SWOT Analysis of TCS – TCS SWOT Analysis [Detailed]

SWOT Analysis of TCS focuses on Strengths, weaknesses, opportunities, and threats. Strength and Weakness are the internal factors and Opportunities and Threats are the external factors that influence the SWOT Analysis of TCS.

Tata Consultancy Services is one of the prominent business conglomerates in India, and is considered a part of the group of “Tata group”. The core business of TCS also consists of providing IT services, consultancy, and business solutions. In Asia-Pacific, Africa, Middle East, Europe, and Americas, TCS operates in Americas. The total Revenue of TCS in the year 2020 was 23 Billion US Dollars. The total number of employees in TCs is 469261 as of December 2020.

Strengths are defined as the best thing every company does in its range of activities that can give it hold on its competitors. Weaknesses are used in areas in which improvement of the business or brand is necessary. Opportunities are the environmental avenues around the enterprise that can be used to increase its income. Threats are environmental factors that can adversely affect business growth.

Strengths in the SWOT Analysis of TCS – TCS SWOT Analysis

• Huge Customer Base: TCS serves clients in a variety of industries, including banking, financial services, retail, telecommunications, and media and entertainment. Exposure to diverse businesses dilutes the risks of a single market or industry’s over-dependence. TCS is also serving the Government of India for Passport services.
• Global Footprints: TCS’s presence across various markets in which the company has attempted to gain as much coverage as possible is its global footprint, which now stretches from North America, UK, Africa, Europe, and the Asia-Pacific regions. A presence in diversified geographical areas reduces corporate risk and provides TCS with a strong global image.
• Strategic Partnership: TCS established a strong partnership around the world with global enterprises. It worked with certain technological giants like Amazon, Adobe, Dell, Bosch, HP, etc. TCS offers both technologically sustainable and innovative business and strategic solutions through these partnerships.
• Strong Service Portfolio: TCS offers a strong and balanced service portfolio, which includes: application development and maintenance of Business Process Services (BPS), IT infrastructures, business intelligence, and more. Various business customers attract such a strong and diverse portfolio.
• Good Returns on Capital Expenditure: TCS is relatively successful at the execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Highly skilled workforce through successful training and learning programs. TCS is investing huge resources in the training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more

Weaknesses in the SWOT Analysis of TCS – TCS SWOT Analysis

• Legal Judgements: TCS engaged in a 2014 legal battle for alleged misuse of confidential information by Epic System against Epic Systems. In 2016, TCS was found to have been found guilty and charged $940 million in damages. TCS opposed and rejected the judgement by the higher competence. Such events influence the company’s image.
• Diligent decrease in performance: The TCS subsidiary Diligenta continuously operated below par. Diligenta. The enterprise is unlikely to improve performance quickly and therefore affect the bottom line of TCS.

Opportunities in the SWOT Analysis of TCS – TCS SWOT Analysis

• Digital Transformation: The world is digital and thus business dynamics are transforming the digital economy. The focus of TCS is to transform itself digitally and offer digital solutions. TCS should look forward to more spending on technology for digital transformation.
• Increasing Demand for Cloud-Based Computing: Digital technology and fast internet connectivity have emerged. In fact, in the next 5 years, expenditure on cloud services will increase in the next 19% in CAGR. The world is progressing toward cloud solutions. TCS has a strong cloud-based infrastructure, and is, therefore, ready to benefit from the generated requirement.
• Solutions from machine to machine (M2M): M2M solutions enable both wireless and wired communications systems. For M2M solutions, there are positive prospects in the future, and revenues are expected to be high. TCS has a complete range of M2M services that enable the demand for M2M solutions to be taken advantage of.
• Mobility Solutions: Enterprise mobility solutions are expected to be driven by business applications with a growing mobile worker population and the increasing use of sophisticated mobile devices. The demand for mobility solutions is latent and is projected to increase by 24.7 percent in a CAGR until 2022. TCS is well-positioned to benefit from its growing focus on the development of enterprise mobility solutions.

Threats in the SWOT Analysis of TCS – TCS SWOT Analysis

• Immigration and its Limitations: Indian IT companies are expected to suffer as they increase their cost and impact profitability, and therefore pose a risk to the industry with immigration rules, increased H-1B visa fees, and changing political circumstances in the US.
• Intense competition: IT companies such as Infosys, Wipro, Capgemini, Deloitte, Accenture, etc are faced with heavy competition. The result is price wars in the sector and the market share is limited.
• High Attrition rate: The Indian IT industry undergoes a high rate of attrition, which increases costs to provide new employees with skills and leadership development and also affects the company’s image.

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