Detailed SWOT Analysis of TCS (Tata Consultancy Services)

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

Wide client base

TCS offers a broad range of clients throughout various industries like entertainment, banking, financial services, media, and telecommunications. Also, the company has helped numerous sectors across the globe in establishing their digital image. With a broader range of services, TCS can mitigate the risk of its fate being dependent on a single type of client.

Widespread global base

The global reach of TCS starts from North America, the UK, Africa, Europe, and the Asia Pacific regions. This indicates the continuous efforts of the company to get as many areas as possible. It has helped the company expand its presence and solidify its global position.

Different service portfolio

At TCS, the portfolio is split and covers capabilities such as business intelligence, building applications, support for IT infrastructure and improved management of business processes. A wide variety of companies attract high-quality portfolios and partner with them accordingly.

Increased return on investment

Given the strengths of the company, TCS is setting up and carrying out new projects. As a result, high returns are seen on money invested, which leads to the company’s fast, worldwide growth. 

Powerful collaborations

TCS has made successful connections with different multinational companies like HP, Dell, Amazon, Bosch, etc. The company offers technical and systematic sustainable solutions to its clients with the help of different 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

TCS and Epic Systems had a legal fight in 2014, during which it was stated that the company used confidential corporate info improperly. In 2016, TCS was accused of repeating violations and was found guilty by a small penalty. The damages totaled a huge $900 million. Even so, the company ignored the court’s ruling, something that hurt the company’s image.

Sharp fall in performance

TCS subsidiary, Diligenta has given poorly continuously in its financial reports. As the company was not enough to perform well, the bottom line of TCS could not rise quickly. This, however, damaged the company’s overall performance.

Tata Consultancy Services needs to be more flexible to compete with the giants as well as companies that are creating tailored IT solutions and operations.

Opportunities of TCS

Go through are the major opportunities that TCS holds.

Mobility solutions

The digital space is constantly evolving and has led to an increase in the use of mobile phones and digital gadgets. TCS is a leading company and has the opportunity to leverage the emerging digital age. The company gives extra attention to the progress of business applications. These applications are expected to be the primary driving force behind mobility solutions for various companies.

M2M solutions

M2M services offered by Tata Consultancy Services include both wired and wireless communication media solutions. It uses the opportunities that have started to emerge here. There is a growing market for the M2M services and products that TCS provides.

Demand for cloud-based computing

TCS has well-prepared cloud infrastructure that will allow it to profit from the increased need for service. At present, the industry is turning to cloud services and indicates that it requires ongoing innovation and rapid digital advancements.

Digital transformation

With everything moving toward digital solutions, companies find themselves needing to change their digital economy. The main objective is to update and offer digital solutions, so the company plans to spend more on technology to support it.

Threats to TCS

TCS faces major threats like intense competition, legal complexities, etc.

Severe competition

Things are becoming more competitive in the IT industry. Because TCS holds a small part of the market, they continue to have price issues. IT companies including Accenture, Infosys, Deloitte, Capgemini and others are leading the industry with similar efforts. TCS needs to improve and introduce fresh solutions for clients to deal with competition.

Legal issues

Ongoing changes in laws affecting unions and nations can often trouble the way a company works. It affects how much TCS profits and earns.

Higher turnover rate

There is considerable attrition at TCS, which leads to damage to its ability to retain talent and its image. As a result, it becomes more costly to improve the skills of new hires and encourage leadership.

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.