Porter Five Forces Analysis Essay

The entrenched position of the Indian foodstuff leaders in IT manufacturing like TCS, Infosys, Wipro, CTS, Tech Mahindra The changing environment demands fresh thinking to accumulate the cutting edge advant hop on. This paper attempts to look at the various large instruction and micro environmental factors operating in the industry using. The model of strategic analysis by Michael door guard, i. e. to analyse the bargaining power of buyers and suppliers, the threat of bracing entrants, threat of substitutes, intensity of contest, impact of technological changes, appendage and volatility of the market and the influence of government and regulatory interventions.These variables affecting the industry have been reason as favourable or adverse depending on the influence on the profitability of the industry. Some strategic initiatives, which tin be adopted, to leverage the aureate forces and prevent the adverse ones have been identified. This paper attempts to analyse the vari ous macro and micro environmental factors operating in the industry to provide a basis for devising strategy. IT INDUSTRY OVERVIEW INTRODUCTION India IT industry is one of the worldly concerns successful information technology industries.Measured by the age of many industries, the IT industry in India is still in its infancy. Yet its growth and knowledge has caught the attention of the world so much so that India is straightaway being identified as the major powerhouse for incremental development of computer software. The reason for this attention is not the actual sizing of the industry nevertheless its speedy growth rate over the nineties and sequent decade. It has large(p) from US $ 150million (source NASSCOM) in 1991-92 to US $ 64 billion in stratum 2008. The industrys contribution to Indias GDP has grown significantly from 1. % in 1999-2000 to around 5% in FY06, and has been estimated to cross 5. 5% in FY2010. The sector has been growing at an annual rate of 28% per annu m since FY01. The Indian IT industry can be mainly categorised into pursuit sectors IT services, IT enabled services and BPO, Research & Development, Software Product and Hardware. IT INDUSTRY PERFORMANCE The size of the Indian IT industry, according to NASSCOM, is US$ 64 billion as of year 2008. It has been growing with an annual rate of 28% since 2001. The Indian IT industry can be broadly divided into two markets domestic market and exports market.The elements of for each one of the above forces and the extent and /or effect of each element in the context of the IT industry have been analysed and enumerated below. Porters framework, however, does not dish out three important variables variables-Government and Regulatory Interventions, Technological Changes, and Growth and Volatility of commercialise Demand. These variables have been included in the model proposed by George Day (Day, 1990), which evolved from Porters model and have been analysed in this study study. Aparna Par thasarathy PGXPM 05-Term5 knave 5 Strategic Management Industry Analysis Assignment 2009Degree of rivalry denotes the intensity of competition within the industry. As the industry is still in its growth stage, there is enough room for expansion for existing players and impudent entrants. With the entry of many multinational companies (MNC) are opening their operations in India to leverage the low cost advantage provided by India, has increased the shutting ratio (CR) of the industry. Also as there is no huge uppercase investment required to start a new company, the industry come across a very large numbers of small and medium-size companies operating in a niche market.Presence of such large number of players has do the industry as one of the most competitive industry in the market. High Commoditized Offerings low-cost, little differentiation high industry growth solid Competitors Few number of large companies Numerous or equally equilibrate competitors Lack of differentiat ion or switching costs Capacity increase in large increments High strategic stakes EXHIBIT Aparna Parthasarathy PGXPM 05-Term5 Page 6 Strategic Management Industry Analysis Assignment 2009 We tell apart the top 3 IT companies from above pie chart for the analysis.Predicting what pull up stakes come in an industry that evolves on an almost daily basis is a unappreciated and almost futile task.Things change at such a rapid rate, and many of the technologies are so fluid, that a shift in committee can occur in weeks rather than months. If we think that todays Internet and e-commerce opportunities are technically advanced, we have not seen anything yet. Not plainly will the existing uses of the Internet get more and more advanced, but new ways will be found to exploit the opportunities it provides. The pitching of these services will not just be dependant on new formats and programming, but also on the mediums that deliver them. For this to happen, certain changes will need to t ake place, not just technological, but legal as well. Protection of consumers needs to be examined, as well as