Wipro Case Study Summary

1. Threat of Substitutes-Medium

The Indian IT industry enjoys a high growth rate due to the following reasons:

- Availability of highly skilled workforce

- Availability of large English speaking workforce

- Low cost of labor

- Favorable policies by government for IT companies

- Special economic zones which offer tax benefits to IT companies

However, competition is very high as other countries like China, Philippines, and Eastern Europe are emerging and provide a threat to Indian IT industry. These countries also offer the same cost advantage as Indian companies. However, this advantage should only in medium to long term. Also, for the same quality of products, the price quoted for the project is a major differentiator among companies.

2. Bargaining

There is also increased focus on high end IT work like KPO and consulting as the scope for innovation is expected to increase. Wipro needs to have a greater focus on operational efficiencies and cost as post recessionary environment, organizations would look out to lower their costs leading to increasing global sourcing. The company also needs to enhance focus on domestic markets to diversify risk and establish its position in the local market.

Weaknesses in the industry which Wipro needs to overcome include overdependence on US for revenues, excessive dependence on BFSI sector, and high rates of attrition. There would also be pressures to reduce pricing and hence Wipro needs to remain focused on tactical measures to achieve cost savings and greater productivity (Indian IT..., 2009).

Strengths and competitive advantages which exist for major players in the IT industry are breadth of service offerings which provides end to end services like consultancy; ease of scalability which is due to majority of India's population being less than 25 years old and English speaking professionals growing at a rapid rate; quality of processes which differentiate them from others in the industry; and global and 24/7 delivery capability which enable Indian IT companies to provide delivery capabilities from India by making use of excellent internet and telecommunications