SWOT ANALYSIS

HCL TECHNOLOGIES

1. STRENGTHS

A. Wide Range of Products and Services like Bpo’s, Software Services, Infrastructure Management which cater into both large and medium size companies.

B. Global Coverage in countries like U.S, Europe, Japan etcC. Strong employees base of upto 50000Pax.D. Support sales activities by understanding the customer business

better.E. Keep uptodate on what competition is doing.F. Its revenue has increased from 60.7bn in 2007 from 114bn

in2009 which shows its increasing trend.

2. WEAKNESS

A. One of the key weakness of HCL is that it has lost projects in continuation like recently BFSI cuts projects.

B. HCL has always a weakness in TIER1 sectors.C. Total asset turnover is one of the weakness of HCL as they has

always failed to materialize its assets in right direction.D. Lack of innovation and distribution network especially in case

of laptops has reflected HCL’s weakness.3. OPPORTUNITIES

A. Acquisitions:-HCL has already done 3 major acquisitions like Liberta. This enables them to expand and create opportunity for them to wide there spectrum.

B. Key opportunities lies in the countries like Eastern Europe and APAC(Asia-Pacific Region).

C. Mid Market segment is the opportunity area as against fortune200 companies.

D. Opportunity of doing better on return on equity from 21.42% by beating satyam(26.08%)

E. Increasing its market share from 9.8% vs 19.7%(HP)

4. THREATs

A. One of key threat for HCL and the industry as a whole is the ban of outsourcing from India due to new regulations from U.S

B. Dip in quarterly Sales by 5% can lead to loss of market share and product depreciation.

C. Small Players and manufactures are trying to enter into the segment where they can provide much cheaper products then HCL which will be a rising competition for HCl to stand.

PEST ANALYSIS

IT INDUSTRY

Political

A.Tax rates in India for the hardware sector is 20%-30% plus which creates obvious possibilities for the further reform and faster growth.

B.10Year Special Economic Zones programs and tariffs change to promote the hardware production.

C.26 new projects as a part of a national E-Government Plan.

D.Tax initiative by government to ask state government to fix VAT at 4% in the hope of attracting investors.

E. Manufacturing Associations of IT(MAIT) an Electronic Industry Association of India(ELSINA) are also pressing for reduction in land acquisitions rights by stamp duty exemptions.

Economic

A. In last 18months there is growth in sales in PCs and computer hardware, mainly due to lower prices.

B. But as per the trade cycle rotation there will be a possible slowdown in demand.

C. IT plays a important role in bringing 50%of rural household to the banking innovation.

D. IBM, Dell, Lenovo has announced new investment to expand capacity

E. Compound Annual Growth Rate is 15% between 2005-2010.

F. Due to the depreciation of the Rupee in comparison to Dollar the software and outsourcing has suffered negatively due poor exchange rate .

G.Industry contributes upto 7% in GDP.

SOCIALA.Only 1.3% of people in India own a computer.B.Age Distribution:- 45% of the population is under

25.C.Regional imbalance and low incomes.D.Inward Investment can lead to better job

opportunities.E.Still Abroad is the fascination among the IT

professionals to work.F. IBM, Wipro and Infosys recruit 15000-20000

graduates each year.G. Business practices varies region wise

TechnologicalA. Plans by AMD to set up the country’s 1st chip fabrication

(an investment upto US$3bn) to stimulate local production and lower prices.

B. Multimedia features and Entertainment to bring bollywood among the masses.

C. Lenovo to built in TV tuner cards capable of connecting to a TV antenna.

D. During the year Satyam entered into an agreement with US based G-LOG, to offer a supply chain management and supply chain execution solutions to its customer.

Submitted By:- Tanay Sinha