Analysis Of Sri Lankan Advanced Technology Center Business Essay

This study will concentrate on Sri Lankan Advanced Technology Center ( ATC ) of Virtusa Corporation. Bing a house, runing in a quickly changing, progressively competitory market, it is a great challenge to derive competitory advantage when rivals are offering similar merchandises and services. Thus Virtusa need to be cautious about the alterations impacting the concern environment and should come up with new schemes to get the better of these challenges.

Macro environment factors were analyzed through the PESTEL model and cardinal drive forces were identified. These cardinal drivers are authorities Support on the IT Sector, rapid technological alteration, growing in the IT industry and high demand for high quality merchandises. Changes in these factors would straight impact the houses runing in IT industry in Sri Lanka. Micro environment factors were analyzed through the Porter ‘s five forces theoretical account and the attraction of the IT market is discussed and the relationships has been identified. Hence the strategic groups will be categorized to place the current competition in the IT industry.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Finally Core competences of Virtusa are discussed through Value concatenation and utilizing VRIO model and this study will further remarks on the strategic way of the Virtusa Corp. Sri Lankan ATC.

Overview

IT industry in Sri Lanka

IT industry in Sri Lanka had a rapid growing over the last decennaries, with extremely literate, easy trainable and intelligent work force. With the latest engineering available ; the industry offers a broad scope of services such as consultancy, system integrating, package systems design, support services and so on.

The major markets serviced by Sri Lankan IT companies are USA, UK, Singapore, the Netherlands, and the Philippines. For this study ‘s purpose merely Sri Lankan Software market and their local rivals will be considered.

The Company and SBU

Virtusa is a publicly-traded, rapidly-growing planetary IT services company with over 3,700 advisers and 14-year history of supplying full lifecycle of package development. Kris Canekeratne together with a little squad of co-founders established Virtusa in 1996. Today, Virtusa is recognized as a engineering thought leader, holding amassed a wealth of emerging engineering expertness that spans Retail, Telecom, Storage and Financial Services. The company has the ability to take advantage of its industry knowledge-base and best patterns to present an alone ROI to its clients holding deployed 400+ merchandise releases for over 100 merchandise developers, Virtusa has extremely reputable client base and besides has partnerships with taking package companies to develop and prove over one 1000 package merchandise releases.

While it is headquartered in Westborough, MA, its offshore development centres, known as Advanced Technology Centers ( ATCs ) , are in 3 locations in Asia: Hyderabad & A ; Chennai, India, and Colombo, Sri Lanka. As for the current competition in IT industry, Virtusa has decided to spread out their wings to other emerging markets. With this connotation Sri Lankan IT undertakings being undertaken, this study will merely concentrate on the Advanced Technology Center in Sri Lanka as a SBU.

Macro Environmental / PESTLE Analysis

There are many factors in the macro environment that will impact the concern of any organisation. Tax alterations, new Torahs, trade barriers, demographic alteration and authorities policy alterations are all illustrations of macro alteration.

Political factors

Current Sri Lankan political environment known stable compared to other Asiatic neighbour states. The terminal of the 30 plus twelvemonth civil war has been favourable for turning industries, with new industries like IT doing important economic parts.

Recent tendencies show Asiatic parts pulling multinationals switching their Information technology bases ( outsourcing ) into states in the Asia, with the purpose of working the widely available cheap and extremely skilled labour. Sri Lanka has besides been able to pull considerable undertakings from FDIs such as Virtusa itself outsourcing their undertakings to Sri Lankan and Indian ATCs.

These planetary tendencies in IT industry has in bend increased the political attending on the industry, with authorities concentrating on IT instruction to guarantee extremely skilled labour force, for illustration the debut of IT to school course of study and the constitution of an ICT bureau to develop young person to guarantee future growing of the industry.

The authorities ‘s function on the ICT sector

The authorities introduced the e-Sri Lanka model in 2002 for the development of the ICT industry with the aid of the Information Communication Technology Agency ( ICTA ) . Under this model the authorities introduced e-government policy which is utile for new organisations to better the ICT literacy rate and cost effectual connectivity throughout the state.

Figure 1: Elementss of e-Sri Lanka Vision ( Hanna, 2003 )

Government vision is to complect all the authorities offices in the state through a individual web portal. The construct of e-government is to let citizen to bask services anytime, anyplace such as ( Hanna, 2003 ) : E-Parliament, E-Cabinet, Financial direction, revenue enhancements, imposts, payment and so on. Effective execution of this platform will assist to better the computing machine literacy rate throughout the state.

Duty ordinances

The Sri Lanka Telecom Regulatory Commission ( TLC ) is responsible for ordinance of the duties of services provided by dominant participants in the ICT industry. The TLC with authorities and ICTA besides engage in developing IT installations, IT substructure through execution of new authorities policies such National Telecommunication policy to keep stableness in the industry and remain competitory, while protecting the consumer from monopolizers.

With these factors it is evident that the ICT industry in Sri Lanka is protected by authorities ordinances and policies. Most of the private houses are encouraged to set about authorities undertakings so they can gain net incomes and turn their concerns. For illustrations Virtusa is working collaboratively with ICTA in order to construct this e-government model, assisting to make web portal for the vehicle licence reclamation procedure which is called e-revenue licence. Post war status of the state has shifted attending to Reconstruction attempts in state, supplying farther growing in all industries. The increased authorities outgo on substructure would pull FDIs taking to knowledge and technological transportation taking to farther high growing rates in the IT industry.

Economic Factors

Though a little unfastened economic system, the Sri Lankan economic system has undergone major transmutations during the past few decennaries, most late holding suffered through the planetary fiscal crisis. Consequently, the IT industry of Sri Lanka has been instrumental in the contributing to a sustainable economic growing.

The reform procedure since 1977 Acts of the Apostless as the cardinal drive factor for the Sri Lankan economic system to incorporate into the universe economic system. This enabled the economic system to bask the benefits of globalisation, as a figure below shows the increased openness of the Sri Lankan economic system since so. ( Islam & A ; Hossain, 2006 )

Figure 2: Openness of Sri Lankan Economy ( Islam & A ; Hossain, 2006, p. 176 )

Bing an unfastened economic system and fueled with the benefits of globalisation, the Sri Lankan IT industry enjoyed further growing potencies. Sri Lanka trades with the taking IT brands and IT educational institutes from around the universe and besides is one of the key participants in the IT instruction sector in the South-Asian part. The IT industry acts as a service exporter lending vastly to the growing of the economic system.

Harmonizing to the World Bank economic update on Sri Lanka ( 2009 ) , economic activity decelerated aggressively at the oncoming of the planetary fiscal crisis. Presently with the gradual recovery of planetary economic crisis, Sri Lankan economic system is likely to see a growing through exports, addition in touristry and possible greater FDI influxs. These economic growing factors will consequence on industry sectors including IT by easing their growing prospective at the same time.

Most significantly exchange rate influences the IT industry in general. When covering with foreign providers in geting licences and hardware constituents, exchange rate fluctuations affect houses concern in legion ways, with licences bing big amounts of money due to high hazard exchange fluctuations. For an illustration colonies in US dollars, would ensue in losingss for the company if there ‘s a high volatility of the exchange rate of US dollars against Sri Lankan rupees.

The addition of involvement rate on adoption can be considered as unfavourable tendency for the IT industry in general. When analysing the involvement rate on adoptions for the fiscal twelvemonth of 2010, there has been a worsening tendency in the involvement rate by and large. So it ‘s a positive mark for any industry which need heavy investings, supplying growing potencies on the IT industry sector leting the houses to spread out their concern operations.

Socio cultural factors

As a multicultural community, the urban countries of the state aggressively contrast with the rural country with its highly-skilled, educated and competitory English speech production work force, and developing IT cognition in the rural countries has remained a barrier for spread outing concerns and other investings in IT development for the companies

Cultural barriers

Below are some of the cultural barriers adopted from “ The Impact on National Culture on E-Government Execution ” ( Ali, Vishanth, & A ; El-Haddadeh, 2009 )

Language & A ; ICT literacy rate English is used merely as a 2nd linguistic communication ; many rural citizens have no cognition of English

Lack of Awareness: citizens ‘ deficiency of consciousness of e-services ; citizens uninterested in e-government

Religion and beliefs: Negative impact on the society and peculiarly the young person used by leaders and the older coevals becomes a barrier to developing IT

Table 1: Computer consciousness and Computer literacy of family

population ( aged 5 – 69 ) by sector and state ( DCS, 2009 )

Though the state ‘s literacy rate has increased to 31.1 % in the urban countries the rural consequences merely 19.3 % which is a little addition compared to 2006/2007. The authorities is taking steps to educate citizens about the IT industry and increase literacy rate and linguistic communication accomplishments.

Despite such cultural barriers the authorities hopes to construct an e-society and make consciousness about the IT industry. Increased consciousness on IT within the society can be considered as a favourable tendency that would straight act upon the industry growing in general. Increased Internet handiness has facilitated the IT acquisition to a great extend, therefore supplying many chances for growing in countries of E-business and E-commerce, as shown by the increased popularity of e-banking and e-shopping.

Technological Factors

Since the late 90s, Sri Lanka has observed a major encouragement in IT industry. Particularly in the country of software-engineering, the skill-base is at a applaudable degree compared to some other Asiatic states. The technological promotions have positively contributed to the growing in the IT sector making many chances for the industry. Technology is quickly altering over clip and houses need to follow latest engineerings in order to remain in the concern. The early version of latest engineerings is a cardinal factor which would enable the houses to accomplish a comparative advantage over their rivals. These technological promotions will fuel IT work force through preparation and development as a agency of fiting them with all the latest engineerings that would in bend help the houses to supply more latest technological solutions for their clients. The figure of users of services like Internet Banking and Mobile Transactions are on the rise implying that people are confident with these services.

Environmental Factors

The natural environmental factors are contemporarily one of the cardinal tendencies for any concern to see in doing strategic concern determinations. Relative to the IT industry, the most relatable issue will be cost of energy in add-on to other environment debasement factors which need to be considered possibly in a “ social-responsibility ” position. Most of the houses have adapted “ Go Green ” construct which will take at minimising sum of power use.

Sri Lanka already concentrates on figure of undertakings on prolonging environment direction such as those on-going and planned undertakings conducted through the aid of ADB particularly in conveyance, H2O supply energy, and rural development ( ADB, 2008 ) . Such undertakings provide assorted chances for the IT industry, such as stand-alone or web-based undertaking management/monitoring applications.

Legal Factors

Given the babyhood of the Sri Lankan IT industry, and the induction of the e-government undertakings, Sri Lankan legislative substructure requires more legal models to regulate and supervise the technological challenges and refering issues.

The Customs Act states that all imported media such as package Cadmiums and hardware have to be declared at the Customs. Besides there is Intellectual Property Rights Act which will restrict utilizing other trade name names and Son without holding proper understandings with these parties.

The Sri Lankan Information Communications Technology Agency ( ICTA ) has strengthened its attempts in broadening a generic planetary criterion like United Nations Commission on International Trade Law ( UNCITRAL ) and was able to sign some of the needed modern-day ICT Torahs such as e-Transactions Act and Computer Crime Act ( UNPAN, 2009 ) . This is an indicant that the legislative construction is in the procedure of alining itself to congratulate the demands of the rapid germinating IT industry.

Key drive forces

Through the PESTEL analysis, several cardinal drivers of alteration that influence the IT industry in Sri Lanka can be derived.

Government Support on the IT Sector

Government has clearly identified the importance of the IT sector and supports the growing of this sector by giving focal point to IT instruction and bettering the IT substructure in the state. This would supply further chances for the IT houses to spread out their concern activities into many specialised countries of the industry in future.

Rapid Technological Change

Rapid growing and alteration in engineering will impact the IT industry by easing high degrees of fight and distinction among rivals for the ability to follow new engineerings.

Growth in the IT Industry

With the Reconstruction attempts, Government has increased outgo on substructure that would pull FDIs taking to high economic growing, fueling growing rate of the IT industry, by pulling new entrants to the market. .

High Demand for Quality Products

As malfunctioning of package is unacceptable, clients place importance on the quality of the merchandise instead than the monetary value of package ; therefore low cost does non distinguish competition in this industry. Hence, even the most cost-sensitive clients will see quality over monetary value, and it remains a cardinal country when finding an appropriate scheme for IT house in Sri Lanka.

Changes in these cardinal drive forces would straight impact the houses runing in IT industry in Sri Lanka.

Micro Environmental Analysis

Five Forces Analysis

Michael Porter developed the five-forces theoretical account in the 1970s to analyze the five chief structural elements in any industry ; Figure 3 provides a sum-up of these forces ( Bamford & A ; West, 2010, p. 103 ) .

Figure 3: Five Forces of Industry Structure ( Bamford & A ; West, 2010, p. 104 )

Based on five forces, the attraction of IT industry in Sri Lanka is evaluated as follows:

Menace of New Entrants

The competition in an industry will be higher if it is easier for other houses to come in this industry. The menace of new entrants will depend to the extent to which there are barriers to entry. When analysing the IT industry, there are several factors that impose certain barriers for entry. The most common barriers are economic systems of graduated table, high initial and investing costs, trade name trueness of clients, protected rational belongings rights like patents, high shift costs for clients and statute law policies and authorities actions.

Since the IT industry in Sri Lanka is in growing phase the impact of economic systems of graduated table on this industry is minimum. Government uninterrupted support on IT industry will prefer the new entryway to the market. Government ordinances and policies are aligned to back up the emerging houses come ining the industry. Even though, entry to the IT industry is non easy as it involves partnership fee and latest substructure, doing entry costs high. As the initial capital demand is higher it ‘s harder for new enters. Besides provided that the IT solutions necessitate the acquisition and care of partnerships with different participants such as Sun, Oracle and Microsoft, trouble in obtaining such partnerships Acts of the Apostless as a barrier.

Customer trueness is another component that threatens the new entry. Most of the cardinal participants presently in the market have differentiated their merchandises and services. And their trade names are good known and the client trueness is high in this industry since the shift cost is high. The demand of a proficient support squads to incorporate and keep IT systems is besides in bend create a barrier for most of the new entrants. Pull offing extremely proficient work force is dearly-won and therefore, most organisations to develop a competent work force are competitory advantage over their rivals.

Most of the dominant houses in the market is already holding extremely skilled proficient support squads and holding a good client perceptual experience and enhanced relationships, therefore cut downing the figure of new entrants to the industry.

Rivalry among Groups

With the industry undergoing fast growing rate, and in an acclivitous development, the industry is still pulling competition, despite the dominant participants in the market followed by the middle-sized houses. The competition between these participants is high. The degree of distinction of merchandise is another factor which will find the place of the competition. Early version to new engineering allows the houses to distinguish their merchandises and services from their rivals. This enables the decrease of competition to some extent since the shift cost is higher for clients. So most IT houses focus on specialisation on certain countries instead than aiming the whole IT market.

The quality of the package merchandises and services is more important than monetary value, therefore most houses work towards constructing client assurance and relationships to guarantee long lasting concern dealingss, in add-on to value added services such as solutions and support for their client base. Exit barriers for the IT industry are really high since the initial investing is high and houses need to set batch of resources, and competition remains high, as some houses are stuck with the concern despite desiring to issue.

Although a low pricing scheme helps competition in other industries, for IT it ‘s the quality of the merchandise that is important for the clients. Even though the IT industry in Sri Lanka is in growing phase as a whole, by and large we can state that competition among competitions is low due to above facts.

Menace of Substitutes

A menace from replacement exists when there are alternate merchandises with lower monetary values and of better public presentation for the same intent. The competition from replacements can besides be affected by the easiness which client can exchange and if switching costs are low or undistinguished. In this instance, the exchanging cost in this industry is high we can see that the menace of replacement is bit low for IT industry than in other industries.

So many engineerings and linguistic communications are being used in the procedure of a package development. Competing houses may utilize one of these engineering or mix of engineerings. So it ‘s of import to hold extremely skilled applied scientists in these divergency engineerings to hold an border over other houses. Besides many of the clients prefer heightening bing package instead than construct it from the abrasion for cost effectivity. So the inclination to get down a undertaking from the beginning is low where the IT houses could hold earned more net incomes. Traveling one merchandise from one seller to another is dearly-won. Hence the menace of replacement is low if the houses are working in uninterrupted development undertakings.

Pirated package freely available on cyberspace can be considered as another signifier of replacement. These illegal transcripts of original package produced by different sellers can be downloaded from cyberspace for a minimum cost and configured consequently to provide the client ‘s demand. However, replacements may make impact on new smaller undertakings particularly in footings of cost when such solutions are risk free and do n’t impact the concern continuity in greater graduated table. Yet due to the deficiency of mentions, proficient support and assurance like public presentation, expandability of the merchandise of those replacements, the impact would be minimum.

Since the clients are quality witting than the monetary value the menace from replacement merchandises is acquiring lower, and therefore the impact from the replacements for IT industry is undistinguished.

Dickering Power of Buyers

As every house is prosecuting in a ferocious competition by merchandise distinction and value added services the purchasers has a high bargaining power in IT market. This is due to the fact that the clients are provided with the chance to take between Numberss of houses, such as demand for drawn-out payment strategies on involvement free footing.

Customers are willing to give cost for high quality executions particularly when the proposed solution is a gross generator or a critical system. Customers therefore by and large do non hold much dickering power over buying of merchandise and support services chiefly due to the quality consideration and the fewer figure of dominant suppliers.

Dickering Power of providers

This analyzes how easy it for providers to drive up their monetary values and how it will impact the industry. Firms in IT industry involves in a figure of classs of undertakings, and hence, here we take a few classs and look into further who the providers of those classs are and the power of the providers. Chiefly we can see sellers who allow IT houses to utilize their engineerings and acquiring a trueness fee from them as providers. These sellers charge a immense sum of money and it ‘s truly difficult to acquire a partnership with them. Besides there are merely few dominant sellers such as Microsoft, Sun and Oracle. Since the cost of exchanging between these providers is higher, the bargaining power of the providers increases to a great extent. Sometimes it may cut down due to the handiness of big figure of providers supplying homogeneous merchandises and engineerings.

Different engineerings used by different houses in order to supply package solutions. To utilize some of these engineerings houses need to pay trueness fee for the patented company. For an case JAVA engineering is owned by Sun Microsystems. To utilize these engineerings houses should hold understandings or partnerships with these providers. Besides the IT industry is the exclusive client of these providers. Hence the bargaining power from providers is significantly high in IT industry.

Decision of the Industry Analysis

With the five forces analysis, it is certain that the IT industry in Sri Lanka is really attractive. This is due to the fact that the industry is presently sing positive authorities support. However, high entry barriers with respect to high capital investings in footings of preparation and development and purchaser trueness deter new entryway. Besides it ‘s difficult for new entrants to gain the partnerships from the dominant engineerings suppliers. Furthermore, fewer sellers as providers will non supply a broad array of picks for the IT houses that would increase the dickering power of providers to a great extent. The industry competition is low due to client trueness and quality concerns. Menace of replacements is low due to the facts, that the shift cost is high and clients are more choice centric than the monetary value. Dickering power of purchasers is less since there are merely few major participants in the market and the shift cost is besides high.

Overall the IT market in Sri Lanka is really favourable for the dominant houses which has already settled down but non for the little houses which are come ining the market now.

Inter Connectedness of Macro & A ; Micro Analysis

With analysis we can place relationships between some of the cardinal drive forces and environmental forces. In the current context the authorities support for IT industry is high. Hence the authorities policies and ordinances will be aligned to back up the industry. This will prefer the new entryway to the market and so market competition could be higher.

Micro forces are likely to alter comparative to activities in the macro environment. Low involvement rates on adoptions would take down fiscal barriers result in pulling new entrants. Furthermore, the thrust towards geting low cost solutions would farther pull more SMEs escalating competition within the industry and would farther take to monetary value competition. Again if the exchange rate fluctuation is higher, the menace of new entryway will be lower due to the high hazard and will cut down the market competition.

Enhancements in IT technologies and substructure will impact the current competition in the market. Since the engineerings are altering rapidly the clients will travel to different houses who are capable of accommodating to these alterations. So the purchasers dickering power will increase and the replacements in the market will besides increase. Finally high demand for quality merchandises will cut down the market competition. Low monetary value competition will cut down the bargaining power of purchasers. Increased client trueness for houses supplying high quality merchandises will move as a barrier for new entrants.

Strategic Groups

When analysing the Srilankan IT industry in general, there are figure of participants with different capablenesss viing on different bases.

Table 2: Rivals in the IT market and their nucleus countries

When analysing the rivals for Virtusa corp. in footings of the extent of merchandise diverseness and the size of the organisation, we were able to happen undermentioned strategic groups.

Large organisations with high merchandise diverseness: Virtusa, Millennium IT, JKCS

Small organisations with high merchandise diverseness: Creative Solutions, Aepona

Small organisations with considerable merchandise diverseness: Navantis, Million

Small organisations with low merchandise diverseness: Information sciences

Figure 4: Analysis of Industry Competition[ 1 ]

IT industry in Sri Lanka is extremely fragmented in footings of the country of competition. As we can see there is no big house in size which has low merchandise diverseness. That means when houses are turning they tend to diverse their merchandises in order to be competitory. It is clear that the competition among these companies is high provided that their country of competition is similar to others. Merely little figure of houses is supplying a broad scope of merchandises and services that enable them to supply more incorporate and comprehensive concern solutions when compared with other houses in the market. The high investings on these solutions would promote the clients to look into factors such as industry mentions and trueness factors in finding the credibleness of a house, therefore moving as a barrier for the mobility between groups. This provides them the chance to distinguish their merchandises and services from the remainder and therefore, enable them to stand out from the competition.

Strategic capableness analysis

Core Competences

Core competences are groupings of single competences that set up singularity for an organisation ( Kaufman, Oakley-Browne, Watkins, & A ; Leigh, 2003, p. 306 ) .

Table 3: Strategic Capabilities and Competitive Advantage

( Johnson, Scholes, & A ; Whittington, 2008, p. 118 )

Table 4: Designation of Strategic Capabilities and Completive Advantage for Virtusa

Threshold Capabilities

Threshold Resources

Tangible

Latest engineerings and handiness of advanced engineering Centres, IT equipments and latest systems, sufficient capital to run into demands, skilled work force, big base of loyal clients

Intangible

Knowledge & A ; experience in the ICT industry & A ; long established client and supplier relationships

Threshold Competences

Care of company resources such as latest IT systems

Management of skilled applied scientists and concern procedures

Keeping good company relationship with satisfied confident clients

Keeping high quality of services such as consulting, application development and quality technology services

Educating and developing the work force on package development, engineerings and equipment used and entire quality direction ( TQM )

Capabilities for Competitive advantage

Unique Resources

Tangible

Unique engineerings such as BPM, Cloud Computing, SAAS, and technological Centres such as Virtusa Business Process Competency Centre, strong financial growing rate, strong leading

Intangible

Brand image and repute

Strategic partnerships with IT giants all over the universe

E.g. : Sap, ORACLE, FAT WIRE etc.

Core Competences

Business theoretical account that the Virtusa has gained through experience and uninterrupted acquisition

E.g. : Unique Global bringing theoretical account

Unique expert accomplishments with creativeness and ability to introduce

E.g. : New advanced attacks to package development life rhythm

Ability to retain and develop extremely skilled professionals

Focuss on concern results and bettering IT efficiencies within endeavor concern processes creates enormous competitory advantage for the company clients

Ability to supply high quality terminal merchandises through the alone quality confidence section.

Peoples goaded civilization – Committed to outdo HR patterns and alining HR schemes with concern schemes.

Virtusa should guarantee in fulfilling client demands through uninterrupted betterment of strategic capablenesss for sustainability and competitory advantage over its rivals. Strong leading helps the procedure of making competitory advantage to the company with alone services, substructure and skilled resources. Most companies lack strong leading. Customers and skilled applied scientists are treated as assets for the company and long term relationship with clients build a positive image to the company and keep its repute in the heads of clients which creates success. Strong fiscal growing rate besides supports company ‘s growing. Employees and Top direction ‘s consciousness of the external environment is required for the houses growing. Besides with rapid alteration in the IT industry uninterrupted preparation of employees with latest engineering, equipment etc for adaptability are needed along with, care of resources, skilled applied scientists, and alone engineerings.

The company ‘s value proposition, industry expertness with skilled applied scientists and superior client delectation index enables it to widen their relationships with cardinal clients, which is distinguishable from its competitors.A Company ‘s nucleus strength is based on its ability to join forces efficaciously with clients, place their demands, apply company ‘s experience and penetrations and physique merchandises and solutions better, faster, and more cost efficaciously.

Value Chain Analysis

Michael Porter negotiations about an of import tool that can be used to analyse and understand the activities ( Primary & A ; Support ) of an organisation and associate them to organisations competitory place defined as the “ Value Chain. ” ( Recklies, 2001 )

Figure 5: Basic theoretical account of Porter ‘s Value Chain is illustrated below ( Recklies, 2001 )

For a company like Virtusa, it is of import to distinguish their merchandises through value add-ons and advanced characteristics through concentrating more on its value concatenation activities to enable better fight in the market and assist place and capitalise on their competitory advantages.

Table 5: Value Chain Analysis[ 2 ]for Virtusa

Value Chain Activity

How does Virtusa make value for clients? What challenges Virtusa have in its value concatenation?

Primary

Inbound Logisticss

Developing flow diagrams based on clients ‘ demands to supply the needed IT solution

Information is non accessible to rivals and difficult to entree

Operationss

work flow design is efficient

Since each solution is alone and usage to suite the demands of the several client, designated technicians are allocated to trouble-shoot and supply aid in a individualized manner.

efficient client history direction

Custom models for assorted development demands

Outbound Logisticss

Bing a company that provides digital merchandises, distribution channels are extremely accessible – normally rely on the internet/intranet or established VPNs with the clients.

On-time beta and test proving for clients in front of existent bringing deadline to guarantee enhanced and seamless applications are delivered

Supplying security and incursion proving for clients as value add-ons

Selling and Gross saless

Most of the Marketing activities are at minimum and more concentration on online-marketing

Word of oral cavity advertisement largely through client reappraisals and confessions

Virtusa besides conducts CSR activities like supplying computing machine labs and installations for schools

Service

As a consequence of efficient history direction, client feedback and responses are more direct and helps to go to outright.

Quality is ensured through continued ascents and piecing to get by with the promotions of engineerings

Secondary

Procurement

Strategic partnerships with universe ‘s prima solution suppliers like Microsoft, Oracle, IBM, Sun Microsystems… etc enables Virtusa to present first solutions and the ability to incorporate its solutions with third-party sellers.

Multiple strategic partnerships eliminates dependence on a individual provider

Technology Development

As the IT hardware is one of the most quickly germinating industries, Virtusa ensures their hardware up-to-date and complies with the industry criterions.

The intangible resource accomplishments employed at Virtusa enables them to supply sophisticated state-of-the-art solutions such as enterprise direction systems.

Human Resource Management

At recruitment degree, Virtusa is really effectual as staff are hired based on behavioral accomplishments and the proficient accomplishments are developed by supplying comparative preparation and hands-on-experience

Staff-retention mechanism is satisfactory but can be improved.

Infrastructure

The company ‘s intranet established over a VPN serves as a platform to pass on with clients every bit good as employees.

Organizational ends are communicated throughout the company and staff public presentation is applaudable.

VRIO Framework

The VRIO model by Barney and Hesterly is an efficient tool that can be used to buttockss and analyze the internal environment of an organisation ( 2006 ) . Below is the VRIO Analysis, for Virtusa based on the value concatenation analysis and nucleus competences.

Table 6: VRIO Analysis, Competitive and Economic Implications for Virtusa

Resource / Activity

Is it…

Competitive Deductions

Economic Deductions

Valuable?

Rare?

hard to Imitate?

decently Organized?

Inbound logistics

Yes

No

Yes

Yes

Competitive Advantage

Normal

( for a period )

Operationss

Yes

Yes

Yes

Yes

Sustained Competitive Advantage

Above Normal

Outbound logistics

Yes

No

No

Yes

Competitive Parity

Normal

Marketing & A ; Gross saless

Yes

No

No

Yes

Competitive Parity

Normal

Service

Yes

No

No

Yes

Competitive Parity

Normal

Procurement

Yes

No

No

Yes

Competitive Parity

Normal

Technology development

Yes

Yes

Yes

Yes

Sustained Competitive Advantage

Above Normal

Human resource direction

Yes

No

No

Yes

Competitive Parity

Normal

Infrastructure

Yes

No

No

Yes

Competitive Parity

Normal

Findingss based on Value Chain and VRIO Framework Analysis

It has been identified that Virtusa already enjoys two sustainable advantages which are Operations in its primary activities and Technology Development in its secondary activities. Virtusa ‘s technology processes to leverage a globally distributed, first technology force to plan, develop and deploy mission-critical merchandises. The technology procedures and engineerings are inimitable as they are dearly-won for rivals to copy. With Virtusa ‘s inimitable resources such as skilled applied scientists, industry expertness, alone bringing theoretical account and advanced engineerings, the company has been able to win the assurance of clients as clients feel that the company is dependable and the money they pay is valued along with speedy bringing service, and therefore supply competitory advantage. However, Virtusa should retain these alone capablenesss in order to accomplish sustainable competitory advantage, while looking out for new resources.

The Virtusa Corp. has been in the concern of integrating for a long period. Its alone platform attack for cost efficiency, industry experience trade name name acknowledgment has besides enhanced them in deriving sustainable competitory advantage with a strong financial growing in the recent old ages despite recession. As a consequence of its unique and threshold strategic capablenesss, the Virtusa is working in to monolithic undertakings local and planetary context.

Stakeholder Function

Figure 6 below shows stakeholder mapping for Virtusa corp.

Figure 6: Stakeholder Maping for Virtusa

As for the interest holder function for Virtusa, top direction of Virtusa will play a cardinal function in the organisation as they will be answerable and accountable for operations in Sri Lanka. Virtusa being a planetary company will be governed based on the regulations and policies set by its caput office. Thus the caput office besides is considered as one of the key participants. ICTA plays a critical function in IT industry in Sri Lanka hence have power and involvement to act upon the concern of Virtusa. Another cardinal participant is strategic spouses who have partnerships over engineerings. These partnerships ensures maximal bringing rate, espouses a high degree of merchandise expertness, entire solutions, execution accomplishments and support for mission critical environments. These spouses have high involvement over Virtusa and has rather important power will do them a cardinal participant.

The group who has high degree of involvement and low in power will be categorized as support informed group. Suppliers and rivals will hold high degree involvement over Virtusa concerns but they do non hold much power to act upon the concern. Bing a engineering driven organisation the skilled applied scientists plays the major function. Hence they will hold a high degree of involvement but their power is low.

Government of Sri Lanka will hold high power to act upon the concern of Virtusa. For an illustration they can convey policies which may adversely impact the IT industry in Sri Lanka. Government has less involvement on Virtusa concern ; hence it will be categorized under support satisfied group. Besides the Virtusa clients have high degree of power due to the competition but the involvement over concern is low. Support staff and 3rd parties help the concern can be categorized under minimum attempt class which has low involvement and low power.

Through this matrix it is clearly identified that there are different degrees of stakeholders who have varied involvement and power on the inception ‘s schemes. We need to properly manage stakeholders such as authorities who have more power even though their involvement is low, in order for to prolong in the market.

Decision

This study analyzes the strategic way of the Advanced Technology Center of Virtusa Corporation, in order to accomplish its aims. However the chief focal point and range of the study was to place the fight of the industry with the cardinal drive forces and strategic capableness analysis. It enhances the internal and external environmental influences and menaces, value concatenation and nucleus competences such as increased technology efficiencies and cost efficiencies of the company, strong leading with skilled resources and invention that had been able to make value for the clients through improved package development and services. Virtusa has been able to derive sustainable competitory advantage due to these consecutive factors.

However the company should farther better their strategic capablenesss and be cognizant of the changing forces and change their schemes when needed in order to stay competitory and successful in the industry. The ulterior phase identifies the strategic groups of the company and stakeholder function with strategic theoretical accounts which helps to place the stakeholder outlook and their power through which one can find their political precedences. The company needs to maintain its cardinal stakeholders satisfied in order to accomplish success in the present and future.