The SWOT analysis of TCS will shed light on the plus points, opportunities, drawbacks, and threats the company faces in the competitive world.
About TCS
Incepted on April 1, 1968, TCS was a branch of Tata and Sons building demand for downstream computer services and solutions. Established by the visionary leader, Jamshedji Tata invented the company. Under his able leadership, today TCS has emerged as one of the most prominent and respected companies in India. The company has around 50 organizations offering IT goods and services like application development, enterprise software, business process outsourcing, etc.
The Indian financial system is continuing to expand continuously and the requirement for technology has now become an integral part of the national requirement. TCS has been continuously investing more time and revenue in domestic it. It was initially positioned to assist the national government at the state and federal levels in its initiative campaigns.
TCS has headquarters in Mumbai, India having a number of employees of approx 6.5 lakhs. The market cap of TCS is around $152.34 billion. As per the latest report, the annual revenue of TCS in 2023 was $27 billion.
Buyer Persona of TCS
Tata Consultancy Services was initially catering to bigger enterprises in different industries looking for economical IT solutions. However, in the initial years of the 2000s, the company’s buyer persona included the decision-makers within organizations, including C-suite executives or directors optimizing and modernizing the company’s technological well-being.
The major buyers were from different sectors like financial services, manufacturing, banking, insurance, retail, healthcare, etc. These buyers were facing challenges like scalability issues and legacy system maintenance for the requirement to innovate to stay abreast of the competition in the rapidly evolving market landscape.
Next, the buyer person of TCS sought partners having the capacity to offer complete IT services right from software development to its implementation and maintenance. These buyers valued scalpity reliability and a worldwide presence as many of the organizations had plans to expand their presence globally.
Cost-effectiveness was one of the crucial elements for the buyers of TCS initially. During that time they looked for vendors like TCS who could deliver value revenue solutions to meet their immediate needs and could align with their long-term business goals.
So, overall, the buyer person of TCS comprises innovative executives as well as IT leaders in big companies looking for cost-effective scalable reliable, and innovative IT solutions to up their business growth in the highly competitive market.
SWOT Analysis of TCS
Let us now deep dive into the SWOT analysis of TCS in detail.
Strengths of TCS
Broad client base
TCS caters to a broad range of audiences from Industries like entertainment banking, financial services, media services, and telecommunication. The company has also worked with many industry joints and has helped them implement their digital presence across the globe. By expanding and bringing diverse services to its plate, TCS can easily loosen the risk of being reliant on a specific industry.
Expanded global reach
The worldwide reach of TCS extends from the UK, Africa, Europe, North America, and the Asia Pacific regions. This showcases the consistent efforts of the company to acquire as many areas as possible. It has helped the company to stretch its presence and solidify its global position.
Varied service portfolio
TCS has a decentralized portfolio including various services like business intelligence, application development, IT infrastructure, and better maintenance of business process services. A lot of business clients attract such effective portfolios and make respective collaborations.
High return on investment
With all the strengths the company has, TCS successfully implements its new projects as well as ventures. It helps generate high returns on capital expenditure resulting in the company’s exponential growth across the globe.
Strong collaborations
TCS has established successful connections with numerous multinational companies including HP, Dell, Amazon, Bosch, etc. The company provides technical and strategic sustainable solutions to its clients through its different collaborations and partnerships.
It has helped TCS to diversify its portfolio and reach new heights in the IT industry landscape.
Weaknesses of TCS
TCS has the following weaknesses that come under the SWOT analysis.
Legal complexities
In 2014, TCS and Epic Systems had a legal dispute and the company was accused of inappropriate use of confidential corporate information. In 2016, TCS was hit for its repetition and was proven guilty with a safety amount of penalty. This amount was a staggering $900 million in damages. The company however disagreed and ignored the court decision which harmed the company’s reputation.
Sharp fall in performance
TCS subsidiary, Diligenta performed poorly continuously in its financial reports. As the company was not efficient enough to perform well, the bottom line of TCS couldn’t rise quickly. This, however, tarnished the company’s overall performance.
Tata Consultancy Services needs to be more agile to compete with the giants as well as companies that are developing specialized IT solutions and operations landscapes.
Opportunities of TCS
Below are the major opportunities that TCS holds.
Mobility solutions
The digital space is evolving continuously and has increased the use of mobile phones as well as digital gadgets. TCS is an available position company and has got the opportunity to leverage this emerging digital age. The progress of business applications is given extra attention by the company. These applications are really expected to be the primary driving force behind the mobility solutions for different companies.
M2M solutions
Tata Consultancy Services has made provision for M2M solutions including wired and wireless communication media. The company leverages the emerging opportunities in this field. TCS offers a range of machine-to-machine solutions and services with increasing demands.
Demand for cloud-based computing
TCS has a very strong cloud-based infrastructure that is all set to benefit from the demand developed for the services. Today, the industry is moving towards cloud-based solutions and hints demand innovation as well as the speed of digital transformation.
Digital transformation
Today, the world is becoming more digital and companies are forced to change their digital economy. The company’s primary goal is to transform and deliver digital solutions and expects more expenditure on technology for the evolution.
Threats to TCS
TCS faces major threats like intense competition, legal complexities, etc.
Severe competition
The competition in the IT industry is becoming more tough. The market share of TCS is very limited so the constant price issues remain. Big IT companies like Accenture, Infosys, Deloitte Capgemini, etc. are playing a major role in the IT industry with the same efforts. TCS should continuously develop better and new solutions for its clients to overcome the intense competition.
Legal issues
Continuously, changing legal rules in unions and countries can disturb the company’s functionalities. This can impact the profit and revenue of TCS.
Higher turnover rate
TCS undergoes particular attrition that harms its repetition and brand image. It ultimately increases the expense of upgrading the skill sets of new employees and instilling leadership qualities.
Top Competitors of TCS
Below mentioned are the top five competitors of TCS.
- Wipro: Wipro is a global IT company with headquarters in India. The company offers unique IT solutions as well as consulting services to different industries. Having focused on sustainability, innovation, and knowledge of the latest technology the company competes with TCS in almost all segments.
- Infosys: Infosys is also an Indian-based international firm offering software development consultation and outsourcing solutions and services. The company competes with TCS by emphasizing the latest technology for clients while paying global and inventiveness with every step.
- Cognizant: Cognizant is another leading conglomerate in the IT industry. The company assists its clients with their different IT requirements. The requirements specifically related to modernization and the latest digital space. It competes with TCS based on customer-centered, adaptable, and inventive solutions.
- Accenture: Accenture offers numerous services including helping companies with their strategy and technical requirements. It is a strong competitor to TCS as it excels at shifting business conditions and also holds extensive experience throughout various global companies.
- Computer Horizons Corp.: This is a US-based IT service provider offering software and consulting development services. This company has a very small employee base and offers customized solutions in the IT market while competing directly with TCS.
Conclusion
TCS is undoubtedly the best company in the IT industry and holds various strengths. TCS has a great brand image, diverse portfolio, and global outreach. The company needs to convert its flaws into strengths. If the company pays more attention to its plus points and then adjusts for new opportunities then TCS can be at the top position like now.
In this detailed SWOT analysis of TCS, we also found that the company is highly dependent on its customers and has gained high trust and popularity. Looking at the intense competition in the IT field, TCS needs to compete for the customers with consistent marketing efforts.