SWOT ANALYSIS OF WIPRO LTD.

Chapter-1

INTRODUCTION

1.1. Introduction:

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats.

As a company plans its next move, it should consider all of these things before

proceeding. The plan's strengths and weaknesses are factors within the company's

control. The company can then work to make the most of its strengths and eliminate the

weaknesses. Opportunities and threats, on the other hand, are external factors within the

community that could affect the project's success. The company does not have much

control over these situations. Performing a SWOT analysis of a particular idea means that

you are thoroughly thinking through every aspect of the project before getting started.

This allows you to estimate the project's success before investing a lot of time and capital.

It can also give you confidence that you are on the right track. It involves specifying the

objective of the business venture or project and identifying the internal and external

factors that are favorable and unfavorable to achieve that objective. The technique is

credited to Albert Humphrey, who led a convention at Stanford University in the 1960s

and 1970s using data from Fortune 500 companies.

1.2. Objective of the study:
 To analysis of external and internal factors.

 To discuss key items for the management of the organization, which involves

establishing priorities for action.

 To prepare strategic options: risks and problems to solve.

 To analysis and diagnosis of the company’s strengthening positive points,

indicating which points should be improved, chances of growth, increasing

opportunities, etc.

1.3. Scope of the study:

SWOT is a strategic planning tool used to evaluate the strengths, weaknesses,

opportunities, and threats to a project. It involves specifying the objective of the project

and identifying the internal and external factors that are favorable and unfavorable to

achieving that objective. The strengths and weaknesses usually arise from within an

organization, and the opportunities and threats from external sources.

1.4. Research and methodology:

In this study the method followed is descriptive and the data are taken from secondary

sources.

 The data collected for this project has been taken from the secondary source such

as internet, publications, books and articles provided by the various websites.

 Detail analysis of data are made by plotting different graph and charts.

 Parameters like net sales and profit of the organization are considered.

 The final ranks are evaluated based on the revenues.

1.5. Limitations of the study:

 This study is limited to Wipro ltd.

 In this study the data is limited.

 Difficulty in data interpretation.

 The study is mostly based on theory.

Chapter-2

REVIEW OF LITERATURE

2.1. Review of literature:

 Wipro Council for Industry Research (2010), A group of authors from Wipro council

found in their research about the security in the information age: the rise of “cyber-

attacks" the threat of a new age of cyber threats, can be determined by the SWOT

analysis and can prevent also.

 Mikolaj Pindelski (2015) in his study on Competitive Strategy found SWOT analysis

is the major tool for strategy of business planning and forecast.

 A. D. Chandler and CHERMACK, T. J. & KASSHANNA, B. K. (2007) Strategy and

Structure in their study on Human Resource Development 383-399 Strategy and

Structure: Chapters in the History of American Industrial Enterprise, found that –

“The use and misuse of SWOT Analysis and implications for HRD professionals".

 Marilyn M. Helms and Judy Nixon (2010) they made a study on exploring SWOT

analysis “Where are we now?” in their study on strategic management tool as

SWOT can be used to analyse the internal and external factors of a corporation.
 O. E. Williamson (197 ,in his study on SWOT analysis in the book “Market and

hierarchies” conclude that it is the analysis of 2 factors of business which improve

performance and predict the future .

 Tanya Sammut-Bonnici and David Galea (2015) found in their study of swot

analysis A SWOT analysis evaluates the internal strengths and weaknesses, and

the external opportunities and threats in an organization's environment. The

internal analysis identifies resources, capabilities, core competencies and

competitive advantages, using a functional approach to review finance,

management, infrastructure, procurement, production, distribution, marketing,

reputational factors and innovation.

 Govardhan S. (2010) The author, discusses various issues like challenges of

changing nature of cyber security threats. In today's environment cyber criminal's

motive is profit-driven. The new age cyber criminals are extremely capable of

thinking out-of-the-box and exploiting different attack tactics to achieve their

demented goals (ex. Operation Aurora). 1. Personal firewall, 2. Intrusion

Preventions 3. Network Access Control. and 4. Well managed and healthy IT

systems. Secure perimeter network, stringent employee background verification

and enhanced security education.

 Saghaei (2012) has been used SWOT analysis and QSPM models in their study

the SWOT identification process was regarding technological innovation, feasibility

study regarding application of current and potential production of company by

customers, and the ability of company in production. Based on the acquired data,
 EFE and IFE matrixes were calculated and the results were analyzed on diagrams.

These results were also confirmed by QSPM matrix.

 Lee (2011) made a study on SWOT analysis to assess the comprehensive

strategic of the overall Industry by analyzing its key areas. This research aims to

give some suggestions to Wipro BPO business to achieve the success.

 Z. Avdeeva, S. kovriga and D. Makarenko(2016), made a study on Development

Control Problem with Use of SWOT-analysis on the Cognitive Model of a Situation

external environment using the SWOT-analysis on the cognitive model of the

situation and the general scheme for their solution. The scheme of strategic

monitoring of the system development with inclusion of these problems is

presented. The example of development problem solution for the enterprise with

environmentally dangerous production is given.

 Chapter-3

COMPANY PROFILE

3.1. Company profile:

HISTORY:

The company was incorporated on 29 December 1945 in Amalner, Maharashtra by

Mohamed Premji as "Western India Vegetable Products Limited", later abbreviated to

"Wipro". It was initially set up as a manufacturer of vegetable and refined oils in Amalner,

Maharashtra, India under the trade names of Kisan, Sunflower, and Camel.

In 1966, after Mohamed Premji's death, his son Azim Premji returned home from Stanford
University and took over Wipro as its chairman at the age of 21.
1986–1992
In 1988, Wipro diversified its product line into heavy-duty industrial cylinders and mobile

hydraulic cylinders. Later, in 1991, tipping systems and Eaton hydraulic products were

launched. The Wipro Fluid Power division, in 1992, developed expertise to offer standard

hydraulic cylinders for construction equipment and truck tipping systems

1994–2000
Wipro Infotech and Wipro Systems were amalgamated with Wipro in April 1995 that year.

Five of Wipro's manufacturing and development facilities secured the ISO 9001

certification during 1994–95. In 1999, Wipro acquired Wipro Acer.[12] Wipro became a

more profitable, diversified corporation with new products such as the Wipro Super

Genius personal computers (PCs).

2001–2010
In February 2002, Wipro became the first software technology and services company in

India to be ISO 14001 certified. It set up a wholly owned subsidiary company (Wipro

Consumer Care Limited) to manufacture consumer care and lighting products.

2011-2018

In 2012 Wipro Ltd. demerged its consumer care, lighting, furniture, infrastructure

engineering (hydraulics and water and medical diagnostic business) into a separate

company to be named 'Wipro Enterprises Ltd'.

Logo Since 2017

Type Public
Industry IT service, IT consulting
Founded 29 December 1945
Founder Mohammed Hashim Premji
Headquarters Bengaluru, India
Area served worldwide

Key people Azim Premji (chairman),

Abidali Neemuchwala (CEO)

Service Digital strategy, Business Consulting

and IT Service

Website www.wipro.com
Different departments and divisions of Wipro limited: -

Wipro Ltd is the parent company which have multiple branches under it. Few are -

Wipro Enterprise

Wipro Technologies

Wipro InfoTech

Wipro Lighting

Wipro Digital

... And few more dealing with various streams like hydraulics, Eco energy etc.

Section II

Basically, the classification in Wipro (Technologies) is: Horizontal and Vertical.

Verticals are the industry domains, whereas Horizontals are the technical domains.

I've been a part of Insurance Vertical. Similarly, there are other verticals like 'Health

Care', 'Manufacturing', 'Banking', 'Energy and Utilities', 'Government', 'Aerospace' etc.

On a Horizontal part, there will be 'Java Practice', 'Microsoft Practice', 'SAP', 'Oracle',

etc.
 Chapter-4

ANALYSIS AND INTERPRETATIONS

SWOT analysis is a strategic planning tool that can be used by Wipro Limited managers

to do a situational analysis of the company. It is a useful technique to analyze the present

Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Wipro Limited is facing in

its current business environment.

The Wipro Limited is one of the leading firms in its industry. Wipro Limited maintains its

dominant position in market by critically analyzing and reviewing the SWOT

analysis. SWOT analysis a highly interactive process and requires effective coordination

among various departments within the company such as – marketing, finance, operations,

management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic

factors such as -strengths and weaknesses, & external strategic factors such as -

opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps

the managers of the Wipro Limited to develop four types of strategies:

 SO (strengths-opportunities) Strategies

 WO (weaknesses-opportunities) Strategies

 ST (strengths-threats) Strategies

 WT (weaknesses-threats) Strategies
 Strategic Analysis

INTERNAL
EXTERNAL

OPPORTUNITIES
STRENGTHS WEAKNESSES
Exploit,expand THREATS
Build,enhance Resolve,reduce
Avoid,thwart

Strengths of Wipro Limited – Internal Strategic Factors

As one of the leading firms in its industry, Wipro Limited has numerous strengths that help

it to thrive in the market place. These strengths not only help it to protect the market share

in existing markets but also help in penetrating new markets. Based on Fern Fort

University extensive research – some of the strengths of Wipro Limited are –

 Successful track record of developing new products – product innovation.

 Highly skilled workforce through successful training and learning programs. Wipro

Limited is investing huge resources in training and development of its employees

resulting in a workforce that is not only highly skilled but also motivated to achieve

more.
 Strong Brand Portfolio – Over the years Wipro Limited has invested in building a

strong brand portfolio. The SWOT analysis of Wipro Limited just underlines this

fact. This brand portfolio can be extremely useful if the organization wants to

expand into new product categories.

 Superb Performance in New Markets – Wipro Limited has built expertise at

entering new markets and making success of them. The expansion has helped the

organization to build new revenue stream and diversify the economic cycle risk in

the markets it operates in.

 Strong dealer community – It has built a culture among distributor & dealers where

the dealers not only promote company’s products but also invest in training the

sales team to explain to the customer how he/she can extract the maximum

benefits out of the products.

 Automation of activities brought consistency of quality to Wipro Limited products

and has enabled the company to scale up and scale down based on the demand

conditions in the market.

 Reliable suppliers – It has a strong base of reliable supplier of raw material thus

enabling the company to overcome any supply chain bottlenecks.

 Successful track record of integrating complimentary firms through mergers &

acquisition. It has successfully integrated number of technology companies in the

past few years to streamline its operations and to build a reliable supply chain.
Weakness of Wipro Limited – Internal Strategic Factors

Weakness are the areas where Wipro Limited can improve upon. Strategy is about

making choices and weakness are the areas where an organization can improve using

SWOT analysis and build on its competitive advantage and strategic positioning.

 There are gaps in the product range sold by the company. This lack of choice can

give a new competitor a foothold in the market.

 The marketing of the products left a lot to be desired. Even though the product is

a success in terms of sale but its positioning and unique selling proposition is not

clearly defined which can lead to the attacks in this segment from the competitors.

 Days inventory is high compare to the competitors – making the company raise

more capital to invest in the channel. This can impact the long-term growth of Wipro

Limited

 Investment in Research and Development is below the fastest growing players in

the industry. Even though Wipro Limited is spending above the industry average

on Research and Development, it has not been able to compete with the leading

players in the industry in terms of innovation. It has come across as a mature firm

looking forward to bring out products based on tested features in the market.

 Need more investment in new technologies. Given the scale of expansion and

different geographies the company is planning to expand into, Wipro Limited needs

to put more money in technology to integrate the processes across the board.

Right now, the investment in technologies is not at par with the vision of the

company.
 The profitability ratio and Net Contribution % of Wipro Limited are below the

industry average.

 The company has not been able to tackle the challenges present by the new

entrants in the segment and has lost small market share in the niche categories.

Wipro Limited has to build internal feedback mechanism directly from sales team

on ground to counter these challenges.

Opportunities for Wipro Limited – External Strategic Factors

 The new taxation policy can significantly impact the way of doing business and can

open new opportunity for established players such as Wipro Limited to increase its

profitability.

 Organization’s core competencies can be a success in similar other product field.

A comparative example could be - GE healthcare research helped it in developing

better Oil drilling machines.

 The new technology provides an opportunity to Wipro Limited to practices

differentiated pricing strategy in the new market. It will enable the firm to maintain

its loyal customers with great service and lure new customers through other value-

oriented propositions.

 Opening up of new markets because of government agreement – the adoption of

new technology standard and government free trade agreement has provided

Wipro Limited an opportunity to enter a new emerging market.

  Stable free cash flow provides opportunities to invest in adjacent product

segments. With more cash in bank the company can invest in new technologies

as well as in new products segments. This should open a window of opportunity

for Wipro Limited in other product categories.

 New environmental policies – The new opportunities will create a level playing field

for all the players in the industry. It represents great opportunity for Wipro Limited

to drive home its advantage in new technology and gain market share in the new

product category.

 Government green drive also opens an opportunity for procurement of Wipro

Limited products by the state as well as federal government contractors.

 Decreasing cost of transportation because of lower shipping prices can also bring

down the cost of Wipro Limited’s products thus providing an opportunity to the

company - either to boost its profitability or pass on the benefits to the customers

to gain market share.

Threats Wipro Limited Facing - External Strategic Factors

 The demand of the highly profitable products is seasonal in nature and any

unlikely event during the peak season may impact the profitability of the company

in short to medium term.

 Intense competition – Stable profitability has increased the number of players in

the industry over last two years which has put downward pressure on not only

profitability but also on overall sales.

  No regular supply of innovative products – Over the years the company has

developed numerous products but those are often response to the development

by other players. Secondly the supply of new products is not regular thus leading

to high and low swings in the sales number over period of time.

 Rising raw material can pose a threat to the Wipro Limited profitability.

 Increasing trend toward isolationism in the American economy can lead to similar

reaction from other government thus negatively impacting the international sales.

 Shortage of skilled workforce in certain global market represents a threat to

steady growth of profits for Wipro Limited in those markets.

 Imitation of the counterfeit and low-quality product is also a threat to Wipro

Limited’s product especially in the emerging markets and low-income markets.

 Liability laws in different countries are different and Wipro Limited may be

exposed to various liability claims given change in policies in those markets.

The company’s internal environment is the grouping together of human, financial, and

physical, etc. elements, in which you can exercise greater control, such as the results of

strategies set by management. In this environment it is possible to identify the strengths,

corresponding to the features and capabilities that together become a competitive

advantage for a company, and the weaknesses are the weaknesses that a company has

in comparison to its current or potential competitors. But the external environment

consists of factors that exist outside the organizational boundaries, and that can somehow

influence it. It is an environment with which there is no control but should be monitored

continuously as it is the basis for strategic planning.

The analysis of the external environment is commonly divided into macro environmental

factors (political, demographic, technological, economic, etc.) and microenvironmental

factors (suppliers, partners, customers, etc.). These must constantly be monitored before

and after the definition of company strategies.

Thus, through this monitoring, it will be possible to identify promptly the opportunities and

threats that arise.

Finally, one last thought. If we consider that external factors influence all companies

operating in the same market homogeneously, we can say that only those who can best

identify the changes and have the ability to adapt are the ones that can take better

advantage of the opportunities and suffer only slightly from realized threats.

Growth of IT services business

IT Services Revenue ($ million)

(
$7,705
$6,618 $7,082 $7,346
$5,921 $6,218
$5,221
$4,323 $4,390
$3,647
$2,611

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Interpretation:
in the above trend analysis, the growth of IT service business of Wipro limited has

increased from 2006 to 2017. The revenues are expressed $ Million. IT Services

Business has grown at a CAGR of above 10% in the last 10 years

Growth market size

Source: NASSCOM The IT - BPO Sector in India – Strategic Review 2017

Interpretation:

Long Term Fundamentals of the India Off-shoring story remain intact.

Off-shoring market is expected to grow at a 15% CAGR for the next eight years
Revenues from Digital technologies are expected to represent 23% and 38% share by
2020 and 2025
Shares in software market

8% Tata Consultancy Service

10%

39% Wipro

13%
INFOSYS

HCL Technologies
30%

Other

This data is based on software and other IT application sales of respective

companies. The survey was conducted by Rediff.com and Economic times

in December 2011.

Interpretation:

Above chart shows the 2011’s top software and other IT sales companies in India. 1st

Tata Consultancy Service with 39% market share and 2nd Wipro 30% market share and

3rd Infosys with 13% as of 2011.

The last five years data of WIPRO LIMITED

Financial performance 2013- 2014- 2015- 2016- 2017-

(Figures in ₹ Million except 14 15 16 17 18
otherwise stated)

Revenue@ 437,628 473,182 516,307 554,179 546,359

Profit before Depreciation,

100,460 108,246 111,825 116,986 105,418
Amortization, Interest and Tax

Depreciation and Amortization 11,106 12,823 14,965 23,107 21,124

Profit before Interest and Tax * 89,354 95,423 96,860 93,879 84,294

Profit before Tax * 101,005 111,683 114,933 110,356 102,474

Tax 22,600 24,624 25,366 25,213 22,390

Profit after Tax - attributable to

77,967 86,528 89,075 84,895 80,081
equity holders*

Share Capital 4,932 4,937 4,941 4,861 9,048

Net Worth 344,886 409,628 467,384 522,695 485,346

Gross cash (A) 187,258 251,048 303,293 344,740 294,019

Total Debt (B) 51,592 78,913 125,221 142,412 138,259

Net Cash (A-B) 135,666 172,135 178,072 202,328 155,760

Property, Plant and Equipment (C) 51,449 54,206 64,952 69,794 64,443

Intangible Assets (D) 1,936 7,931 15,841 15,922 18,113

Property, Plant and Equipment and

53,385 62,137 80,793 85,716 82,556
Intangible Assets (C+D)

Goodwill 63,422 68,078 101,991 125,796 117,584

Net Current Assets 218,534 272,463 284,264 309,355 292,649

Capital Employed 396,478 488,538 592,605 665,107 623,605

Source: Data taken from the official website of Wipro ltd.

Note: All figures above are based on IFRS Consolidated Financial Statements.

Interpretation:

Revenue annual growth rate of Wipro ltd.

Revenue 7.8%
Net income 5.4%
EPS Basic 6.1%
Revenue is aggregate revenue for the purpose of segment reporting
including the impact of exchange rate fluctuations.
EPS adjusted for the years prior to the bonus issue (Bonus issue in the
proportion of 1:1 was approved by the shareholders in June 2017).
 Chapter-5
FINDINGS, SUGGESTION AND CONCLUSION

Findings:
 The SWOT analysis shows the company’s current situation as well as what can be

done in near.

 Mostly Wipro limited active in many fields but not so perfection in some of fields

and serve wide areas like globally.

 suffers from the trust issue many European countries do not trust Indian software

but it doesn’t affect the overall performance of Wipro limited.

 Till today Wipro has been known for being very process oriented with a focus on

quality and cost savings.

 Wipro long term strategy should be to create a brand image and be known for

innovation.

 Cost remains the biggest hurdle to fostering innovation. It will be always barriers

for R & D

Suggestions:
 Wipro should invest in R&D and Market research.

 Adopt the Dynamic High Technology Strategy and Speed-to-market is necessary

for successful innovation, so that It is able to innovate new solutions for clients to

cut costs or reduce time to market or improve reliability.

 Clear business case for using “green” practices. Green business practices as part

of their corporate innovation strategies.

 take advantage of the market opportunities through its strengths,

  stay strong against the market threats through its strengths

 suffer from the market threats because of its weaknesses

 miss market opportunities because of its weaknesses

Conclusion:
Finally, it maybe concluded that till today Wipro Ltd. has been known for being very

process oriented with a focus on quality and cost savings. Wipro long term strategy should

be to create a brand image and be known for innovation. Wipro should invest in R&D and

Market research, so that it is able to innovate new solutions for clients to cut costs or

reduce time to market or improve reliability. In this study the SWOT analysis disclose the

all the internal factors like Strength and Weakness which can be improved through their

strength and minimize the weakness. And external factors such as Opportunities and

Threats to avoid threats and make profitability through the various market opportunities.
 REFERENCES

BOOKS: -
 M. E. Porter, Competitive Strategy (New York: Free Press, 1980)

 A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)

 O. E. Williamson, Markets and Hierarchies (New York: Free Press, 1975);

 L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business

School, 1970)

 R. E. White, Generic Business Strategies, Organizational Context and

Performance: An Empirical Investigation, Strategic Management Journal7 (1986)

Articles: -
 Mikolaj Pindelski (2015), Warsaw School of Economics 978-83-65416-51-3

 Marilyn M. Helms and Judy Nixon (2010) Journal of Strategy and Management

 Tanya Sammut-Bonnici and David Galea Wiley (JAN 2015), “Encyclopedia of

Management”, Publisher: John Wiley & Sons, Ltd.

 COJANU, V. & BILBOR, M. R. (2007). "The SWOT Technique in Action:

Strategic Analysis of Development in Romania", Review of Management and
Economical Engineering, 6 (5), pp. 162-167

Websites: -
www.wipro.com
www.scribd.com
www.fernfortuniversity.com