Industrial Analysis and portfolio management

TOPIC- Swot, pestle and porter’s 5 forces analysis

IT INDUSTRY:
1. INFOSYS
2. WIPRO

BANKING SECTOR:
1. SBI
2. ICICI BANK

Submitted to-

Prof. Dr Venugopal Rajamanuri

Submitted by-

Anil Biswal (PGD22012)

 Strong brand image and reputation in the IT industry in India and globally.

 Wide range of IT services, including consulting, digital transformation, and engineering services.

 Good financial performance with consistent revenue growth.

 Strong focus on innovation and research and development.

 Strong partnerships with other global technology companies.

Weaknesses:

 Dependence on a few large clients for a significant portion of revenue.

 Reliance on H-1B visas for talent acquisition, which can be affected by changes in US immigration policies.

 Limited geographic diversification, with most of the revenue coming from North America.

 High competition in the IT industry in India.

Opportunities:

 Growing demand for digital transformation and cloud services globally.

 Expansion into new geographic markets, especially in Europe and Asia.

 Acquisitions of smaller firms to enhance capabilities and expand service offerings.

 Focus on sustainability and environmentally friendly practices can improve brand image and attract
customers.

Threats:

 Increasing competition from other large IT firms in India and globally.

 Political and economic instability in key markets.

 Regulatory changes that can affect the company's operations and revenue.

 Rapid technological advancements leading to obsolescence of existing services.

 Strong presence in IT services, including consulting, infrastructure management, and business process
services.

 Diversified customer base across multiple industries.

 Strong partnerships with global technology companies.

 Good financial performance with consistent revenue growth.

 Strong focus on innovation and research and development.

Weaknesses:

 Dependence on a few large clients for a significant portion of revenue.

 Limited presence in emerging technologies such as artificial intelligence and blockchain.

 High competition in the IT industry in India.

 Limited geographic diversification, with most of the revenue coming from North America.

Opportunities:

 Growing demand for digital transformation and cloud services globally.

 Expansion into new geographic markets, especially in Europe and Asia.

 Acquisition of smaller firms to enhance capabilities and expand service offerings.

 Focus on sustainability and environmentally friendly practices can improve brand image and attract
customers.

Threats:

 Increasing competition from other large IT firms in India and globally.

 Political and economic instability in key markets.

 Rapid technological advancements leading to obsolescence of existing services.

 Regulatory changes that can affect the company's operations and revenue.
 PESTEL Analysis
1.Infosys:
Political:

 Infosys operates in multiple countries, so it's subject to different political systems and regulations.

 Changes in government policies or geopolitical tensions can impact the company's operations and
profitability.

Economic:

 Infosys' financial performance is closely tied to the global economy, as it provides IT services to clients across
different industries.

 Economic downturns can lead to reduced demand for IT services and affect Infosys' revenue and growth
prospects.

Social:

 The adoption of technology is increasing across different segments of society, creating new opportunities for
Infosys to offer its services.

 The company must also adapt to changing societal expectations around issues like diversity and inclusion.

Technological:

 Infosys is known for its expertise in emerging technologies like artificial intelligence, cloud computing, and
blockchain, which gives it a competitive edge.

 However, new technologies and innovations could disrupt the IT services industry and require Infosys to
constantly innovate to stay ahead.

Environmental:

 As a company that operates globally, Infosys must comply with different environmental regulations in
different regions.

 There's also growing pressure on businesses to reduce their environmental impact, which could affect
Infosys' operations and reputation.

Legal:

 Infosys must comply with various legal and regulatory frameworks in the countries where it operates.

 Any legal issues or controversies could negatively impact the company's reputation and profitability.
2.Wipro:
Political:

 Wipro operates in multiple countries, so it's subject to different political systems and regulations.

 Changes in government policies or geopolitical tensions can impact the company's operations and
profitability.

Economic:

 Wipro's financial performance is closely tied to the global economy, as it provides IT services to clients across
different industries.

 Economic downturns can lead to reduced demand for IT services and affect Wipro's revenue and growth
prospects.

Social:

 The adoption of technology is increasing across different segments of society, creating new opportunities for
Wipro to offer its services.

 The company must also adapt to changing societal expectations around issues like diversity and inclusion.

Technological:

 Wipro is known for its expertise in emerging technologies like artificial intelligence, cloud computing, and
cybersecurity, which gives it a competitive edge.

 However, new technologies and innovations could disrupt the IT services industry and require Wipro to
constantly innovate to stay ahead.

Environmental:

 As a company that operates globally, Wipro must comply with different environmental regulations in
different regions.

 There's also growing pressure on businesses to reduce their environmental impact, which could affect
Wipro's operations and reputation.

Legal:

 Wipro must comply with various legal and regulatory frameworks in the countries where it operates.

 Any legal issues or controversies could negatively impact the company's reputation and profitability.

Porter’s Five Forces Analysis

The IT services industry requires significant upfront capital investments in infrastructure, technology, and
human resources, which acts as a significant barrier to entry. Additionally, established companies like Infosys
have strong brand recognition and customer loyalty, making it difficult for new entrants to enter the market.

2. Bargaining Power of Suppliers: Low

The bargaining power of suppliers in the IT services industry is low, as there are numerous suppliers in the
market, and IT companies like Infosys have a wide range of options to choose from.

3. Bargaining Power of Customers: High

The IT services industry is highly competitive, and customers have a wide range of options to choose from.
Customers have significant bargaining power, and they can easily switch to other IT service providers if they
are not satisfied with the quality of services provided by Infosys.

4. Threat of Substitutes: High

The IT services industry is constantly evolving, and there are numerous substitutes available in the market.
Customers can easily switch to other IT services, such as cloud computing or software as a service (SaaS),
which could potentially reduce the demand for Infosys' services.

5. Competitive Rivalry: High

The IT services industry is highly competitive, with many players in the market. Infosys competes with other
established companies like TCS, Wipro, and Accenture, among others. The intense competition in the market
puts pressure on Infosys to innovate and differentiate itself from its competitors.
Porter's Five Forces Analysis of Wipro:
1. Threat of New Entrants: Low

The IT services industry requires significant capital investments in infrastructure, technology, and human
resources, making it difficult for new entrants to enter the market. Established companies like Wipro have
strong brand recognition and customer loyalty, making it challenging for new entrants to establish
themselves in the market.

2. Bargaining Power of Suppliers: Low

The bargaining power of suppliers in the IT services industry is low, as there are numerous suppliers in the
market, and IT companies like Wipro have a wide range of options to choose from.

3. Bargaining Power of Customers: High

The IT services industry is highly competitive, and customers have a wide range of options to choose from.
Customers have significant bargaining power, and they can easily switch to other IT service providers if they
are not satisfied with the quality of services provided by Wipro.

4. Threat of Substitutes: High

The IT services industry is constantly evolving, and there are numerous substitutes available in the market.
Customers can easily switch to other IT services, such as cloud computing or software as a service (SaaS),
which could potentially reduce the demand for Wipro's services.

5. Competitive Rivalry: High

The IT services industry is highly competitive, with many players in the market. Wipro competes with other
established companies like TCS, Infosys, and Accenture, among others. The intense competition in the
market puts pressure on Wipro to innovate and differentiate itself from its competitors.

BANKING SECTOR
SWOT ANALYSIS
SWOT analysis of State Bank of India (SBI):
Strengths:

1. Largest bank in India: SBI is the largest bank in India, with over 23,000 branches and 58,000 ATMs across the
country. This gives SBI a wide reach and a strong brand presence.

2. Diverse range of products and services: SBI offers a wide range of financial products and services, including
personal banking, corporate banking, wealth management, and insurance, which allows them to cater to a
diverse customer base.

3. Strong digital presence: SBI has a strong digital presence with its website and mobile application, which
makes it easier for customers to access and use its services.

4. Government backing: As a government-owned bank, SBI has the backing and support of the Indian
government, which adds to its credibility.

Weaknesses:

1. Limited global presence: SBI has limited global presence compared to some of its peers in the banking
industry, which limits its growth potential.

2. Legacy systems: SBI's legacy systems and processes can make it difficult for the bank to adapt to the
changing market trends and customer preferences.

3. High level of bureaucracy: Being a government-owned bank, SBI has a high level of bureaucracy, which can
sometimes lead to slow decision-making and hinder its ability to innovate.

Opportunities:

1. Increasing demand for digital banking: With the increasing adoption of digital banking, SBI has an
opportunity to expand its digital offerings and attract a larger customer base.

2. Growing middle class: As India's middle class continues to grow, SBI has an opportunity to offer more
sophisticated financial products and services to cater to their needs.

3. Expansion into new markets: SBI can look to expand its operations in new markets, both within India and
globally, to diversify its revenue streams and grow its customer base.

Threats:

1. Intense competition: The banking industry in India is highly competitive, with many players vying for market
share. This can make it difficult for SBI to maintain its market position.

2. Economic volatility: The Indian economy is subject to volatility and fluctuations, which can impact SBI's
financial performance.

3. Cybersecurity risks: With the increasing use of digital banking, SBI faces the risk of cyberattacks and data
breaches, which can harm its reputation and financial stability.

SWOT analysis of ICICI Bank:

1. Large customer base: ICICI Bank is one of the largest private sector banks in India, with a vast customer base
of over 100 million customers.

2. Strong brand name: ICICI Bank is a well-established brand with a strong reputation in the Indian banking
industry.

3. Diversified product portfolio: ICICI Bank offers a wide range of products and services, including retail
banking, corporate banking, investment banking, and insurance, which makes it a one-stop-shop for
customers.

4. Strong digital presence: ICICI Bank has a strong digital presence with a range of online and mobile banking
services, making it easier for customers to access their accounts and manage their finances.

5. International presence: ICICI Bank has a presence in several countries, including the UK, Canada, and the US,
which makes it a global player in the banking industry.

Weaknesses:

1. High dependency on the Indian market: ICICI Bank has a high dependency on the Indian market, which
makes it vulnerable to economic and political changes in the country.

2. Asset quality: ICICI Bank has faced challenges with asset quality in the past, which has impacted its
profitability.

3. Limited geographical presence: Although ICICI Bank has an international presence, it is limited to a few
countries, which restricts its growth potential in other regions.

Opportunities:

1. Growing Indian economy: The Indian economy is growing rapidly, and this presents an opportunity for ICICI
Bank to expand its customer base and increase its revenue.

2. Increasing demand for digital banking: With the increasing adoption of digital banking, ICICI Bank can
leverage its strong digital presence to attract more customers.

3. Expansion into new markets: ICICI Bank can expand into new markets, especially in emerging economies, to
increase its global presence and diversify its revenue streams.

Threats:

1. Intense competition: ICICI Bank faces intense competition from other private and public sector banks in
India, which can impact its market share and profitability.

2. Economic downturns: Economic downturns can impact the banking industry, and ICICI Bank may face
challenges in such situations.

3. Regulatory environment: The banking industry is heavily regulated, and changes in regulations can impact
the operations and profitability of ICICI Bank.

PESTEL ANALYSIS
SBI Bank:

Political:

 The banking industry in India is heavily regulated by the government, and any changes in laws and
regulations can affect SBI's operations.

 The government has also introduced various initiatives to promote financial inclusion, which SBI has to
comply with.

Economic:

 The Indian economy's performance directly impacts the banking industry, and any changes in GDP growth,
inflation, or interest rates can affect SBI's profitability.

 The Indian government's policies on foreign investment and trade can also impact SBI's operations.

Social:

 SBI has a large customer base, and it needs to consider the social factors that affect its customers' behaviour
and preferences, such as changes in lifestyle, demographics, and cultural norms.

 The bank needs to ensure that it is meeting the needs of its diverse customer base.

Technological:

 Technology has become an essential part of the banking industry, and SBI needs to continually invest in new
technologies to remain competitive and meet its customers' needs.

 The bank also needs to consider cybersecurity risks and ensure that its systems are secure and resilient.

Environmental:

 SBI needs to consider its impact on the environment and ensure that its operations are sustainable and do
not harm the environment.

Legal:

 SBI needs to comply with various laws and regulations related to banking, such as anti-money laundering
laws, data privacy laws, and consumer protection laws.

ICICI Bank:

Political:
  ICICI Bank operates in India and internationally and needs to consider political factors in each country where
it operates.

 The bank needs to comply with the regulations and laws of each country, which can be affected by changes
in political leadership and policies.

Economic:

 Changes in the Indian economy, such as GDP growth, inflation, and interest rates, can affect ICICI Bank's
profitability and operations.

 The bank also needs to consider the global economic environment and how it affects its international
operations.

Social:

 ICICI Bank needs to consider social factors that impact its customers, such as changes in lifestyle,
demographics, and cultural norms.

 The bank needs to ensure that it is meeting the needs of its diverse customer base, both in India and
internationally.

Technological:

 ICICI Bank needs to continually invest in new technologies to remain competitive and meet its customers'
needs.

 The bank also needs to consider cybersecurity risks and ensure that its systems are secure and resilient.

Environmental:

 ICICI Bank needs to consider its impact on the environment and ensure that its operations are sustainable
and do not harm the environment.

Legal:

 ICICI Bank needs to comply with various laws and regulations related to banking, such as anti-money
laundering laws, data privacy laws, and consumer protection laws.

PORTER’S FIVE FORCEs ANALYSIS

SBI is a well-established bank with a strong presence in the Indian market, making it difficult for new players
to enter the market. However, the Indian banking sector is becoming more competitive, and the government
is promoting the entry of new players. This increases the threat of new entrants to some extent.

2. Bargaining power of suppliers: Low

SBI has a large customer base, giving it bargaining power over suppliers. Additionally, there are many
suppliers of banking equipment and software, reducing their bargaining power.

3. Bargaining power of buyers: High

Customers have a high bargaining power in the banking industry, as there are many options available to
them. SBI needs to focus on customer satisfaction to retain its market share.

4. Threat of substitute products or services: High

There are many substitute products and services available to customers, such as online payment services
and mobile wallets. This increases the threat of substitutes to SBI's traditional banking services.

5. Rivalry among existing competitors: High

The banking sector in India is highly competitive, with many players competing for market share. SBI faces
strong competition from private banks such as ICICI Bank and HDFC Bank, as well as public sector banks such
as Bank of Baroda and Punjab National Bank.
Porter's Five Forces Analysis for ICICI Bank:

1. Threat of new entrants: Low

ICICI Bank is a well-established player in the Indian banking sector, with a strong presence across the
country. This makes it difficult for new players to enter the market.

2. Bargaining power of suppliers: Low

ICICI Bank has a large customer base, giving it bargaining power over suppliers. Additionally, there are many
suppliers of banking equipment and software, reducing their bargaining power.

3. Bargaining power of buyers: High

Customers have a high bargaining power in the banking industry, as there are many options available to
them. ICICI Bank needs to focus on customer satisfaction to retain its market share.

4. Threat of substitute products or services: High

There are many substitute products and services available to customers, such as online payment services
and mobile wallets. This increases the threat of substitutes to ICICI Bank's traditional banking services.

5. Rivalry among existing competitors: High

The banking sector in India is highly competitive, with many players competing for market share. ICICI Bank
faces strong competition from other private banks such as HDFC Bank and Axis Bank, as well as public sector
banks such as SBI and Punjab National Bank