Porters 5 Forces Essay

2469 Words Dec 25th, 2010 10 Pages
Porters Five Forces analysis for IT industry

Wipro Technologies is a global information technology (IT) services company. It provides custom application design and development, IT consulting, systems integration, technology infrastructure out sourcing, software products and BPO services.
Michael Porter's Five Forces Model looks at five key areas- the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.
Threat of new entrants: New entrant in the market may have an effect on share of older counterparts
Threat of substitute: Due to technological advances, Quality constraints or cost effectiveness there can be a threat of the substitute on the industry.
Bargaining Power of
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The reforms have reduced licensing requirements and made foreign technology accessible. The reforms have also removed restrictions on investment and made the process of investment easier. This has tremendously helped the IT industries.
The Indian government is actively promoting FDI and investments from NRIs (Non-Resident Indians). FDI can be brought in through the automatic route, based on powers accorded to the Reserve Bank of India.
Improvement and reach of telecommunication can aid new entrants into the IT industry. Similary improvements in infrastructure and power sector can also aid new entrants into the IT industry.
Recognizing the importance of Venture Capital Funding, the Ministry of Information Technology has set up a National Venture Fund for the Software and IT Industry with a corpus of Rs. 100 crore. The main aim of the venture capital Fund is to provide Venture Capital to start up software professionals and small IT units.
Nasscom (most important promoter of the IT/BPO industry) has been playing a crucial role in helping the IT industry achieve the IT and ITES vision and make India far ahead of other players in the field of IT and BPO.
But new entrants and start ups can never be in the league of Wipro which adds 20-30 new customers every quarter and earns revenue in the range 0f 50-60 billon USD every quarter.

5 Brand Loyalty

Since Wipro

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