. company 1.1 ) introductiondocshare01.docshare.tips/files/24470/244707261.pdf ·...

A STUDY ON SWOT ANALYSIS OF WIPRO

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CHP 1 : WIPRO LTD. COMPANY

1.1 ) Introduction

Wipro is headquartered in Bangalore and has 28 development centers across India, Europe and

USA and also has 21 offices in USA, Canada, Finland, Taiwan, France and United Kingdom.

Wipro has set a vision for itself to become a US$ 5 billion company in the next couple of years.

It aims to be top 10 IT companies in the world top IT Company in India, among top 10 most

favored employers in the world and to be among the top 5 brands in India. Wipro is a global

company with revenues of Rs 30922 MN for the year 2001. The revenues for the company

have been growing at an annual average rate of 23% and PAT at an annual average rate of

50%. It employs total of 14000 employees out of which 11500 employees are in IT business.

Wipro follows Six Sigma quality systems and is also a SEI-CMM level 5 companies with

principal lines of businesses being information technology (IT) and consumer products. It also

has other businesses of fluid power, lighting, medical equipment products and financial

services IT, which includes software services as well as hardware products, makes up the

largest chunk of business for Wipro. It accounts for 84% of total revenues of Wipro ltd. the

Global IT services contributes 57% of total revenues whereas Indian IT services contribute

27% of total revenues. The IT business makes up 84% of the revenues of Wipro Limited and

around 93% of its PBIDT. Wipro has a very good client base with over 50 Fortune

500companies and over 100 leading Indian corporates. In software Wipro is headquartered in

Bangalore and has 28 development centers across India, Europe and USA and also has 21

offices in USA, Canada, Finland, Taiwan, France and United Kingdom. Wipro has set a vision

for itself to become a US$ 5 billion company in the next couple of years. It aims to be top 10

IT companies in the world top IT Company in India, among top 10 most favored employers in


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the world and to be among the top 5 brands in India. Wipro is a global company with revenues

of Rs 30922MN for the year 2001. The revenues for the company have been growing at an

annual average rate of23% and PAT at an annual average rate of 50%. It employs total of

14000 employees out of which 11500employees are in IT business. Wipro follows Six Sigma

quality systems and is also a SEI-CMM level 5companies with principal lines of businesses

being information technology (IT) and consumer products. It also has other businesses of fluid

power, lighting, medical equipment products and financial services. IT, which includes

software services as well as hardware products, makes up the largest chunk of business for

Wipro. It accounts for 84% of total revenues of Wipro ltd. the Global IT services contributes

57% of total revenues whereas Indian IT services contribute 27% of total revenues. The IT

business makes up 84% of the revenues of Wipro Limited and around 93% of its PBIDT. Has

emerged as the second largest player and is growing strongly and of toiletries has carved out a

niche in the premium segment. Wipro also had an interest in the financial services industry

through a subsidiary- Wipro Finance. This has proved to be a drain on the company for the last

three years and this year the company has divested a significant portion of this company and it

is no longer a subsidiary of Wipro. Wipro has a number of alliances with global leaders like

Vignette, ATG (Art Technology Group), Open Market, iPlanet for e-business; with Anther

systems, Age corporation for m-commerce; with Neon, STC, Vitria, Mercator, Seagull for

Enterprise Application Integration; with SAP for ERP; with Siebel, Clarify, Pivotal for

Customer Relationship Management; with Computer Associates, Cisco, Nortel, Sun for

Technology Infrastructure Services etc.


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1.2 ) Wipro’s Mission and Vision

Having already achieved the pinnacles of process and quality credentials (through ISO 9000,

SEI CMM, PCMM and Six Sigma), Wipro’s Vision is focused on attaining leadership in the

areas of business, customer and people. Business Leadership: Among the top 10 Information

Technology Services companies globally and theNo.1 Information Technology company in

India. Customer Leadership: The No.1 choice of customers through innovative solutions and

Six Sigma processes. People Leadership: Among the top 10 most preferred employers globally

by creating an environment of empowerment, intellectual challenge and wealth sharing. Brand

Leadership: Wipro to be among the 5 most admired brand in India Wipro enters into various

industries for various businesses in a constant innovative manner. This shows the firm’s strong

approach of tapping new market with the spirit of achievement.


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CHP 2 : BUSINESS ENVIRONMENT

2.1 ) Economic Environment

In the economic front, when Wipro ltd had been taken over by Mr. Azim Premji, he analyzed

the economic environment and found the opportunities for the expansion and diversification

in various industries. Even when it was under his father’s administration he took that into a

consumer market segment, where he had seen an opportunity to tap the consumer goods

market, which was a main concern of government to cater to the needs of domestic demands

first. The next opportunity seen by them was the boom of infrastructure industry in mid –

1970’s. The growth of country has its one of the bases as infrastructure development which

should be in both private and government sectors. They foresee it in a better way and decided

to enter in to a market where they could achieve the top level, which was engineering and

manufacturing of hydraulic and pneumatic cylinders. This provides solutions by hydraulic and

pneumatic cylinders, truck tipping systems for the trucks and heavy industry machines and for

army tanks and vehicles. Wipro Technologies from 1970’s to 1990’s at that time Indian

economy was state-controlled and the state remained hostile to the software industry through

the 1970s. Import tariffs were high and software was not considered as a separate industry, so

that exporters were considered as ineligible for bank loans. Government policy towards

changed in 1984.Package of reduced import tariffs on hardware and software. This recognition

of software exports as a "de-licensed industry", i.e., henceforth eligible for bank finance. This

encouraged our Indian domestic players like Infosys, Wipro and TCS to concentrate in

software industry very actively. The trend of growth rate of India’s economy demonstrates an

upward trend. During the period of 1960 to 1980 the economy saw a growth rate of 3.5% due

to the roles of major industries in India GDP. In the years from1980 to 1990 the growth rate


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showed a marked improvement of 5.4%. It was slightly lower in the period from 1990 to 2000

which was at 4.4%, and the reason behind this is those companies were already into the

industry, quickly utilized the opportunity, others were struggling to come up. Then the start of

21stcentury till 2008 the economic condition were favorable for this industry. The contribution

towards country’s GDP was increasing year on year from 2000 to 2008. Then the world

economic slowdown hit software industry in India and melted so many companies in the

market. The phase 2000 to 2008 saw a huge improvement and the growth rate of GDP were

marked at 6.4%. The IT industry’s contribution to the country’s GDP has been steadily

increasing from a share of 1.2percent in 1997-1998 to 5.2 percent in 2006-2007, according to

NASSCOM-Deloitte study. The Indian Software Industry has grown from a mere US $ 150

million in 1991-92 to a staggering US $ 5.7 billion in1999-2000. No other Indian industry has

performed so well against the global competition. According to statistics, India’s software

exports reached total revenues of Rs 46100 crores. The total share of India’s exports in the

global market rose form 4.9 per cent in 1997 to 20.4 percent in 2002-03. The Indian software

industry was considered to be the biggest employer expected four million jobs in 2008. It

accounted for seven percent of India’s total GDP in the year 2008. 5

6. Today, the Software Industry in India exports software and services to nearly 95 countries

around the world. The share of North America (U.S. & Canada) in India’s software exports is

about 61 per cent. In1999-2000, more than one third of Fortune 500 companies outsourced

their software requirements to India. The software industry being the main component of the

IT Industry in India has also helped the IT sector in India to grow at a good pace. As per the

proceedings taking place in the software industry the future of the India Software Industry

looks promising.


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2.2 ) Political and Legal Environment

From 1970’s to 1990’s: The IT industry started growing under unfavorable conditions initially.

Domestic markets were not favorable enough and the government policies toward private

enterprise were completely unfavorable. The industry was begun by Bombay-based

conglomerates which entered the business by supplying programmers to global IT firms

located overseas. At that time Indian economy was state-controlled and the state remained

hostile to the software industry through the 1970s.Import tariffs were high (135% on hardware

and 100% on software) and software was not considered as a separate "industry”, so that

exporters were considered as ineligible for bank loans. Government policy towards changed in

1984. The Government has also played a vital role in the development of the India Software

Industry. In 1986, the Indian government announced a new software policy which was

designed to serve as a catalyst for the software industry. This was followed in 1988 with the

World Market Policy and the establishment of the Software Technology Parks of India (STP)

scheme. Package of reduced import tariffs on hardware and software (reduced to 60%). This

recognition of software exports as a "de-licensed industry", i.e., henceforth eligible for bank

finance. This encouraged our Indian domestic players like Infosys, Wipro and TCS to

concentrate in software industry very actively. The trend of growth rate of India’s economy

demonstrates an upward trend. In addition, to attract foreign direct investment, the Indian

Government permitted foreign equity of up to 100 percent and duty free import on all inputs

and products.

After 1990’s: When the liberalization took place, India’s Information technology had a huge

advantage over it. Then onwards the boom started and the big players like Wipro, Infosys, and

TCS started being stable enough to survive in the industry. Liberalization gave them the


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opportunity to go global and to get their investment to expand their businesses in various sub

sectors like BPO and KPO and consulting. Those companies were already into the industry,

quickly utilized the opportunity, others were struggling to come up. Then the start of 21st

century till 2008 the economic condition were really good for this industry Wipro

Technologies: The time line shows the consistent innovativeness of Wipro ltd throughout its

journey. Wipro ltd was very quick to react for governmental or legal environmental changes.

Those immediate responses helped it to build and grow its businesses to extreme level in

several industries, in which they achieved and continuing in top players list. One of the best

examples for this quick move or reaction towards legal or governmental environmental

changes was to diversify in to IT hardware and later IT software industries.

In 1977, IBM was in a situation, which it needed to leave from India, because of government

regulatory rules, Wipro decided to enter Information Technology sector, by serving its

domestic clients in IT Industry. They responded quickly and diversified into Information

Technology Industry in 1979. Wipro began developing its own computers. In 1981 the

launched the Hardware company which provided the computer peripherals. This was the first

in a string of products that would make Wipro one of India’s first computer makers.

Simultaneously in 1980 Wipro moved into software development and started developing

customized software packages for their hardware customers.


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2.3 ) Technical Environment

Technical environment is an important entity in this industry. The technological innovations

drove the companies to get various dimensions across the industries. After 1990 in India all

the industries started realizing the importance of technology support to their businesses to

improve their efficiency to survive in the competitive market. The competition mostly based

on price and quality of the products. To handle the price sensitive customers the companies

need to be cost effective in their operations and to be innovative enough to keep their customers

happy in order to retain them. In all the industries new inventions started coming and the

variety of products increased. The import of goods has been increased. Some technologies

invented and improved during the 1990s: Software the World Wide Web and HTML are

created by Tim Berners-Lee and eventually displace the Gopher protocol. Microsoft introduces

Windows 95 and later Windows 98 to the market, which gain immediate popularity. The

development of Web browsers such as Netscape Navigator and Internet Explorer makes

surfing the World Wide Web easier and more user friendly. The Java programming language

is developed by Sun Microsystems. Businesses start to build E-commerce websites; E-

commerce-only companies such as Amazon.com, eBay, AOL, and Yahoo! grow rapidly. E-

mail becomes popular; as a result Microsoft acquires the popular Hotmail.com webmail

service. Instant Messaging and the buddy list becomes popular. AIM and ICQ are two early

protocols.

The Year 2000 problem (commonly known as Y2K), the computer glitch disaster expected to

happen on January 1, 2000. Microsoft Windows operating systems become virtually

ubiquitous on IBM PCs. Development of the free Linux kernel is started by Linus Torvalds in

Finland. These innovations are all related to software and hardware industry. Big players were


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able to change themselves according to the technical changes happened. They started providing

their goods in a competitive price, so as to capture the market. In order to compete with the big

players with the price and quality, everyone in the industry needs to change their technology.

So the need of software and technological advancement favored positively to the IT industry.

In the early 1990’s concept like Business Process Re-engineering (BPR) and in later 1990’s

and 2000 the Enterprise Resource Planning (ERP) was new to the industry. Business Process

Re-engineering (BPR): Business process re-engineering (BPR) began as a private sector

technique to help organizations fundamentally rethink how they do their work in order to

dramatically improve customer service, cut operational costs, and become world-class

competitors. A key stimulus fore-engineering has been the continuing development and

deployment of sophisticated information systems and networks. Leading organizations are

becoming bolder in using this technology to support innovative business processes, rather than

refining current ways of doing work Reengineering guidance and relationship of Mission and

Work Processes to Information Technology.

Business Process Re-engineering (BPR) is basically the fundamental re-thinking and radical

re-design, made to an organizations existing resources. It is more than just business

improvising. It is an approach for redesigning the way work is done to better support the

organizations mission and reduce costs. Reengineering starts with a high-level assessment of

the organizations mission, strategic goals, and customer needs. The role of information

technology: Information technology (IT) has historically played an important role in the

reengineering concept.


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2.4 ) Social Environment

As time ran, the threat of new entrant in this industry is high because of low investment needs.

So the existing companies need to come up with innovative solutions to attract and keep its

customers and its shareholders to be sustained in the market. Then they came with Green IT

solutions, which is eco –friendly hardware components, reusable and made of low toxic

materials. At the same time Wipro ltd was very clear about their path they had chosen and the

position they wanted to maintain. They had financial services and Wipro net. When other

players came in Wipro wasn’t able to perform better, because the other players were having

those businesses as their core, so they excelled in that. After all players came in Wipro was not

performing well. So the company decided to quit those two services in 2002.


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CHP 3 : MAIN SYSTEM FORMED BY COMPANY

3.1 ) Enterprise Resource Planning (ERP)

ERP is an organization’s management system which uses a software application to incorporate

all facets of the business, and automate and facilitate the flow of data between critical back-

office functions, which may include financing, distribution, accounting, inventory

management, sales, marketing, planning, human resources, manufacturing, and other operating

units. ERP software, in turn, is designed to improve both external customer relationships and

internal collaborations by automating tasks and activities that streamline work processes,

shorten business process cycles, and increase user productivity. A method for standardized

processing, an ERP software application can both store and recall information when it is

required in a real-time environment. Companies often seek out ERP software systems to

pinpoint and mend inefficiencies in a business process or when a number of complex issues

exist in the business environment. ERP software systems are also implemented to enhance

operational efficiencies, achieve financial goals, manage and streamline the company’s

operational processes, replace an existing ERP software system that is out of date or unable to

handle a company’s daily activities; or improve information management through better data

accessibility, decreased data duplication and optimal forecasting features. Many business

owners see ERP software systems to be critical to their business functions, as they allow

companies to achieve absolute business process automation. While most companies use

countless processes, activities and systems to run operations, workflows and procedures can

go awry when it comes to today’s highly competitive marketplace, thus hindering productivity,

growth and profitability.


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3.2 ) Six Sigma Process

On the other hand they improved their efficiency by continuously following Six – Sigma

Process. The word is a statistical term that measures how far a given process deviates from

perfection. Six Sigma is named after the process that has six standard deviations on each side

of the specification window. It is disciplined, data-driven approach and methodology for

eliminating defects. The central idea behind Six Sigma is that if you can measure how many

“defects” you have in a process, you can systematically figure out how to eliminate them and

get as close to “zero defects” as possible. Six Sigma starts with the application of statistical

methods for translating information from customers into specifications for products or services

being developed or produced. Six Sigma is the business strategy and a philosophy of one

working smarter not harder. One sigma gives a precision of 68.27%., two sigma, of 95.45%

and three sigma of 99.73%, whereas Six Sigma gives a precision of 99.9997%. Although

99.73% sounds very good, it slowly dawned on companies that there is a tremendous difference

between 99.73% and 99.9997%. For example for every million articles of mail, the difference

is between 66,738 lost items and 3.4 lost items. Evolution of Six Sigma at Wipro is the first

Indian company to adopt Six Sigma. Today, Wipro has one of the most mature Six Sigma

programs in the industry ensuring that 91% of the projects are completed on schedule, mush

above the industry average of 55%.As the pioneers of Six Sigma in India, Wipro has already

put around ten years into process improvement through Six Sigma. Along the way, it has scaled

Six Sigma ladder, while helping to roll out over 1000projects. The Six Sigma program spreads

right across verticals and impacts multiple areas such as project management, market

development and resource utilization. Six Sigma at Wipro simply means a measure of quality


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that strives for near perfection. It is an umbrella initiative covering all business units and

divisions so that it could transform itself in a world class organization. At Wipro, it means:

Have products and services meet global benchmarks

Ensure robust processes within the organization

Consistently meet and exceed customer expectations

Make Quality a culture within.

Six Sigma Consultancies at Wipro:

Wipro’s Six Sigma consulting experience has peaked with the indigenous development of new

methodologies that it takes to its customers. As Wipro continues Six Sigma consulting journey,

it builds on its expertise and experience- to provide enterprise-class coverage of topics in

business process management and information technology systems integration. The focus is

on supporting the project needs and is also integrated with other methods to support process

needs. Currently there are over 200PMI certified consultants at Wipro. The Wipro quality

consulting group trains in achieving the precision of Six Sigma with Wipro’s own

methodologies, training capabilities and global experience. Wipro also helps in

institutionalizing Six Sigma across the organization for transformation. Wipro provides

consulting in institutionalizing an organization wide Six Sigma program that specializes in

implementation across IT development, production support and core business operations

Wipro offers the following Six Sigma consulting services

Six Sigma institutionalization

Problem solving using six Sigma

Six Sigma training


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Improving performance through a precise quantitative understanding of the customer’s

requirements thereby bringing in customer focus

Improving the effectiveness in upstream processes of the software development life cycle by

defect reduction (software defects reduced by 50%) and cycle time reduction (rework in

software down from 12% to 5%).

Waste elimination and increased productivity up to 35%.

Cost of failure avoidance (installation failures down from 4.5% to 1% in hardware business).

Tangible cost savings due to lower application development cost for customer.


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CHP 4 : FINANCIALS OF THE COMPANY

Wipro Limited saw a stunning growth in terms of its revenue which soared up by 450% from

2002 to2007. In the quarter ended September 30, 2009, the IT Services business of Wipro Ltd.

reported revenue of 49.96 billion with a growth rate of 5% year on year. It also recorded PBIT

of 11.87 billion with a growth rate of 19% year on year. During the quarter, the operating

income to the revenue was 23.8%.During the quarter, Wipro Ltd. also added 37 new clients to

its list. Currently as of 2011 December, Wipro has employee strength of 120,000.Innovation

at Wipro Ltd: As we enter the second decade of the 21st Century, change seems to be the only

constant. This dynamic means that businesses are facing challenges and opportunities which

are very different to what they were a decade ago or even a year ago. The world of tomorrow

is one where uncertainty and fierce global micro-competition is going to be the norm. Rightly

so, the world is looking up to innovation in the triangle of technology, sociology and the

environment to help them deal with these changes. This innovation is coming to the fore in

various hues and has shifted from the core to the edge of the enterprise. This is being driven

by the rise of trends like analytics, mobility, cloud and as-a-service, even as the future will see

newer technologies such as machine-to-machine (M2M) communication and natural user

interface (NUI) fast becoming mainstream. In this fast changing world, Wipro believes it can

leverage on its institutionalized innovation culture to push the boundaries for delivering

solutions that provide enhanced value and direct impact for our customers. This culture has

brought to the fore innovations like India’s most powerful supercomputer, a cost-effective Base

Terminal Station designed for GSM networks in underserved markets, a mobile switching

router for emerging markets, connected home concept and Wipro Energy Manager that uses

M2M communication, among others. Taking forward our legacy in pioneering the ODC


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concept, Wipro has also developed application-based innovations like Flex and Cigma delivery

models which are service-based as opposed to resource-based. Wipro is also partnering with

European research institute IMEC to co-innovate and develop next-generation intelligent

systems based on nano electronics and aimed at emerging markets through an initiative called

Applied Research in Intelligent Systems Engineering (ARISE).


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CHP 5: DEALS, GROUP AND ACHIEVEMENTS OF COMPANIES

5.1 ) Wipro Ltd. deals in following businesses

IT Services: Wipro provides complete range of IT Services to the organization. The range of

services extends from Enterprise Application Services (CRM, ERP, e-Procurement and

SCM) to e-Business solutions. Wipro’s enterprise solutions serve a host of industries such as

Energy and Utilities, Finance, Telecom, and Media and Entertainment.

Product Engineering Solutions: Wipro is the largest independent provider of R&D services

in the world. Using "Extended Engineering" model for leveraging R&D investment and

accessing new knowledge and experience across the globe, people and technical

infrastructure, Wipro enables firms to introduce new products rapidly.

Technology Infrastructure Service: Wipro’s Technology Infrastructure Services (TIS) is the

largest Indian IT infrastructure service provider in terms of revenue, people and customers

Business Process Outsourcing: Wipro provides business process outsourcing services in

areas Finance & Accounting, Procurement, HR Services, Loyalty Services and Knowledge

Services. In 2002, Wipro acquiring Spectra mind and became one of the largest BPO service

players. It currently has 22,000 employees as of December 2011.

Consulting Services: Wipro offers services in Business Consulting, Process Consulting,

Quality Consulting, and Technology Consulting.


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5.2 ) Group Companies of Wipro Ltd.

Wipro Infrastructure Engineering: Wipro Infrastructure engineering was Wipro Limited’s

first diversification in 1975, which addressed the hydraulic equipment requirements of

mobile original equipment manufacturers in India. Over the past 25 years, the Wipro

Infrastructure Engineering business unit has become a leader in the Hydraulic Cylinders and

Truck Tipping Systems markets in India, and intends growing its business to serve the global

manufacturing requirements of Hydraulic Cylinders and Truck Tippers. It has emerged as

the leader in the hydraulic cylinders and truck tipping systems market in India.

Wipro InfoTech: Wipro InfoTech is the leading strategic IT partner for companies across

India, the Middle East and Asia-Pacific - offering integrated IT solutions. They plan, deploy,

sustain and maintain your IT lifecycle through our total outsourcing, consulting services,

business solutions and professional services. It is one of the leading manufacturers of

computer hardware and a provider of systems integration services in India.

Wipro Technologies - Wipro Technologies is the global IT services business division of

Wipro Limited. It is a global services provider delivering technology-driven business

solutions that meet the strategic objectives of our clients. With over 46 offices around the

world, Wipro Technologies is the No.1 provider of integrated business, technology and

process solutions on a global delivery platform.

Wipro Consumer Care and Lighting: Wipro Consumer Care and Lighting, a business unit

of Wipro Limited, has a profitable presence in the branded retail market of toilet soaps, hair

care soaps, baby care products and lighting products. It is also a leader in institutional

lighting in specified segments like software, pharma and retail. It manufactures and markets

the Wipro brand of luminaries. Wipro Lighting offers lighting solutions across various


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application areas such as commercial lighting for modern work spaces, manufacturing and

pharmaceutical companies, designer petrol pumps and outdoor architecture.

Wipro GE Medical Systems: Wipro GE Medical Systems is a joint venture between Wipro

and General Electric Company. As a part of GE Medical Systems South Asia, it caters to

customer and patient needs with a commitment to uncompromising quality. Wipro GE is

India’s largest exporter of medical systems, with unmatched distribution and service reach

in South Asia. Wipro GE pioneered the manufacture of Ultrasound and Computed

Tomography systems in India and is a supplier for all GE Medical Systems products and

services in South Asia.

Wipro Technologies: Wipro Technologies is a global services provider delivering

technology-driven business solutions. Wipro is the No.1 provider of integrated business,

technology and process solutions on a global delivery platform. Azim Premji is the

Chairman of Wipro Technologies. He took over the mantle of leadership of Wipro at the

age of 21 in 1966. Under his leadership, the fledgling US$ 2 million hydrogenated cooking

fat company has grown to a US$1.76 billion IT Services organization serving customers

across the globe. iWipro is presently ranked among the top 100 Technology companies in

the world. It has 120,000employees, serves 592 clients, and has 46 development centers

across globe.

Alliances: Wipro works with alliance partners to offer compelling business propositions for

the customers. Our alignment with the technology leaders across various industries enables

us to provide our customers with world-class solutions that transform their business

processes.


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5.3 ) Achievements of Wipro Ltd.

First Indian IT Service Provider to be awarded Gold-Level Status in Microsoft Windows

Embedded Partner Program.

World’s largest independent R&D Services Provider.

World’s 1st PCMM Level 5 software company.

Worlds 1st IT Services Company to use Six Sigma.

The first to get the BS15000 certification for its Global Command Centre.

Among the top 3 offshore BPO service providers in the world.

Only Indian company to be ranked among the Top 10 Global Outsourcing Providers in the

IAOP-Fortune Global 100 listings.

First company in the world to be certified in BS 7799 (2002) security standards.

Ranked 23rd in the Top Companies for Leaders’ global list announced by Aon Hewitt, the

RBL Group and Fortune.

ASTD BEST award for training and development.

IT Outsourcing Project of the Year 2011 award for innovation and achievement in

outsourcing industry.

NASSCOM Corporate Award for Excellence in Diversity and Inclusion.

National Telecom Award for Excellence in Infrastructure for Application Services.

SAP ACE Award for Customer Excellence.

The Outsourcing Excellence Award for Best IT Enablement in BPO.

BPO Excellence Award for Outstanding Work in Utilities Company in UK.

Awarded with DL Shah National Quality Award.


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CHP 6 : SWOT ANALYSIS OF WIPRO LTD.

In this internal analysis usually SWOT analysis is used. It is an effective way to use this and

will be easy to identify the company’s strengths and weaknesses. The opportunities and threats

we found in the external analysis will be matched here and the company’s core competencies

also considered and will work on the improvement area of Wipro Ltd.

SWOT

Strengths

Weaknesses

Opportunities

Threats


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6.1 ) Strengths

Global R&D facility – Continuous Innovation: Wipro has global Research and development

facility. It keeps on innovating new products and services in order it retain its customer and to

attract new clients and shareholders in the market. Its global R & D is a very strong strength

for it. Vast clientele base: its large client base throughout the world gives strength for it. In its

starting years it first headed into hardware business, then it started providing software solutions

to them then diversified as a company. The global clients of Wipro Technologies are always

strength for it. The down turn in one economy can be pacified by performing well in other

economy.

High skilled employees across industries: Wipro’s one of the main strength is its highly

skilled employees. The HR practices they follow are very much suitable and sustainable, where

in IT industry the attrition rate is very high.

Economies of scale - Low cost advantage: As they have already had their domestic as well

as their global clients, this is an advantage over all. The economies of scale can be achieved

easily when compared to start ups. For example when they started the Wipro Consulting

Company, it earned 2 Crores within its first quarter of operations, because the client base is

huge and the economies of scale are also high for it.

Strong brand value: As Wipro Technologies is the 2nd largest IT end to end service provider

in the world; it has attained its brand value. So customers will prefer Wipro technologies for

its quality. Client satisfaction - Quality products & Delivery capabilities: Wipro Ltd achieved

all these because its continuous assured quality providing capacity and commitment. The

clients are more satisfied with Wipro. Alliances with top global companies – GE, Cisco, EMC,


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Microsoft, Oracle and SAP: To be a global player, a company needs to have alliance with

various other companies to provide on time service and delivery. Certainly it’s one of its main

strengths. The network strength is very high.

Green thoughts - Eco friendly products: Where Wipro operates, the innovation keeps on

gaining its own value among people. Its green thoughts like Green IT that is reusable computer

peripherals and less toxic material usage for its production are their strength. The green office

area – an innovative thought, which benefits its businesses.

Customized products: It provides customized products for several industries like aerospace,

Engineering Infrastructure, Medical equipment’s; Lighting solutions etc… are its strengths.

Investment on Sales Team: In latest quarter, Wipro has spent over INR29MN on SG&A, up

16% from previous quarter, as per management they have increased/increasing investment to

refine sales unit.

No Debt and Higher Margin: It does not have debt and overall operating margin is 20.8%

Lower Attrition Rate: It has made number of changes in HR policy, in latest quarter overall

attrition rate stands about 14.2%, lowest in last two years.


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6.2 ) Weaknesses

Low operating margin of the other group companies: Even though IT sector creates huge

profits for Wipro Ltd, the other group companies like customer care and Lighting is just

accounting for only 9% for the total revenue. So a conglomerate company like Wipro will get

affected if one of its main sectors fails. There are other players who are especially in those

same sectors who already excelled in that sector like HUL, ITC etc….

Concentrating on mature markets: Domestic market is huge but is underdeveloped. If Wipro

Technology considers capturing the remaining under developed rural areas like sub metros, it

could have a very strong base in India and can improve its share and can be a No 1 player in

IT sector.

Risk Shying away from making business investment: In order to have lower risk, Wipro

does not encourage joint investment with client. It always prefers client giving business and it

executes. But in some verticals especially Healthcare a join investment is required to reap

business benefits.

Strong focus on Process: Wipro is strongly focused on process rather people and thus delays

are frequent in making key management decisions.

Unstable top management: Since CEO needs to be in agreement with Mr. Premji vision and

thus results in conflict and change in top management. A change in top leadership is not

good/productive for middle and upper level management.


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6.3 ) Opportunities

In the consultancy area and BPO area: As Wipro Consultancy is in the list of top

consultancies, it could achieve more with its vast client base. In BPO industry it is in 2nd top

company in India. It could achieve to come to first place.

Emerging technology: As it has skilled work force, it always have opportunity to come up

with new technologies.

Huge global market: As it is already a renowned global company, it has a huge scope in

global market. The company has entered into the global market so now it’s the biggest

opportunity available to the company.

Huge potential in domestic market: It has potential to capture more market share in Indian

It industry. So it has both global and domestic opportunity to expand.

6.4 ) Threats

Increasing cost of human capital: As it is well known about IT and BPO industry, the attrition

rate is always high. So hiring new people is a huge cost incurring process every year. Then the

Training and Development cost is also highly cost counting part in IT industry.

Intense rivalry in It Industry: The rivalry among Indian It industry is very high, because the

entry Barrier is very low. It needs a low investment cost to start an IT company. Environmental

change: Changing Environmental conditions like economic meltdown and Changing

technology is a big threat to companies in IT industry. It will face fierce competition in the

areas of e- business and ASP services. Slowdown in the banking, financial services and


26

insurance (BFSI) sector. Other conglomerates like ITC, Reliance, and Aditya Birla group may

enter in to various industries and to take over the benefits of Wipro Ltd.

Exchange rate: This can be a threat to the company as the company is making profits due to

the high exchange rate and if this rate comes down in future it can lead to a major problem for

the company.

Changing Laws and Regulations: Government rules and regulation change may be a threat

for IT industry companies, exactly for Wipro Technologies, which relies more on overseas

projects.

Strategy of Wipro Ltd: In this changing day to day technological environment the blurring

of geographic boundaries and the need to expand in global emerging markets, business leaders

at the world’s largest companies see strategic innovation as crucial to their future growth plans,

according to an exclusive Wipro-Forbes Insights survey. The in-depth insight study examined

and summarized the views of over 300 CEOs and other C-level executives at global enterprises.

Weak Economy: A weak US market coupled with ongoing EU debt crisis can hurt its revenue

growth in FY12

Weak IT spending: Recently Gartner has predicted a lower IT spending in FY12, overall

spending will grow by 3.7%, and overall growth was 6.8% in 2011.


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SUGGESTIONS

Adopt the Dynamic High Technology Strategy and Speed-to-market is necessary for successful

innovation. Getting a product or service swiftly out to market is a critical business innovation

tactic. Cost remains the biggest hurdle to fostering innovation. It will be always barriers for R

& D. Issues related to the regulatory environment, and finding and retaining top talent. Paying

attention to best practices is the most effective way to foster innovation. Other innovation

tactics included technology, data-based decision making, and customer collaboration. Clear

business case for using “green” practices. Green business practices as part of their corporate

innovation strategies. Green IT is a priority for more than three quarters of companies. Increase

Global Presence in various country like China holds the greatest opportunity, followed by

India, Southeast Asia, and Eastern Europe. More collaborations with other players; reduce

dependence on only few players.

CONCLUSION

Till today Wipro Ltd. has been known for being very process oriented with a focus on quality

and cost savings. Wipro long term strategy should be to create a brand image and be known

for innovation. Wipro should invest in R&D and Market research, so that it is able to innovate

new solutions for clients to cut costs or reduce time to market or improve reliability.


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APPENDIX/BIBLIOGRAPHY

Articles

http://articles.economictimes.indiatimes.com/keyword/wipro-infotech

http://seekingalpha.com/article/1931141-2-reasons-to-sell-wipro

Webilography

http://wiki.answers.com/Q/What_is_Wipros_mission_and_vision#ixzz1ottCfYGM

http://www.anil2u.info/2010/03/top-100-it-companies-rank-wiselist/

http://www.indianmirror.com/indian-industries/information-technology.html

http://books.google.co.in/books?id=EPai4FgFA2YC&pg=PA165&lpg=PA165&dq=barg

aining+power+for+wipro&source=bl&ots=rlezwgf

http://www.answers.com/topic/wipro-technologies

http://www.equitymaster.com/research-it/sector-info/software/

http://www.thehindubusinessline.com/companies/article2048647.ece

http://wipro.co.in

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