IT and ITES

Porter’s 5 Factor Model

Group 6

Meti Pradeep

Sumit Kumar Chakraborty

Shirish Sharma

Madhu Saxena

Shiva Kumar Ramesh

Introduction

Application

• Understanding an industry.

• Competition analysis of Industry.

• Analyzing power of Supplier & Buyer.

• Analyzing threat from new entrants.

• Helping decision making.

Industry Rivalry

• Commoditized offerings (Easy to obtain)

• Low cost, little differentiation.

• High Industry growth.

• Strong competitors.

• Small number of large companies.

Bargaining power of Suppliers

• Availability of vast talent pool (Fresher

and experienced).

• Industrial slowdown and bad IT image.

• Demand and supply of IT professionals.

Bargaining power of Suppliers

• Software license providers: High

• Hardware & PC providers: Low

• Labor (Experienced) : High

• Labor (Fresher) : Low

• Outsourced Sub contractors: Low

• Threat of new entrants is High or Low? Answer

please!!

• Threat of new entrant is high, Why ?

• The industry is not capital intensive.

• Conducive environment provided by Govt.

such as SEZ.

• High growth rate attracts new players

• Large talent pool available.

• 1.2 Million engineering graduates in 2014.

• Out of which at least 100000 will be in IT

industry.

• Entrepreneurship boom.

• Bargaining power of buyers is HIGH! Why?

• Who are the buyers ?

• DBS, UBS, MEGGITT, GSK,

ASTRAZENECA etc.. Companies from US

and Europe.

• What are there power?

Lot of options available like:

TCS, INFOSYS, WIPRO who would cost lesser

price per hour.

The companies high dependency on a particular

sector, like BFSI.

Slowdown in clients economy.

Achilles heel?

Large number of assigned engineers should be

moved to bench.

• Threat of Substitutes

• Cheaper offshore locations, such as

Philippines, China etc.

• The company outsourcing can start its own IT

solution unit.

• Ex. TCS, L&T

Thank you