Infosys Pestel Analysis

Internal environment: The vision of the company is to be a globally respected and sustainable company and it is working extensively to become one. The company’s Corporate Governance policies ensure effective engagement with the all the stakeholders. According to the Infosys annual report 2017-18 “Navigate the Next” the strategies for the year 2018 is to infuse automation and intelligence, to expand localization, reskill talent and invest in digital capabilities. The company focuses on creating a sustainable ecosystem in all the three dimensions namely economic, social and environmental development.

External environment:

Political: Infosys provides services worldwide. Infosys has 18 offices in the US and any political changes in the US will have a direct impact on the company’s business. The company has relationship with 50 countries and is involved with government in every country. India’s relationship and policies with these countries will have a significant impact on the growth of the company in these countries. Any amendment in the foreign policy will also affect a lot. Also, it has acquired companies in US, UK, Israel and Australia. The company’s headquarter is in Bengaluru, Karnataka which has an alliance government and has not been on the same pages with the central government for some time which have now changed but and it may affect the company a little. The company is planning to expand localization of business. Till date it has been maintaining a good relationship with the government of India but in the US the companies which outsource are not given tax benefits, so it is making it hard for the company to break through the rich markets.

Economic: India is the 2nd fastest growing economy in the world and the economic conditions for any company to operate in India is very favorable. IT sector contributes to 7.7% of the GDP in India. Infosys Technologies limited is the 2nd largest IT company in India by revenue. According to the Infosys Annual Report there is a positive growth in the net profit and the revenue generated in the year 2018 as compared to that in 2017. Though the growth is positive but the rate is not very significant and the pace with which the company is growing is also very slow. On June 29, 2018 its market capitalization was $42.23 billion. The credit rating of the company is A- (rating by Standard & Poor's). The effect of GST and Demonetization was seen prevalent in IT sector as well. The revenue generated in the year 2017 is Rs.68484 Crore and the net profit of Rs.14353 crore. The growth in terms of revenue in the year 2017 is 9.6%.

Social: Infosys technologies limited has a diversified work culture with a workforce of 129 nationalities. Out of the total workforce 89% are based in India and 36% of the total employees are women. It has world’s largest training center or corporate university in Mysore with a purpose to create future leaders and enable their work force. One out of the many agendas in the Infosys annual report 2017-18 is to reskill the existing workforce. The working environment is very positive and healthy. The focus on the company is to create a sustainable environment and works on different areas such as health, art and culture, rural development and destitute care. The employees get various onsite opportunities and the work culture, infrastructure and training at Infosys is considered to be one of the best.

The Infosys Foundation is working to create opportunities for unprivileged through support program. The Infosys Foundation USA is working to bridging the digital divide in India. Along with these there are various CSR activities done by the company to ensure a sustainable social environment.

Technological: Being an IT company, the company has to keep pace with the changing technologies and the demands. The company is shifting its focus towards Artificial Intelligence which is becoming the need of the hour. The company provides services and products in all the key dimensions of the technology industry; the key products and services that Infosys Technologies Limited has are NIA- a next generation integrated AI platform which is driving automation and innovation by providing intelligent business solutions, Panaya a cloud suite and Infosys Information Platform (IIP) which is an analytics platform and Finacle which a global banking solution. Most of the technological services provided by the company are not exclusive and is done by most of the IT companies in India. Now the company is focusing on providing digital services in various sectors which are inclining towards automation. A step towards automation will have a business huge impact on the company’s growth.

Environmental: The company is highly engaged in creating a sustainable environment and has started various sustainability projects. It has various policies that ensures to protect environment and exploit the resources. The headquarter of Infosys Technology Limited is in Bangalore, Karnataka; which is facing major water crisis and it is assumed that it might soon become a dry city. The company should focus on the water crisis and work accordingly. The company has reduced per capital electricity consumption by 50% in the year 2016 and the no. will reach 100% by the end of 2018. The focus of the company is to switch to renewable sources for business operations. Creating eco-sustainability has become the need of the our and the company has been actively working in creating one.