Wipro Technologies ltd

WIPRO TECHNOLOGIES LTD - Term Project

STRATEGIC MANAGEMENT

Submitted to

Prof. Mr. Veeresh Sharma

Submitted by

N S Siva Shanmuga Priya

2011012

Indus World School of Business Date:

Greater Noida 12/03/2012

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Table of Contents
Content Page Number

Executive Summary 3

Vision & Mission Statement 4

External Audit 5

Demographic Forces 5

Economic Environment 5

Political and Legal Environment 6

Technical Environment 7

Social Environment 11

Industry Stage 11

Internal Audit 15

Brief History 15

Financials 16

Wipro Technologies deals in following businesses: 16

Group Companies of Wipro 17

Wipro Infrastructure Engineering

SWOT Analysis 21

Conclusion 24

References 25

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Executive Summary

Wipro is headquartered in Bangalore and has 28 development centers across India, Europe and USA and
also has 21 offices in USA, Canada, Finland, Taiwan, France and United Kingdom. Wipro has set a
vision for itself to become a US$ 5 bn company in the next couple of years. It aims to be top 10 IT
companies in the world' top IT company in India, among top 10 most favored employers in the world and
to be among the top 5 brands in India. Wipro is a global company with revenues of Rs 30922 MN for the
year 2001. The revenues for the company have been growing at an annual average rate of 23% and PAT
at an annual average rate of 50%. It employs total of 14000 employees out of which 11500 employees are
in IT business. Wipro follows Six Sigma quality systems and is also a SEI-CMM level 5 companies with
principal lines of businesses being information technology (IT) and consumer products. It also has other
businesses of fluid power, lighting, medical equipment products and financial services.IT, which includes
software services as well as hardware products, makes up the largest chunk of business for Wipro. It
accounts for 84% of total revenues of Wipro ltd. the Global IT services contributes 57% of total revenues
whereas Indian IT services contribute 27% of total revenues. The IT business makes up 84% of the
revenues of Wipro Limited and around 93% of its PBIDT.

Wipro has a very good client base with over 50 Fortune 500companies and over 100 leading Indian
corporates. In software Wipro is headquartered in Bangalore and has 28 development centers across India,
Europe and USA and also has 21 offices in USA, Canada, Finland, Taiwan, France and United Kingdom.
Wipro has set a vision for itself to become a US$ 5 bn company in the next couple of years. It aims to be
top 10 IT companies in the world' top IT company in India, among top 10 most favored employers in the
world and to be among the top 5 brands in India. Wipro is a global company with revenues of Rs 30922
MN for the year 2001. The revenues for the company have been growing at an annual average rate of
23% and PAT at an annual average rate of 50%. It employs total of 14000 employees out of which 11500
employees are in IT business. Wipro follows Six Sigma quality systems and is also a SEI-CMM level 5
companies with principal lines of businesses being information technology (IT) and consumer products. It
also has other businesses of fluid power, lighting, medical equipment products and financial services.IT,
which includes software services as well as hardware products, makes up the largest chunk of business for
Wipro. It accounts for 84% of total revenues of Wipro ltd. the Global IT services contributes 57% of total
revenues whereas Indian IT services contribute 27% of total revenues. The IT business makes up 84% of
the revenues of Wipro Limited and around 93% of its PBIDT.

Has emerged as the second largest player and is growing strongly and of toiletries has carved out a niche
in the premium segment. Wipro also had an interest in the financial services industry through a subsidiary
- Wipro Finance. This has proved to be a drain on the company for the last three years and this year the
company has divested a significant portion of this company and it is no longer a subsidiary of Wipro.
Wipro has a number of alliances with global leaders like Vignette, ATG (Art Technology Group), Open
Market, iPlanet for e-business; with Anther systems, Age corporation for m-commerce; with Neon,STC,
Vitria, Mercator, Seagull for Enterprise Application Integration; with SAP for ERP; with Siebel, Clarify,
Pivotal for Customer Relationship Management; with Computer Associates, Cisco, Nortel, Sun for
Technology Infrastructure Services etc.

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Wipro's Mission and Vision:

Having already achieved the pinnacles of process and quality credentials (through ISO 9000, SEI CMM,
PCMM and Six Sigma), Wipro's Vision is focused on attaining leadership in the areas of business,
customer and people.
Business Leadership: Among the top 10 Information Technology Services companies globally and the
No.1 Information Technology company in India.
Customer Leadership : The No.1 choice of customers through innovative solutions and Six Sigma
processes.
People Leadership: Among the top 10 most preferred employers globally by creating an environment of
empowerment, intellectual challenge and wealth sharing.
Brand Leadership: Wipro to be among the 5 most admired brand in India

Wipro enters into various industries for various businesses in a constant innovative manner. This shows
the firm’s strong approach of tapping new market with the spirit of achievement.

External Audit

Demographic Forces:

Demographic forces are outcomes of changes in the characteristics of a population, such as age, gender,
ethnic, origin, race, sexual orientation and social classes. Wipro in its milestone journey, understood very
well about the changing pattern of people, where it operates its businesses.

Women Employees in Wipro Technologies:

After India got freedom, the importance of women’s right and education gained more importance. By
around 1980’s women’s literacy rate in India is 25.6%, and then it started moving upward in each year.
Now it reached 65.4%, where the rate of increase is higher than male literacy increase rate. Even then
most companies may be more gender sensitive now. But the IT sector, where nearly 30% of the entire
workforce is comprised of women, is way ahead of most other industries when it comes to gender
neutrality and sensitivity. Wipro is one such company among those. The transition in the environment due
to IT industry in past two decades made a significant impact on women’s employment. Wipro gives equal
employment opportunity for women. It recently decided to increase its female work force rate from 13%
to 20%. That’s how it enriches and keeps its employees in a competitive high attrition rated industry like
IT, ITES, BPO and health care.

Three years ago, it conducted a study amongst its women employees, and came up with a 'Women of
Wipro' policy -- a policy that is designed to cater the needs of women.
As part of that initiative, it has introduced several programs, including a unique nine-month mentoring
program where senior managers mentor high performing women employees across levels, both on
professional and personal fronts.

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Economic Environment:

In the economic front, when Wipro ltd had been taken over by Mr. Azim Premji, he analyzed the
economic environment and found the opportunities for the expansion and diversification in various
industries. Even when it was under his father’s administration he took that into a consumer market
segment, where he had seen an opportunity to tap the consumer goods market, which was a main concern
of government to cater to the needs of domestic demands first.

The next opportunity seen by them was the boom of infrastructure industry in mid – 1970’s. The growth
of country has its one of the bases as infrastructure development which should be in both private and
government sectors. They foresee it in a better way and decided to enter in to a market where they could
achieve the top level, which was engineering and manufacturing of hydraulic and pneumatic cylinders.
This provides solutions by hydraulic and pneumatic cylinders, truck tipping systems for the trucks and
heavy industry machines and for army tanks and vehicles.

Wipro Technologies

From 1970’s to 1990’s:

At that time Indian economy was state-controlled and the state remained hostile to the software industry
through the 1970s. Import tariffs were high and software was not considered as a separate industry, so
that exporters were considered as ineligible for bank loans. Government policy towards changed in 1984.
Package of reduced import tariffs on hardware and software. This recognition of software exports as
a "de-licensed industry", i.e., henceforth eligible for bank finance. This encouraged our Indian domestic
players like Infosys , Wipro and TCS to concentrate in software industry very actively. The trend of
growth rate of India's economy demonstrates an upward trend. During the period of 1960 to 1980 the
economy saw a growth rate of 3.5% due to the roles of major industries in India GDP. In the years from
1980 to 1990 the growth rate showed a marked improvement of 5.4%. It was slightly lower in the period
from 1990 to 2000 which was at 4.4%, and the reason behind this is those companies were already into
the industry, quickly utilized the opportunity, others were struggling to come up. Then the start of 21st
century till 2008 the economic condition were favorable for this industry. The contribution towards
country’s GDP was increasing year on year from 2000 to 2008. Then the world economic slowdown hit
software industry in India and melted so many companies in the market.

The phase 2000 to 2008 saw a huge improvement and the growth rate of GDP were marked at 6.4%. The
IT/ITES industry's contribution to the country's GDP has been steadily increasing from a share of 1.2
percent in 1997-1998 to 5.2 percent in 2006-2007, according to NASSCOM-Deloitte study. The Indian
Software Industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 5.7 billion in
1999-2000. No other Indian industry has performed so well against the global competition. According to
statistics, India's software exports reached total revenues of Rs 46100 crores. The total share of India's
exports in the global market rose form 4.9 per cent in 1997 to 20.4 percent in 2002-03. The Indian
software industry was considered to be the biggest employer expected four million jobs in 2008. It
accounted for seven percent of India’s total GDP in the year 2008.

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Today, the Software Industry in India exports software and services to nearly 95 countries around the
world. The share of North America (U.S. & Canada) in India's software exports is about 61 per cent. In
1999-2000, more than one third of Fortune 500 companies outsourced their software requirements to
India. The software industry being the main component of the IT Industry in India has also helped the IT
sector in India to grow at a good pace. As per the proceedings taking place in the software industry the
future of the India Software Industry looks promising.

Political and Legal Environment:

From 1970’s to 1990’s:

The IT industry started growing under unfavorable conditions initially. Domestic markets were not
favorable enough and the government policies toward private enterprise were completely unfavorable.
The industry was begun by Bombay-based conglomerates which entered the business by supplying
programmers to global IT firms located overseas. At that time Indian economy was state-controlled and
the state remained hostile to the software industry through the 1970s.
Import tariffs were high (135% on hardware and 100% on software) and software was not considered as a
separate "industry”, so that exporters were considered as ineligible for bank loans. Government policy
towards changed in 1984. The Government has also played a vital role in the development of the India
Software Industry. In 1986, the Indian government announced a new software policy which was designed
to serve as a catalyst for the software industry. This was followed in 1988 with the World Market Policy
and the establishment of the Software Technology Parks of India (STP) scheme. Package of reduced
import tariffs on hardware and software (reduced to 60%). This recognition of software exports as a "de-
licensed industry", i.e., henceforth eligible for bank finance. This encouraged our Indian domestic players
like Infosys , Wipro and TCS to concentrate in software industry very actively. The trend of growth rate
of India's economy demonstrates an upward trend. In addition, to attract foreign direct investment, the
Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and
products.

After 1990’s:

When the liberalization took place, India’s Information technology had a huge advantage over it. Then
onwards the boom started and the big players like Wipro, Infosys, TCS started being stable enough to
survive in the industry. Liberalization gave them the opportunity to go global and to get their investment
to expand their businesses in various sub sectors like BPO and KPO and consulting. Those companies
were already into the industry, quickly utilized the opportunity, others were struggling to come up. Then
the start of 21st century till 2008 the economic condition were really good for this industry

Wipro Technologies:

The time line shows the consistent innovativeness of Wipro ltd throughout its journey. Wipro ltd was very
quick to react for governmental or legal environmental changes. Those immediate responses helped it to
build and grow its businesses to extreme level in several industries, in which they achieved and
continuing in top players list.

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One of the best examples for this quick move or reaction towards legal or governmental environmental
changes was to diversify in to IT hardware and later IT software industries. In 1977, IBM was in a
situation, which it needed to leave from India, because of government regulatory rules, Wipro decided to
enter Information Technology sector, by serving its domestic clients in IT Industry.

They responded quickly and diversified into Information Technology Industry in 1979. Wipro began
developing its own computers. In 1981 the launched the Hardware company which provided the computer
peripherals. This was the first in a string of products that would make Wipro one of India's first computer
makers. Simultaneously in 1980 Wipro moved into software development and started developing
customized software packages for their hardware customers.

Technical Environment:

Technical environment is an important entity in this industry. The technological innovations drove the
companies to get various dimensions across the industries. After 1990 in India all the industries started
realizing the importance of technology support to their businesses to improve their efficiency to survive in
the competitive market. The competition mostly based on price and quality of the products. To handle the
price sensitive customers the companies need to be cost effective in their operations and to be innovative
enough to keep their customers happy in order to retain them.
In all the industries new inventions started coming and the variety of products increased. The import of
goods has been increased. Some technologies invented and improved during the 1990s:
Software

 The World Wide Web and HTML are created by Tim Berners-Lee and eventually displace
the Gopher protocol.
 Microsoft introduces Windows 95 and later Windows 98 to the market, which gain immediate
popularity.
 The development of Web browsers such as Netscape Navigator and Internet Explorer makes surfing
the World Wide Web easier and more user friendly.
 The Java programming language is developed by Sun Microsystems.
 Businesses start to build E-commerce websites; E-commerce-only companies such
as Amazon.com, eBay, AOL, and Yahoo! grow rapidly.
 E-mail becomes popular; as a result Microsoft acquires the popular Hotmail.com webmail service.
 Instant Messaging and the buddy list becomes popular. AIM and ICQ are two early protocols.
 The Year 2000 problem (commonly known as Y2K), the computer glitch disaster expected to happen
on January 1, 2000.
 Microsoft Windows operating systems become virtually ubiquitous on IBM PCs.
 Development of the free Linux kernel is started by Linus Torvalds in Finland.

These innovations are all related to software and hardware industry. Big players were able to change
themselves according to the technical changes happened. They started providing their goods in a
competitive price, so as to capture the market. In order to compete with the big players with the price and
quality, everyone in the industry needs to change their technology. So the need of software and

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technological advancement favored positively to the IT industry. In the early 1990’s concept like
Business Process Re-engineering (BPR) and in later 1990’s and 2000 the Enterprise Resource Planning
(ERP) was new to the industry.

Business Process Re-engineering (BPR):

Business process re-engineering (BPR) began as a private sector technique to
help organizations fundamentally rethink how they do their work in order to dramatically
improve customer service, cut operational costs, and become world-class competitors. A key stimulus for
re-engineering has been the continuing development and deployment of sophisticated information
systems and networks. Leading organizations are becoming bolder in using this technology to support
innovative business processes, rather than refining current ways of doing work
Reengineering guidance and relationship of Mission and Work Processes to Information Technology.
Business Process Re-engineering (BPR) is basically the fundamental re-thinking and radical re-design,
made to an organization's existing resources. It is more than just business improvising. It is an approach
for redesigning the way work is done to better support the organization's mission and reduce costs.
Reengineering starts with a high-level assessment of the organization's mission, strategic goals,
and customer needs.

The role of information technology:
Information technology (IT) has historically played an important role in the reengineering concept. It is
considered by some as a major enabler for new forms of working and collaborating within an organization
and across organizational border.
Early BPR literature identified several so called disruptive technologies that were supposed to challenge
traditional wisdom about how work should be performed.

 Shared databases, making information available at many places
 Expert systems, allowing generalists to perform specialist tasks
 Telecommunication networks, allowing organizations to be centralized and decentralized at the same
time
 Decision-support tools, allowing decision-making to be a part of everybody's job
 Wireless data communication and portable computers, allowing field personnel to work office
independent
 Interactive videodisk, to get in immediate contact with potential buyers

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 Automatic identification and tracking, allowing things to tell where they are, instead of requiring to
be found
 High performance computing, allowing on-the-fly planning and re-visioning
In the mid1990s, especially workflow management systems were considered as a significant contributor
to improved process efficiency. Also ERP (Enterprise Resource Planning) vendors, such as SAP, JD
Edwards, Oracle, PeopleSoft, positioned their solutions as vehicles for business process redesign and
improvement.

Enterprise Resource Planning (ERP):
ERP is an organization’s management system which uses a software application to incorporate all facets
of the business, and automate and facilitate the flow of data between critical back-office functions, which
may include financing, distribution, accounting, inventory management, sales, marketing, planning,
human resources, manufacturing, and other operating units. ERP software, in turn, is designed to
improve both external customer relationships and internal collaborations by automating tasks and
activities that streamline work processes, shorten business process cycles, and increase user productivity.
A method for standardized processing, an ERP software application can both store and recall information
when it is required in a real-time environment. Companies often seek out ERP software systems to
pinpoint and mend inefficiencies in a business process or when a number of complex issues exist in the
business environment. ERP software systems are also implemented to enhance operational efficiencies,
achieve financial goals, manage and streamline the company’s operational processes, replace an existing
ERP software system that is out of date or unable to handle a company’s daily activities; or improve
information management through better data accessibility, decreased data duplication and optimal
forecasting features.
Many business owners see ERP software systems to be critical to their business functions, as they allow
companies to achieve absolute business process automation. While most companies use countless
processes, activities and systems to run operations, workflows and procedures can go awry when it comes
to today’s highly competitive marketplace, thus hindering productivity, growth and profitability. As a
result, the implementation of an ERP software application can result in increased productivity, reduced
operating expenses, improved data flow, and optimal performance management. ERP software comes in
many forms, including supply chain management, manufacturing, distribution, warehouse management,
retail management, and point-of-sale software. So when these changes happened Wipro ltd provided all
kind of software and did reengineering processes. Then they diversified to consulting sector. In 2002
Wipro ltd started its Wipro consulting Services and earned Rs 2 crores in the first quarter itself.

Six Sigma Process:

On the other hand they improved their efficiency by continuously following Six – Sigma Process. The
word is a statistical term that measures how far a given process deviates from perfection. Six Sigma is
named after the process that has six standard deviations on each side of the specification window. It is a
disciplined, data-driven approach and methodology for eliminating defects. The central idea behind Six
Sigma is that if you can measure how many “defects” you have in a process, you can systematically
figure out how to eliminate them and get as close to “zero defects” as possible.
Six Sigma starts with the application of statistical methods for translating information from customers
into specifications for products or services being developed or produced. Six Sigma is the business
strategy and a philosophy of one working smarter not harder.

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One sigma gives a precision of 68.27%., two sigma, of 95.45% and three sigma of 99.73%, whereas Six
Sigma gives a precision of 99.9997%.Although 99.73% sounds very good, it slowly dawned on
companies that there is a tremendous difference between 99.73% and 99.9997%. For example for every
million articles of mail, the difference is between 66,738 lost items and 3.4 lost items.

Evolution of Six Sigma at Wipro
Wipro is the first Indian company to adopt Six Sigma. Today, Wipro has one of the most mature Six
Sigma programs in the industry ensuring that 91% of the projects are completed on schedule, mush above
the industry average of 55%.
As the pioneers of Six Sigma in India, Wipro has already put around ten years into process improvement
through Six Sigma. Along the way, it has scaled Six Sigma ladder, while helping to roll out over 1000
projects. The Six Sigma program spreads right across verticals and impacts multiple areas such as project
management, market development and resource utilization.

Six Sigma at Wipro simply means a measure of quality that strives for near perfection. It is an umbrella
initiative covering all business units and divisions so that it could transform itself in a world class
organization. At Wipro, it means:

 Have products and services meet global benchmarks
 Ensure robust processes within the organization
 Consistently meet and exceed customer expectations
 Make Quality a culture within.

Six Sigma Consultancies at Wipro:

Wipro’s Six Sigma consulting experience has peaked with the indigenous development of new
methodologies that it takes to its customers. As Wipro continues Six Sigma consulting journey, it builds
on its expertise and experience- to provide enterprise-class coverage of topics in business process
management and information technology systems integration. The focus is on supporting the project
needs and is also integrated with other methods to support process needs. Currently there are over 200
PMI certified consultants at Wipro.

The Wipro quality consulting group trains in achieving the precision of Six Sigma with Wipro’s own
methodologies, training capabilities and global experience. Wipro also helps in institutionalizing Six
Sigma across the organization for transformation.

Wipro provides consulting in institutionalizing an organization wide Six Sigma program that specializes
in implementation across IT development, production support and core business operations

Wipro offers the following Six Sigma consulting services

 Six Sigma institutionalization
 Problem solving using six Sigma
 Six Sigma training

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Towards this, Six Sigma concepts have played an important role:

 Improving performance through a precise quantitative understanding of the customer’s
requirements thereby bringing in customer focus
 Improving the effectiveness in upstream processes of the software development life cycle by
defect reduction (software defects reduced by 50%) and cycle time reduction (rework in software
down from 12% to 5%).
 Waste elimination and increased productivity up to 35%.
 Cost of failure avoidance (installation failures down from 4.5% to 1% in hardware business).
 Tangible cost savings due to lower application development cost for customer.

Social Environment:

As time ran, the threat of new entrant in this industry is high because of low investment needs. So the
existing companies need to come up with innovative solutions to attract and keep its customers and its
shareholders to be sustained in the market. Then they came with Green IT solutions, which is eco –
friendly hardware components, reusable and made of low toxic materials. At the same time Wipro ltd was
very clear about their path they had chosen and the position they wanted to maintain. They had financial
services and Wipro net. When other players came in Wipro wasn’t able to perform better, because the
other players were having those businesses as their core, so they excelled in that. After all players came in
Wipro was not performing well. So the company decided to quit those two services in 2002.

Industry Stage:

INTRODUCTION TO IT INDUSTRY IN INDIA

Information Technology (IT) industry in India is one of the fastest growing Industries. Indian IT industry
has built up valuable brand equity for itself in the global markets. IT industry in India comprises of
software industry and information technology enabled services (ITES), which also includes business
process outsourcing (BPO) industry and Knowledge process outsourcing Industry. Now a day’s company
combines consultancy services also with this industry to provide end to end services. India is considered
as a pioneer in software development and a favorite destination for IT enabled services. The origin of IT
industry in India can be identified from 1974, when the mainframe manufacturer Burroughs, asked its
India sales agent, Tata Consultancy Services (TCS), to export programmers for installing system software
for a U.S client. The IT industry was originated under unfavorable conditions. Local markets were not
favorable enough and the government policies toward private enterprise were hostile. The industry was
begun by Bombay-based conglomerates which entered the business by supplying programmers to global
IT firms located overseas. During that time Indian economy was state-controlled and the state remained
hostile to the software industry through the 1970s. Import tariffs were high (135% on hardware and 100%
on software) and software was not considered as a separate "industry”, so that exporters were ineligible
for bank finance. Government policy towards IT Sector changed when Rajiv Gandhi became Prime
Minister in 1984. His New Computer Policy (NCP-1984) consisted of a package of reduced import tariffs
on hardware and software (reduced to 60%), recognition of software exports as a "de-licensed industry",
i.e., henceforth eligible for bank finance and freed from license-permit raj, permission for foreign firms to
set up wholly owned, export-dedicated units and a project to setup a chain of software parks that would

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offer infrastructure at below-market costs. These policies laid the foundation for the development of a
world class IT industry in India. Today, Indian IT companies such as Tata Consultancy Services (TCS),
Wipro, Infosys, and HCL etc… all are renowned in the global market for their IT prowess.

Reason for India's emergence as key global IT player:

Indian Education System

The Indian education system places strong emphasis on mathematics and science, resulting in a large
number of science and engineering graduates. Mastery over quantitative concepts coupled with English
proficiency has resulted in a skill set that has enabled India to reap the benefits of the current international
demand fort.

High Quality Human Resource

Indian programmers are known for their strong technical and analytical skills and their willingness to
accommodate clients. India also has one of the largest pools of English-speaking professionals.

Competitive Costs

The cost of software development and other services in India is very competitive as compared to the
West.

Infrastructure Scenario

Indian IT industry has also gained immensely from the availability of a robust infrastructure (telecom,
power and roads) in the country. In the last few years Indian IT industry has seen tremendous growth.
Destinations such as Bangalore, Hyderabad and Gurgaon have evolved into global IT hubs. Several IT
parks have come up at Bangalore, Hyderabad, Chennai, Pune, Gurgaon etc. These parks offer Silicon
Valley type infrastructure. In the light of all the factors that have added tithe strength of Indian IT
industry, it seems that Indian success story is all set to continue.

Porters Five Force Model:

Threat of new entrant: High

Economies of scale: High

Though there is a low capital investment needed but due to capabilities of resources pool and brand
building takes a long time to achieve economies of scale. New entrants will have to survive till they
achieve the economies of scale. In a dynamic industry, where each and every day a new software and
technology coming up, it’s difficult for new entrants.

Proprietary product differences: Medium

It can bring the differences in individual’s brand and enable them to attract premium charge for their
product. As in Indian IT industry, we have enough number of big players like Wipro Technologies,

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Infosys, TCS, Patni, CISCO, HCL, CTS etc…. So even Wipro is a well-known companies its power to
charge a premium price is not high, but medium.

Brand Identity: High

Plays vital role in IT industry to get a long term deals. The global presence of Wipro Technologies is
an identity for it in domestic market.

Switching Cost: Low

As all the companies in the industry provides almost same kind of solution in their specialization area,
the clients don’t have any switching cost or very low switching cost and they can have the same quality
service from other players.

Capital Requirement: Low

So as to start an IT company in India it’s not difficult, but the difficulty lies with the investment in
people’s training and development and brand building. As we are well known the fact of attrition rate in
Indian IT industry, the cost required is quite high.

Government Policies: Low

Government has been favoring so far with IT industry. So there will not be intense problem other than
some decisions to make the stability, to prevent the industry form economic meltdown.

Bargaining Power of suppliers: Low

Here the suppliers are the consultants who provide the Human Resource for the company, other suppliers
like hardware parts, software trained people etc….

Differentiation of Inputs: High

It’s a people oriented business and people as an input to the business or to the process can make a huge
difference.

Supplier Concentration: Medium

It is all about the talented and skilled people availability in India and the centers, where the company
operates. It is high in India especially in urban and metro areas.

Impact of inputs on cost or differentiation: High

Again people as an input can create a dramatic difference on cost as well its impact on company’s
image. The surveys like the top ten companies people wish to work, creates an impact on the talent pool
they have and that they are going to hire.

Threat of forward integration: Low

The forward integration is possible in this Industry, but requires skilled people. For Example a company
A provides an end to end solution like from Data storage to software and Hardware solutions to a client B,

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but after some time company B can decide itself to acquire a IT department team instead of outsourcing
it.

Bargaining power of buyers: Low

Buyer concentration: High

As maximum customers of Wipro technologies has been from US, UK and Europe, the sustainability of
them is very high. The they can rely on them to some extent.

Buyer Volume: High

Wipro has its large client base and it is providing integrated services. Each and every year it is adding
to its customer base. So the buyer volume is high.

Buyer switching cost: Medium

Even though the switching cost is low in this, the contracts are revised quarterly. Wipro always
provides a high quality service to its clients. So the satisfaction of customers is high.

Ability to integrate backward: Low

Most of the companies for integrating back ward, it needs investments. So small startup companies has
less capacity to that. At the same time large companies can do it if they feel their supplier’s bargaining
power goes up. So some of the MNC’s are setting up their own development center.

Substitute product: High

The number of substitute product or service is more easily available in the industry for low cost. The
quality and the reliability of those products are sometimes creates problem.

Price / total purchase: High

As the competition is getting tougher, the price is an important factor. Even then in this industry the
customization and the full solution model of products having the control over price factor.

Product difference: Low

Basic products and services are more over same. There is hardly any difference among big players.

Threat of substitutes: High

Relative price performance of substitutes: high

Here the substitutes are other major player offering the same services at different price or small players
offering the same with very low cost.

Switching cost: Low

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It’s low, because the services are of same kind with little brand differentiation. So as to get the service
from a cost effective company, customers will not think much to switch.

Buyer’s propensity to substitute: Medium

For the same quality substitute buyer’s propensity to substitute is high. At the same time for quality
reduced service or not a complete solution or for not having an end to end solution, clients show fewer
propensities to substitutes.

Threat of rivals: High

Industry growth: High

Attracts more player in the industry, as the investment needed for a startup is comparatively less and
more profitable than other industry.

Fixed cost / value added: High

When an existing player is in industry, the firm can achieve the economies of scale over a short period
of time if we consider the industry as of now. So it depends upon the economies of scale.

Capacity of Industry: High

As the industry is growing in a fast pace. The client is also increasing with the need of developing their
business with technological advancements. So the opportunity for new entrant is always there and the
industry can have the capacity to give a place to all incoming and existing players.

Product difference: Low

Basic products and services are more over same. There is hardly any difference among big players. So
the product difference is very low.

Brand identity: Medium

Every company has its own identity in this industry in case of all factors like customer’s preferences,
employee’s preferences to work in a particular company, other company’s preferences to create a joint
venture.

Diversity of Competitors: High

There are lots of competitors providing variety of integrated services so as to retain their clients. There
are global MNCs each year coming to India and captures and splits the market share of big players.

Exit barriers: High

Once the companies are entered in to contracts, it would be very difficult to terminate them. The reason
it has is the huge money involved in it in long term process. The contracts basically would be for more
than 5 to 10 years. The contracts having more credibility services, which should be provided by the

15

company like data management service for a bank includes all its data about customer accounts. SO a
company which signed for this contract can’t stop in middle.

Internal Audit

Wipro Infotech is a part of INR 31763.9 crores Wipro Limited with INR 86504. 5 crores market
capitalization. Wipro is known for its quality. It is the first global software company to attain Level 5 SEI-
CMM as well as the first IT Company in the world to achieve Six Sigma and Level 5 PCMM. Wipro has
13 regional offices across India. It also has offices in different places across the world including Egypt,
UAE, KSA and Bahrain.

Brief History:

Wipro Ltd. started its journey in 1947 as a vegetable oil trading company (Western India Palm Refined
Oils) in Amalner, Maharashtra, India. It was M. H. Premji, father of its current Chairman Azim Premji,
who founded Wipro. After his sudden demise in 1966, his son, a Stanford University graduate in
Electrical Engineering, took the onus of leadership at the age of 21. Azim Premji repositioned the
company into a consumer goods company and started producing hydrogenated cooking oils, laundry soap,
wax and tin containers. Later Wipro Fluid was set up, which started manufacturing hydraulic and
pneumatic cylinders for the industrial trucks and heavy machines. In 1977, after IBM left Indian IT
sector, Wipro entered into the market. It started developing its own computers within a couple of years.
Wipro Ltd. started selling finished products. It licensed technology from Sentinel Computers in U.S.
Wipro is also the manufacturer of India's first mini computers.

In 1980, Wipro Ltd. moved towards software development, when they started providing customized
software to their hardware customers or clients. This was just a beginning of a new era for Wipro. It
spread its roots off shore in U.S. in 1992. By 2000, Wipro Ltd. managed to get enlisted on the New York
Stock Exchange.

Wipro’s evolution from inception is given at the end of this project.

Financials:

Wipro Limited saw a stunning growth in terms of its revenue which soared up by 450% from 2002 to
2007. In the quarter ended September 30, 2009, the IT Services business of Wipro Ltd. reported revenue
of 49.96 billion with a growth rate of 5% year on year. It also recorded PBIT of 11.87 billion with a
growth rate of 19% year on year. During the quarter, the operating income to the revenue was 23.8%.
During the quarter, Wipro Ltd. also added 37 new clients to its list. Currently as of 2011 December,
Wipro has employee strength of 120,000.

Innovation at Wipro Ltd:

As we enter the second decade of the 21st Century, change seems to be the only constant. This dynamic
means that businesses are facing challenges and opportunities which are very different to what they were
a decade ago or even a year ago. The world of tomorrow is one where uncertainty and fierce global

16

micro-competition is going to be the norm. Rightly so, the world is looking up to innovation in the
triangle of technology, sociology and the environment to help them deal with these changes.

This innovation is coming to the fore in various hues and has shifted from the core to the edge of the
enterprise. This is being driven by the rise of trends like analytics, mobility, cloud and as-a-service, even
as the future will see newer technologies such as machine-to-machine (M2M) communication and natural
user interface (NUI) fast becoming mainstream. In this fast changing world, Wipro believes it can
leverage on its institutionalized innovation culture to push the boundaries for delivering solutions that
provide enhanced value and direct impact for our customers.

This culture has brought to the fore innovations like India's most powerful supercomputer, a cost-effective
Base Terminal Station designed for GSM networks in underserved markets, a mobile switching router for
emerging markets, connected home concept and Wipro Energy Manager that uses M2M communication,
among others. Taking forward our legacy in pioneering the ODC concept, Wipro has also developed
application-based innovations like Flex and Cigma delivery models which are service-based as opposed
to resource-based.

Wipro is also partnering with European research institute IMEC to co-innovate and develop next-
generation intelligent systems based on nano electronics and aimed at emerging markets through an
initiative called Applied Research in Intelligent Systems Engineering (ARISE).

Wipro Technologies deals in following businesses:

 IT Services: Wipro provides complete range of IT Services to the organization. The range of
services extends from Enterprise Application Services (CRM, ERP, e-Procurement and SCM) to
e-Business solutions. Wipro's enterprise solutions serve a host of industries such as Energy and
Utilities, Finance, Telecom, and Media and Entertainment.
 Product Engineering Solutions: Wipro is the largest independent provider of R&D services in
the world. Using "Extended Engineering" model for leveraging R&D investment and accessing
new knowledge and experience across the globe, people and technical infrastructure, Wipro
enables firms to introduce new products rapidly.
 Technology Infrastructure Service: Wipro's Technology Infrastructure Services (TIS) is the
largest Indian IT infrastructure service provider in terms of revenue, people and customers with
more than 200 customers in US, Europe, Japan and over 650 customers in India.
 Business Process Outsourcing: Wipro provides business process outsourcing services in areas
Finance & Accounting, Procurement, HR Services, Loyalty Services and Knowledge Services. In
2002, Wipro acquiring Spectramind and became one of the largest BPO service players. It
currently has 22,000 employees as of December 2011.
 Consulting Services: Wipro offers services in Business Consulting, Process Consulting, Quality
Consulting, and Technology Consulting.

Group Companies of Wipro:

17

 Wipro Infrastructure Engineering: Wipro Infrastructure engineering was Wipro Limited’s
first diversification in 1975, which addressed the hydraulic equipment requirements of mobile
original equipment manufacturers in India. Over the past 25 years, the Wipro Infrastructure
Engineering business unit has become a leader in the Hydraulic Cylinders and Truck Tipping
Systems markets in India, and intends growing its business to serve the global manufacturing
requirements of Hydraulic Cylinders and Truck Tippers. It has emerged as the leader in the
hydraulic cylinders and truck tipping systems market in India.

 Wipro Infotech: Wipro Infotech is the leading strategic IT partner for companies across India,
the Middle East and Asia-Pacific - offering integrated IT solutions. They plan, deploy, sustain
and maintain your IT lifecycle through our total outsourcing, consulting services, business
solutions and professional services. It is one of the leading manufacturers of computer hardware
and a provider of systems integration services in India.

 Wipro Technologies - Wipro Technologies is the global IT services business division of Wipro
Limited. It is a global services provider delivering technology-driven business solutions that meet
the strategic objectives of our clients. With over 46 offices around the world, Wipro
Technologies is the No.1 provider of integrated business, technology and process solutions on a
global delivery platform.


Wipro Consumer Care and Lighting: Wipro Consumer Care and Lighting, a business unit of
Wipro Limited, has a profitable presence in the branded retail market of toilet soaps, hair care
soaps, baby care products and lighting products. It is also a leader in institutional lighting in
specified segments like software, pharma and retail. It manufactures and markets the Wipro
brand of luminaries. Wipro Lighting offers lighting solutions across various application areas
such as commercial lighting for modern work spaces, manufacturing and pharmaceutical
companies, designer petrol pumps and outdoor architecture.

 Wipro GE Medical Systems: Wipro GE Medical Systems is a joint venture between Wipro and
General Electric Company. As a part of GE Medical Systems South Asia, it caters to customer
and patient needs with a commitment to uncompromising quality. Wipro GE is India’s largest
exporter of medical systems, with unmatched distribution and service reach in South Asia. Wipro
GE pioneered the manufacture of Ultrasound and Computed Tomography systems in India and is
a supplier for all GE Medical Systems products and services in South Asia.

Wipro Technologies:

Wipro Technologies is a global services provider delivering technology-driven business solutions. Wipro
is the No.1 provider of integrated business, technology and process solutions on a global delivery
platform. Azim Premji is the Chairman of Wipro Technologies. He took over the mantle of leadership of
Wipro at the age of 21 in 1966. Under his leadership, the fledgling US$ 2 million hydrogenated cooking
fat company has grown to a US$1.76 billion IT Services organization serving customers across the globe.

18

Wipro is presently ranked among the top 100 Technology companies in the world. It has 120,000
employees, serves 592 clients, and has 46 development centers across globe.

Alliances:

Wipro works with alliance partners to offer compelling business propositions for the customers. Our
alignment with the technology leaders across various industries enables us to provide our customers with
world-class solutions that transform their business processes.

Key benefits:

• Creating competitive advantage by understanding the industry and bringing the right
combination of products and services expertise to create a solution
• Reduce IT costs by developing and implementing cost-effective solutions at scale
• End-to-end solution thereby minimizing risk
• Seamless solutions for the client
• Reduced IT risks

Achievements of Wipro Ltd:

 First Indian IT Service Provider to be awarded Gold-Level Status in Microsoft's Windows
Embedded Partner Program.
 World's largest independent R&D Services Provider.
 World's 1st PCMM Level 5 software company.
 World's 1st IT Services Company to use Six Sigma.
 The first to get the BS15000 certification for its Global Command Centre.
 Among the top 3 offshore BPO service providers in the world.
 Only Indian company to be ranked among the 'Top 10 Global Outsourcing Providers' in the
IAOP-Fortune Global 100 listings.
 First company in the world to be certified in BS 7799 (2002) security standards.
 Ranked 23rd in the Top Companies for Leaders’ global list announced by Aon Hewitt, The RBL
Group and Fortune.
 ASTD BEST award for training and development.
 IT Outsourcing Project of the Year 2011 award for innovation and achievement in outsourcing
industry.
 NASSCOM Corporate Award for Excellence in Diversity and Inclusion.
 National Telecom Award for Excellence in Infrastructure for Application Services.
 SAP ACE Award for Customer Excellence.
 The Outsourcing Excellence Award for Best IT Enablement in BPO.
 BPO Excellence Award for Outstanding Work in Utilities Company in UK.
 Awarded with DL Shah National Quality Award.

19

Wipro Technologies:

As of 2012, Wipro is the second largest IT services company by turnover in India, employing about
120,000 people worldwide as of December 2011. Provides outsourced research and development,
infrastructure outsourcing, business process outsourcing (BPO) and business consulting services.

This data is based on software and other IT application sales of respective companies. The survey was
conducted by Rediff.com and Economic times in Dec 2011.

Share of Software Industry

Tata consultancy
8% services
10%
39% WIPRO
13%
30% INFOSYS

HCL Technologies

others

20

Wipro’s market share in BPO
GENPACT

2%
7%
10% 30% WNS Global Services

WIPRO
25%
26% HCL BPO

ICICI OneSource

others

SWOT ANALYSIS

In this internal analysis usually SWOT analysis is used. It is an effective way to use this and will be easy
to identify the company’s strengths and weaknesses. The opportunities and threats we found in the
external analysis will be matched here and the company’s core competencies also considered and will
work on the improvement area.

WIPRO Technologies:

Strengths:

Global R&D facility – Continuous Innovation: Wipro has global Research and development facility. It
keeps on innovating new products and services in order it retain its customer and to attract new clients
and shareholders in the market. Its global R & D is a very strong strength for it.

Vast clientele base: its large client base throughout the world gives strength for it. In its starting years it
first headed into hardware business, then it started providing software solutions to them then diversified

21

as a company. The global clients of Wipro Technologies are always strength for it. The down turn in one
economy can be pacified by performing well in other economy.

High skilled employees across industries: Wipro’s one of the main strength is its highly skilled
employees. The HR practices they follow are very much suitable and sustainable, where in IT industry the
attrition rate is very high.

Economies of scale - Low cost advantage: As they have already had their domestic as well as their global
clients, this is an advantage over all. The economies of scale can be achieved easily when compared to
start ups. For example when they started the Wipro Consulting Company, it earned 2 Crores within its
first quarter of operations, because the client base is huge and the economies of scale are also high for it.

Strong brand value: As Wipro Technologies is the 2nd largest IT end to end service provider in the world;
it has attained its brand value. So customers will prefer Wipro technologies for its quality.

Client satisfaction - Quality products & Delivery capabilities: Wipro Ltd achieved all these because its
continuous assured quality providing capacity and commitment. The clients are more satisfied with
Wipro.

Alliances with top global companies – GE, Cisco, EMC, Microsoft, Oracle and SAP: To be a global
player, a company needs to have alliance with various other companies to provide on time service and
delivery. Certainly it’s one of its main strengths. The network strength is very high.

Green thoughts - Eco friendly products: Where Wipro operates, the innovation keeps on gaining its own
value among people. Its green thoughts like Green IT that is reusable computer peripherals and less toxic
material usage for its production are their strength. The green office area – an innovative thought, which
benefits its businesses.

Customized products: It provides customized products for several industries like aerospace, Engineering
Infrastructure, Medical equipment’s; Lighting solutions etc… are its strengths.

Weaknesses:
 Low operating margin of the other group companies: Even though IT sector creates huge profits for
Wipro Ltd, the other group companies like customer care and Lighting is just accounting for only 9%
for the total revenue. So a conglomerate company like Wipro will get affected if one of its main
sectors fails. There are other players who are especially in those same sectors who already excelled in
that sector like HUL, ITC etc….

 Concentrating on mature markets: Domestic market is huge but is underdeveloped. If Wipro
Technology considers capturing the remaining under developed rural areas like sub metros, it could
have a very strong base in India and can improve its share and can be a No 1 player in IT sector.

22

Opportunities:

 In the consultancy area and BPO area: As Wipro Consultancy is in the list of top consultancies, it
could achieve more with its vast client base. In BPO industry it is in 2nd top company in India. It
could achieve to come to first place.
 Emerging technology: As it has skilled work force, it always have opportunity to come up with new
technologies.
 Huge global market: As it is already a renowned global company, it has a huge scope in global
market. The company has entered into the global market so now it’s the biggest opportunity available
to the company.
 Huge potential in domestic market: It has potential to capture more market share in Indian It industry.
So it has both global and domestic opportunity to expand.

Threats:

Increasing cost of human capital: As it is well known about IT and BPO industry, the attrition rate is
always high. So hiring new people is a huge cost incurring process every year. Then the Training and
Development cost is also highly cost counting part in IT industry.

Intense rivalry in It Industry: The rivalry among Indian It industry is very high, because the entry

Barrier is very low. It needs a low investment cost to start an IT company.

Environmental change: Changing Environmental conditions like economic meltdown and Changing
technology is a big threat to companies in IT industry. It will face fierce competition in the areas of e-
business and ASP services. Slowdown in the banking, financial services and insurance (BFSI) sector.

Other conglomerates like ITC, Reliance, Aditya Birla group may enter in to various industries and t
Take over the benefits of WIPRO.
Exchange rate: This can be a threat to the company as the company is making profits due to the high
exchange rate and if this rate comes down in future it can lead to a major problem for the company.
Changing Laws and Regulations: Government rules and regulation change may be a threat for IT
industry companies, exactly for Wipro Technologies, which relies more on overseas projects.

Strategy of Wipro Technologies:

In this changing day to day technological environment the blurring of geographic boundaries and the need
to expand in global emerging markets, business leaders at the world’s largest companies see strategic
innovation as crucial to their future growth plans, according to an exclusive Wipro-Forbes Insights

23

survey. The in-depth insight study examined and summarized the views of over 300 CEOs and other C-
level executives at global enterprises.

Suggestions:

Adopt the Dynamic High Technology Strategy: Speed-to-market is necessary for successful innovation.
Getting a product or service swiftly out to market is a critical business innovation tactic. Cost remains the
biggest hurdle to fostering innovation. It will be always barriers for R & D.
Issues related to the regulatory environment, and finding and retaining top talent.
Paying attention to best practices is the most effective way to foster innovation. Other innovation tactics
included technology, data-based decision making, and customer collaboration.
Clear business case for using “green” practices. Green business practices as part of their corporate
innovation strategies. Green IT is a priority for more than three quarters of companies.
Increase Global Presence: China holds the greatest opportunity, followed by India, Southeast Asia, and
Eastern Europe.
More collaborations with other players; reduce dependence on only few players

Conclusion:

Till today Wipro has been known for being very process oriented with a focus on quality and cost
savings. Wipro long term strategy should be to create a brand image and be known for innovation. Wipro
should invest in R&D and Market research, so that it is able to innovate new solutions for clients to cut
costs or reduce time to market or improve reliability.

References:

http://wiki.answers.com/Q/What_is_Wipro's_mission_and_vision#ixzz1ottCfYGM

24

http://www.anil2u.info/2010/03/top-100-it-companies-rank-wise-list/

http://www.indianmirror.com/indian-industries/information-technology.html

http://books.google.co.in/books?id=EPai4FgFA2YC&pg=PA165&lpg=PA165&dq=bargaining+power+for+
wipro&source=bl&ots=rlezwgfQVN&sig=LJY5BIW7tS3DPu9mNub0_HY4OW4&hl=en&sa=X&ei=_fNZT-
7wIc_JrAf1jsGHDA&ved=0CEUQ6AEwBA#v=onepage&q&f=false

http://www.answers.com/topic/wipro-technologies

http://www.equitymaster.com/research-it/sector-info/software/

http://www.thehindubusinessline.com/companies/article2048647.ece

http://wipro.co.in

25

Wipro Technologies ltd

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