The document discusses Infosys entering the markets of Saudi Arabia and Mexico by opening development centers in both countries. It analyzes the political, economic, social and technological environments of Saudi Arabia and Mexico using PEST analyses. Both countries present opportunities for Infosys but also challenges - Saudi Arabia due to its conservative social norms, and Mexico due to its unstable political situation and weak economy. The document also uses Porter's Diamond model to analyze factors contributing to Infosys' competitive advantage in the global IT industry, such as India's large skilled workforce, education system and supportive government policies.

1. Fuelling The Global Aspirations
Thakur Institute of Management Studies and Research
(Sunday, 16 October, 2016)
Presented by
Mr. Manish Tripathi ( I – 15-18-19)
Ms. Bandana Kotal (H-15-18-4)
Ms. Karishma Vazirani(H-15-18-11)

2. “Infosys is a global leader in technology services and
consulting. We enable clients in more than 50 countries to
create and execute strategies for their digital transformation.
From engineering to application development, knowledge
management and business process management, we help our
clients find the right problems to solve, and to solve these
effectively.”

3. Introducing Infosys
• Founded: 2 July 1981
• Founders: N. R. Narayana Murthy, Nandan Nilekani
N. S. Raghavan, S. Gopalakrishnan, S. D. Shibulal, K. Dinesh,
Ashok Arora
• Initial capital: ₹10,000 ( $250 )
• Headquarters: Bangalore
• Key people: Vishal Sikka (CEO & MD)
• Services: IT, business consulting and outsourcing services
• Revenue: US$9.75 billion (2016)
• Operating income: US$2.375 billion (2016)
• Profit: US$2.052 billion (2016)
• Number of employees: 197,050 (August 2016)

4. Domestic Business

5. Domestic Business
• NASSCOM pegs the Indian domestic IT services market
at $15 billion (Rs 78,600 crore)
• Historically domestic business grew at 25% as
compared to 5% globally
• Projected future growth are 30 – 40% domestic and 8%
global
• It started focusing on domestic business late in 2008
when it started separate unit for domestic market
• It wants to increase its domestic business to 3- 4% from
previous 2.6% (Rs 9,616 crore) in 2013

6. Domestic Clients
• It has 50 domestic clients, but 70-80 per cent of its
local business comes from the public sector
• Income tax department: maintains in CPU is Bangalore
and is paid for each income tax return filed
• India Post: mandated to enable banking and insurance
operations across all post offices
• Indian railways, corporate affairs ministry, etc.
• Now, it wants to focus on private clients and states
govt. as government contracts are slow to materialize
• It would like to have a 50:50 mix between the private
and the public sector

7. Domestic Business
• Latest Q1 17 results:
Total income: 16,782 Crores
Indian revenue: 2.7%
Revenue by geography
FY16 FY15
North America 62.7% 61.5%
Europe 23.0% 24.1%
India 2.6% 2.4%
ROW 11.7% 12.0%
Total 100.0% 100.0%

8. Global Business
85 marketing offices, 114 development centers, 1,045 clients across
50 countries

9. Infosys enters Saudi Arabia

10. Infosys in Arabia
• Forming a joint venture (JV) with Saudi Prerogative
Company (SPC) to provide IT services to customers in
the kingdom
• Infosys already has few customers using Finacle
• Infosys shares rose by 1.47% after this announcement
• The JV will be in the ratio of 70:30 (Infosys: SPC)
• The agreement is subject to the approval of the Saudi
Arabian General Investment Authority
• The investment will be Rs. 2.1 Crore in equity of JV
• Wipro and TCS already has strong presence in Saudi

11. PEST Analysis of Saudi Arabia

12. P – Political
Saudi Arabia has monarchy, a stable political
regime with constant policies, so the political risks
are bare minimum for Infosys

13. E – Economic
Saudi Arabian economy is oil based but now
shifting towards services and technology, its GDP
is $1,683 trillion (14th) and Per capita GDP as
$53,624 (12th), so its economic condition is
favourable for Infosys however lowering crude oil
prices are weakening the economy

14. S – Social
Saudi Arabia is an orthodox society, Islamic Law
Sharia is strictly followed, women have limited
freedom, this may limit the Infosys operations,
man power management and future growth

15. T – Technology
Because of higher GDP per capita, Saudi Arabia is
early adopter of technology, so the technological
atmosphere is favourable for Infosys in Saudi
Arabia, however it may be limited by societal
challenges

16. Infosys enters Mexico

17. Infosys in Mexico
• Infosys opened its first development center in Latin
America at Nuevo León, Mexico in 2007
• It has about 300 seats offering IT Help Desk, design of
web-interfaces, BPO and IT-related services
• Mexico is a nearshore development center for US
customers in same time zone and similar culture
• Infosys Technologies S. De RL De CV is 100% subsidiary
• However, it lagged in leveraging Mexica as TCS, Wipro,
etc. were already present about 8 years back

18. PEST Analysis of Mexico

19. P – Political
Mexico has been an unstable nation with history
of dictatorship, social unrest and violence, being
member of NAFTA it is highly affected by events in
USA and Canada, however its has same time zone
and culture as of USA and strong ties with India
after the visit of India PM, overall risky

20. E – Economic
Mexico GDP is $1.283 trillion (15th)
and Per capita GDP as $10,174 (65th), benefitted
by NAFTA, peso is at its historic low as 20 peso to
US $, high inflation, overall economic condition of
Mexico is poor and uncertain

21. S – Social
Mexico social values are similar to that of USA
along with same time zone, it’s a Spanish speaking
country where as USA has large Spanish
population, large graduate pool, so over all social
conditions are favourable

22. T – Technology
Because of being US neighbour, Mexico is an early
adopter of technology, so the technological
atmosphere is favourable for Infosys in Mexico

23. Michel Porter Diamond Model Analysis of Infosys

24. Michel Porter Diamond Model for the Competitive
Advantage of Nations

25. Demand conditions
While worldwide IT-BPM spend was USD 2.3 trillion,
growing at 4.6 per cent over 2013, global sourcing of
services grew by 10 per cent, and India continued to hold
on to its leadership position with a 55 per cent market
share, Domestic IT-BPM market at USD 48 billion is set to
grow faster than exports market at 14 per cent

27. Factors conditions
The most crucial element for the IT companies is the
human capital, With over 150,000 digitally skilled IT-BPM
employees, the industry is exponentially growing
capabilities that help clients go digital, The industry
currently employs >3.5 million – India’s largest private
sector employer. Indian IT workers’ wages are about 1/3 to
1/5 as compares to US workers.

28. Related & Supporting Industries
For the IT-ITeS sector, the most important supplier or
related industry would be education institutions, and
hardware. India has a large number of institutions that
provide cutting edge training on latest IT software,
solutions and systems which ensures availability of highly
skilled man power. India has also a strong back bone of
educational institutes that provide English education

29. Firm Strategy, structure and Rivalry
The Indian industry continues to develop capabilities
around traditional and emerging markets, verticals and
customer segments, expand global delivery presence, and
increase focus on high value services including product
development. India is also home to the fourth largest and
fastest growing digital start-up ecosystem in the world that
is engaged in developing innovative solutions

30. Firm Strategy, structure and Rivalry
India has a strong presence of domestic IT companies like
TCS, Wipro, Tech Mahindra, HCL Technologies, Cognizant,
Mindtree, NIIT, Rolta, etc. which complete among
themselves for domestic as well as international business
resulting in the improving the efficiencies of the company
and benefitting all stakeholders

31. Government
The new government’s technology reliant economic
growth agenda has significantly boosted domestic IT-BPM
market growth prospects and overall business confidence.
Digital India and Make in India, have helped drive a vision of
a technology enabled India. Digital India campaign
envisages a USD 20 billion investment covering mobile
connectivity throughout the country, re-engineering of
government process via technology and enabling e-delivery
of citizen services.

32. Chance
The strong bilateral relations between India and USA
(India’s largest IT export destination) and an ever
appreciating US $ has come as a boon for Indian IT export
companies. Worldwide demand for IT products and
solutions has increased and this has opened new
opportunities for Indian companies