Wipro's strategy for growth

By S. Varadharajan

CHENNAI, JULY 7. Wipro, a leading India based provider of IT services, has drawn up its strategy to become a world leader in the field. The company has stated in its latest annual report that the markets addressed by it are undergoing rapid change due to the pace of technology development and change in business models. It believes that these trends provide significant growth opportunities.

Wipro expects to significantly grow its global IT services business and the percentage of its total revenues and profits contributed by this business over the next few years. It hopes to achieve this objective by identifying and developing service offerings in emerging growth areas as separate business opportunities, such as infrastructure support services, business intelligence services and telecommunication, internet and application service providers.

It is also planning to aggressively develop the research and development services by focussing on high growth markets such as telecommunication, mobile communication and the internet and high growth technologies such as embedded software. Also, the company will be leveraging its experience in providing IT services in the Indian market and its access to existing clients outside India to provide global support services.

The intention is also to increase the number of clients through a dedicated sales team focussed on new client acquisitions and increasing its presence in Europe and Asia. The goal is to make every new client account earn over $1 million in annual revenues within twelve months. Also the company intends to increase its share of business with existing clients by expanding its range of IT solutions and by increasing its knowledge of industry segments and individual client businesses to allow it to better understand client requirements.

The focus would be on improving operating margins by increasing the revenue per IT professional by providing higher value added services, increasing the number of productised services and increasing the proportion of the company's fixed price contracts.

In India, the growth plan includes offering a full service technology solution including systems integration, support services, software and networking solutions along with branded hardware products which the company hopes would enhance profitability significantly.

The company is also planning to pursue selective acquisitions of IT service companies that would allow it to expand service offerings and acquire additional skills. This would strengthen its relationships with clients and allow the company to realise higher revenues from them.

In pursuing acquisitions, the focus would be on companies where a significant portion of their work can be moved offshore to India to leverage the company's low cost offshore delivery model and realise higher margins.

Traditional business

The company has been in the consumer care business since 1945 and the lighting business since 1992. The consumer care business has historically generated surplus cash for the company to be able to grow in other businesses. The strategy is to maintain a steady growth in operating income through efficient capital utilisation, strong brand name recognition and expanding nationwide distribution network.

Send this article to Friends by E-Mail

Section  : Business
Previous : Reliance Petroleum loses Rs. 515 cr. on exports
           of petrol, diesel
Next     : FIIs net buyers in equities