Infosys: The Buyout Strategy for Vision 2020
(5 pages of text)
Case (Pub Mat)
Infosys Limited, a large Indian information technology (IT) company, had set a target of achieving revenues of US$20 billion by 2020 (known as Vision 2020) and thus needed swift growth. Acquisitions were a possible source of growth, but the problem was where and what to acquire and how to take the post-merger integration factor into account for achieving this growth. Infosys Limited had already made several acquisitions, which improved the company’s client base, knowledge, and geographical expansion, but a few had also been controversial. If Infosys Limited was going to use acquisitions to continue the swift growth it needed to meet its Vision 2020, the company needed the right buyout strategy. Which business and geographical segments should Infosys Limited invest in, and what should be the key determining factors to drive the acquisitions—increased clientele, enhanced technology, or increased geographical reach?
The case can be taught in an undergraduate, graduate, or MBA course on strategy and general business management, in a module dealing with mergers, acquisitions, and alliances. It can also be used midway through a course on innovation and entrepreneurship to highlight the opportunities and challenges faced by a middle stage start up when it is going to make its first acquisition. The case can also be used in executive and management development programs on mergers and acquisitions at a time when post-merger integration issues in the changing business conditions are being discussed.
Students will be able to consider the following critical issues confronted by almost all corporate strategists:
- Understanding institutional and industrial context on a firm’s diversification and growth.
- Choosing the most effective inorganic growth mechanisms.
- Identifying the key reasons for making an acquisition.
- Devising an acquisition strategy that also addresses post-merger integration.
Information, Media & Telecommunications
India, Large, 2017
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