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    Business Models: Individual Assignment

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    Shubham Pal
    TCS uses a differentiation strategy by providing both low-cost, standardized services as well as high-end, customized consulting services. It focuses on developing niche skills and technologies to take on complex projects and drive growth. TCS creates value for customers by developing deep domain expertise, offering consulting and solutions, and continuously expanding its service offerings. For its own growth, TCS invests heavily in upskilling employees and developing intellectual capital from research partnerships. It has a strong financial position with consistent revenue growth, high profitability, and returns for shareholders that have increased its market share and relationship capital over time.

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    Business Models: Individual Assignment

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    Shubham Pal
    18 views3 pages
    TCS uses a differentiation strategy by providing both low-cost, standardized services as well as high-end, customized consulting services. It focuses on developing niche skills and technologies to take on complex projects and drive growth. TCS creates value for customers by developing deep domain expertise, offering consulting and solutions, and continuously expanding its service offerings. For its own growth, TCS invests heavily in upskilling employees and developing intellectual capital from research partnerships. It has a strong financial position with consistent revenue growth, high profitability, and returns for shareholders that have increased its market share and relationship capital over time.

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    TCS uses a differentiation strategy by providing both low-cost, standardized services as well as high-end, customized consulting services. It focuses on developing niche skills and technologies to take on complex projects and drive growth. TCS creates value for customers by developing deep domain expertise, offering consulting and solutions, and continuously expanding its service offerings. For its own growth, TCS invests heavily in upskilling employees and developing intellectual capital from research partnerships. It has a strong financial position with consistent revenue growth, high profitability, and returns for shareholders that have increased its market share and relationship capital over time.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views3 pages

    Business Models: Individual Assignment

    Uploaded by

    Shubham Pal
    TCS uses a differentiation strategy by providing both low-cost, standardized services as well as high-end, customized consulting services. It focuses on developing niche skills and technologies to take on complex projects and drive growth. TCS creates value for customers by developing deep domain expertise, offering consulting and solutions, and continuously expanding its service offerings. For its own growth, TCS invests heavily in upskilling employees and developing intellectual capital from research partnerships. It has a strong financial position with consistent revenue growth, high profitability, and returns for shareholders that have increased its market share and relationship capital over time.

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    of 3

    Business Models

    Individual Assignment
    On
    Differentiation Strategy and Value Creation of TATA Consultancy Services Ltd.

    Submitted to:
    Prof. Prashant Salwan

    Report By:

    SHUBHAM PAL – 2021EPGP048

    0|Page
    SHUBHAM PAL | 2021EPGP048 Business Models-Task 1

    TATA CONSULTANCY SERVICES LTD.


    Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers
    software solutions and services to global business, ensuring a level of certainty no other can match. TCS is a
    consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering and assurance services.
    This is delivered through its unique Global Network Delivery Model, recognized as the benchmark of
    excellence in software development. TCS has partnered with the world’s largest businesses in their
    transformational journeys for the past five decades. It has a worldwide presence, deep domain expertise in
    multiple industry verticals, and a comprehensive portfolio of offerings aimed at every C-suite stakeholder,
    including service integration and consulting, digital transformation services, cognitive business operations,
    cloud services, and products and platforms.
    Differentiation Strategy: TCS uses differentiation strategy by providing low end services in terms of cost,
    resources. TCS also differentiate its high-end services such as consulting in term of niche offerings, knowledge
    management system and resources. This differentiation strategy is the strength of TCS by which they are
    successful in reaching the overall cost leadership in the IT industry across the globe. TCS has developed a
    resolute strategy where they are providing IT services according to the requirements of customer and the
    nature of business and targeting new markets like Middle East, Europe, and Asia-pacific in new growth
    offerings. Currently, TCS Focus on Centres of Excellence (CoE) to hold ability so as to construct technologies
    such as service-oriented architecture, Artificial Intelligence, Digital Transformation, automation testing using
    context based neural networks, and virtualization which will help TCS to attempt outsized projects so as to
    alter customer's IT applications.

    Value Creation Model for Customers: The company's customer-centric, industry-aligned organisational
    structure has resulted in substantial domain depth for every business unit, as well as enormous customer-
    specific contextual expertise for the account teams inside those units. Domain expertise, domain consulting,
    contextual knowledge, project management experience, and technical competence gained on the job constitute
    the transformation of human capital into intellectual capital. TCS invests some of its intellectual resources in
    research and innovation (R&I), which looks at how newer technology might be creatively applied to solve
    business problems in a range of industries. TCS collaborates with well-known technology companies, start-

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    ups, and academic researchers to tap into their intellectual capital and create solutions that complement their
    own. Some of R&I's breakthrough software solutions that are deemed to have a significant market potential
    are productized, adding to TCS' extensive product and platform portfolio. These increase the organization's
    intellectual capital, generate new revenue sources, and improve the organization's brand posture (relationship
    capital).

    TCS' strategy, organisational structure, and investment decisions are all centred on the customer. TCS'
    customer-centric perspective enables the company to identify trends early, capitalise on economic
    opportunities by making the proper investments, and mitigate risks while meeting its ethical and
    environmental obligations. TCS is constantly seeking for new areas in their value chain where it can offer
    value, proactively investing in establishing fresh skills, reskilling its employees, and releasing newer services,
    solutions, products, and platforms in order to widen and deepen client relationships. TCS is now profiting
    from the departmental budgets of various stakeholders within the clients' companies, including business heads,
    CMOs, CROs, COOs, CFOs, and even CEOs, in addition to IT expenditures. As indicated by the client KPIs
    published every quarter and year, this has not only integrated TCS deeper into their operations, but has also
    resulted in higher quality revenues, stronger revenue growth, and more share of wallet. Products and platforms,
    in combination with business model changes, constitute new, high-quality income streams that are rapidly
    expanding. This strategy has yielded deep and long-lasting client relationships, as well as a continual
    expansion of the addressable market.

    Value Creation Model for the Firm: Human capital, which represents talent and innovation, is at the heart
    of TCS' value generating engine. TCS hugely invests in upskilling individuals with the latest technology in
    the market and provides them with career paths that matches their aspirations by acquiring the best available
    talent in each market it serves, providing a supportive and vibrant workplace in which to engage that talent.
    Over the previous five decades, TCS has successfully navigated through many technological cycles, pivoting
    and adapting each time to establish relevant new capabilities by reskilling the workforce at scale and aiding
    clients in the process realising the benefits of emerging technologies, thanks to a strong belief in organic talent
    development and investing in people. Even the largest supplier has a mid-single digit market share, indicating
    that the global market for IT services is highly fragmented. TCS is one of the major IT services companies in
    the world, with a market share of 1.6 percent. Over the previous decade, TCS has outpaced the market,
    increasing at twice the rate of the market.

    On a consolidated basis, the revenue for FY 2021 was Rs.164,177 crore, higher by 4.6 percent over the
    previous year’s revenue of Rs.156,949 crore. The profit after tax (PAT) attributable to shareholders and non-
    controlling interests for FY 2021 Rs.33,520 crore and Rs.32,447 crore, respectively. The profit after tax (PAT)
    attributable to shareholders for FY 202 was Rs.33,388 crore. TCS grew at the rate of 4.4 times over the last
    decade. The operating margin of TCS is at 25.9% which is industry leading. TCS has also invested in funds
    with a value of Rs. 50,430 crores which can be harnessed during distress. TCS has a 116.2% operating cash
    flow to Net Income ratio. TCS also has a 101.5% shareholder pay-out to net income ratio. TCS has a market
    capitalisation of $200 billion. TCS has the best-in-class profitability and a strong balance sheet provides
    greater ability to invest in newer capabilities and to weather economic downturns. Its consistent high
    dividends/stakeholders return enhances relationship capital.

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