Infosys Case Study: Business Model and SWOT Analysis

Infosys is one of  the leading global technology companies and has consistently demonstrated its prowess in the consulting space and information technology (IT). Infosys was started in 1981 by Narayana Murthy with a team of six members in Pune with an initial capital of $250. Initially, it was registered under the name of Infosys Consultants Private Limited in Pune and then in 1983, Infosys relocated to Bengaluru, Karnataka. In this blog, we will explore the business model and the SWOT analysis of the well-known tech giant, Infosys.

The Birth of Infosys

Infosys was founded by seven engineers, who are listed as founding members: N.R. Narayana Murthy, Nandan Nilekani, S. Gopalakrishnan, S.D. Shibulal, K. Dinesh, Ashok Arora, and N.S. Raghavan, who had a vision of shaping a world-class IT service company capable of competing with the best. Later, Infosys became the nation’s first company to be listed on the NASDAQ. 

Infosys was started with an initial amount of $250, which was lent by the founders’ spouses. After that, the company faced numerous challenges in their early stage, including lack of funds, supportive regulatory environment, and many more.

Talking about Infosys’s annual revenue, it surpassed US$10 million in FY 1995, US$100 million in FY 1999, US$1 billion in FY 2004, and US$18.2 billion in FY 2023.

Here is a quick overview of the company:

Did you know? 

Infosys, an IT company, operated without a computer until the year of 1983.

Growth of Infosys

From a small scale organization to a leading multinational company, let’s have a look at how Infosys survived and thrived in the market. 

Initial days of the company

During the initial decades of its establishment, Infosys mainly focused on the US and Europe for business purposes because their markets were stable. During the initial days, Infosys focused on two major points: First was Banking and Financial services, where Infosys provides manufacturing, package implementation, and application development; another sector was ADM (Application Development and Maintenance).

The one factor that helped Infosys become a pioneer in the IT sector was that they charged a lesser premium compared to the global IT service providers such as Accenture and IBM.

Continuous Growth

Infosys started operations in India in the year of 1993 and the growth of Infosys was in a linear manner, which was visible in the business in terms of per capita revenue, strategic investment, attracting good clients, and many more.

Converting their clients into partners

Infosys adopted a unique tactic of converting clients into partners; this helps them get quality partners for their business. This tactic helped Infosys sustain in the market for the long run and gain a large profit due to the remarkable investments made by their partners. 

Worldwide Diversification

Infosys has spread its branches all over the globe. It has an impressive presence in the United States, India, China, Australia, Middle East, Europe, and Japan. In 2017, Infosys had 116 development centers, 84 sales and marketing offices, and 18 international offices.

Product and Services segments

Infosys provides services in the fields of finance, insurance, manufacturing, and many other domains. One of their key products, “Finacle” has become popular and is used as universal banking solutions. There are some more products and services that are offered by Infosys, and stated below:

1. Next Generation Integrated AI Platform. 
2. Infosys Consulting 
3. Infosys Analytics Platform 
4. Cloud Suite
5. Engineering Services, and many more.

Sustainable Acquisition

One of the key factors behind the company’s rise is its strategy of sustainable acquisition, which helped the company grow and succeed. Some of the major acquisitions are: Expert Information Services in 2003, McCamish Systems in 2009, Portland Group in 2012, Panaya in 2015, Skava in 2015, and Brilliant Basics in 2017.

SWOT Analysis of Infosys

This section will focus on the strengths, weaknesses, opportunities and threats of Infosys.

Strengths

• Infosys has a wonderful brand identity and is also recognized globally as a leading provider of IT services and consulting. The company built a great brand reputation by delivering excellence in every aspect of its operations.
• Infosys enjoys a diverse and strong client base, providing services in different industries like finance, healthcare, retail, manufacturing, and more. 
• Infosys knows the psychology of its clients while meeting their needs, which helps the firm retain them.
• Infosys Global Delivery model covers many delivery options, including onsite, offsite, nearshore, offshore delivery, etc. It is based on a solid foundation of global presence and local expertise.

Weaknesses

• Infosys also noticed some challenges like dependency on specific geographic regions that may limit their growth.
• Infosys faced cultural dis-alignment due to cultural diversification and unique values because different companies have their ways of running the business. 
• Many employees of Infosys used to leave the company because of better career opportunities, high-paying jobs, and other perspectives. This high attrition then became a norm in the IT industry in India. 

Opportunities

• Infosys has opportunities for new technologies such as artificial intelligence (AI), machine learning, blockchain, Internet of Things (IoT), and augmented reality (AR).
• Infosys could upskill their employees and thus create a talent pool proficient in cutting-edge technologies and industry best practices while reducing the high attrition rate.

Threats

• Infosys is in the IT services business, which is very competitive and complex, with established firms and emerging startups contending for market dominance.
• Infosys faces tough competition, which leads to a contraction in margins and a forced investment in the latest technologies.

Conclusion 

Infosys’ success factors include its workforce, quality services, and global delivery model. Infosys’ growth strategy was price penetration and focus on customer acquisition for the first few years. Overall, Infosys has established itself as a reputable brand with a diverse client base and a focus on delivering excellence in its operations.

Frequently Asked Questions (FAQs): 

1. Who are the seven founders of Infosys?

Ans – The 7 founders are Narayana Murthy, Nandan Nilekani, S. Gopalakrishnan, S.D. Shibulal, K. Dinesh, N.S. Raghavan, and Ashok Arora.

2. What is the business model of Infosys?

Ans – The company focuses on finance, healthcare, business consulting, technology, and outsourcing services.

3. What is Infosys’ employee attrition rate?

Ans – At the end of the June 2023 quarter, the company’s attrition stood at 17.3%

4. When was Infosys listed?

Ans – It was listed on the Indian stock exchange (BSE and NSE) on June 14, 1993. It was also listed on the NASDAQ stock exchange on March 11, 1999.

5. What is the full form of Infosys?

Ans – Infosys is a combination of two words: Information and System.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.