Established in 1968, Tata Consultancy Services (TCS) is a subsidiary of the Indian multinational conglomerate, The Tata Group. With a workforce spread across 46 countries, TCS helps companies bring about a change in society, and they provide them with information technology and consultancy services. As you read, you will learn about the internal and external factors that influence the swot analysis of TCS.
SWOT analysis means an analysis of Strengths, Weaknesses, Opportunities, and Threats. Strengths are every company’s skills and qualities that make it stand out from its competitors. Weaknesses are areas or elements of a company that have room for improvement. Opportunities are the areas a firm needs to focus on to enhance its output. And lastly, Threats are the factors that can harm a business’s operations.
Let us know how and why TCS is an industry leader today.
SWOT Analysis of TCS
Vast clientele: TCS caters to a large audience covering industries such as financial services, media, entertainment, banking, and telecommunication. It has worked with many industry leaders and has helped them establish their digital presence. By diversifying the business, the company has reduced the risk it would have faced for being dependent on a single industry.
Employee quality: TCS has performed well with the world’s finest consultants. The company regularly invests in employee development workshops and programs to upgrade the employee’s skills.
Outstretched worldwide: Spread across various regions, TCS has created a solid global reputation for itself. Its worldwide presence stretches from Asia-Pacific regions to North America, the UK, Europe, and Africa.
Well-planned partnership: TCS established successful connections with various multinational companies such as Amazon, Dell, Bosch, Adobe, HP, etc. It provides strategic and technically sustainable solutions to all its clients through these partnerships.
Diverse service portfolio: The company has a decentralized portfolio that includes services such as IT infrastructure, business intelligence, application development, and maintenance of Business Process Services (BPS). Many business clients attract such diversified and efficient portfolios.
Return on Investment: With all the above-listed strengths under the TCS SWOT analysis, the company successfully executes its new projects and ventures, thus, generating high returns on capital expenditure.
See also: The SWOT Analysis of Nestle
The SWOT analysis of TCS provides us with the following two weaknesses of the company:
Legal challenges: Epic Systems and TCS had a legal dispute in 2014, and the company was accused of misappropriation of confidential corporate information by Epic Systems. In 2016, TCS battled in court for its reputation and was proven guilty with $940 million in damages. TCS disagreed with and neglected the court’s decision, ultimately harming the company’s image.
The decline in performance: The subsidiary of TCS, Diligenta, had displayed continuous poor performance in its financial reports. Due to the company’s inefficiency, TCS’s bottom line would not rise immediately. This, in turn, harmed the company’s overall performance.
Not agile: The company needs to be more flexible and agile to compete with unicorns and SaaS (software as a service) firms emerging in specialized IT operations and solutions markets.
Digitalization: According to the SWOT analysis of TCS, the company is focusing on providing digital solutions and increasing its investments in technology.
Provision for mobility solutions: The emergence of the digital age has increased the use of mobile phones and digital gadgets. As a well-positioned company, TCS business got the opportunity to take advantage of the scenario. The development of business applications is given extra attention. These applications are expected to be the main driving force behind mobility solutions for various enterprises.
Machine-to-machine (M2M) solutions: TCS made provision for machine-to-machine solutions possible, be it wired or wireless forms of communication. The company took advantage of promising and significant earning opportunities in this field. Today, TCS has a complete range of M2M services, increasing the demand for M2M solutions.
Creating demand for cloud-based computing: With a strong cloud-based infrastructure, TCS is all set to benefit from the demand created for these services. The world is heading towards cloud solutions to value innovation and speed up the digital transformation.
The last component under the SWOT analysis of TCS is Threats.
Limitations due to laws: Legal regulations in countries and unions can disturb the company’s operations, which, in turn, impacts the revenue and profit collection.
Increasing competition: With increasing competition, TCS’s market share becomes limited, so constant price wars exist. IT companies like Wipro, Infosys, Accenture, Deloitte, and Capgemini are all a part of the same industry. Thus, TCS must continuously develop new and better solutions for its clients to overcome the competition.
High turnover rate: The IT company undergoes significant attrition, which harms its overall reputation. This ultimately increases the expenditure to upgrade its new employees’ skill set and inculcate leadership qualities.
What are TCS's weaknesses?
Some weaknesses of TCS are its Legal challenges, the decline in performance, Not being agile, etc.
What are the strengths of TCS?
Some strengths of TCS include Vast clientele, Employee quality, Outstretched worldwide, Well-planned partnerships, Return on Investment, and Diverse service portfolio.
What are the 4 areas of SWOT analysis?
The four areas of SWOT analysis are Strengths, Weaknesses, Opportunities, and Threats.
For 50 years, Tata Consultancy Services has partnered with the world’s largest and most well-known businesses. The company believes that innovation and collective knowledge can help people transform their future into a better world. Today, it is an industry leader backed by its branding tactics, extensive reach, and portfolio. The SWOT analysis of TCS has made several facts visible about the company.
In conclusion, TCS concentrated majorly in the North American market and must consider diversifying its clientele to increase revenue. The company can continue growing at such a pace if it focuses on its strengths and opportunities and corrects its weaknesses to eliminate threats.