Tech Mahindra PESTLE Analysis
Detailed PESTLE analysis of Tech Mahindra examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Tech Mahindra is the fifth largest IT company in India and is recognised as the one of the best companies to work for in India. It was placed on twenty first position in India’s hundred best workplaces, which provides it an edge when compared to the competitors like Tata consultancy services and Wipro. The adoption of AI in various process is a major technological advantage and Tech Mahindra is using it to deliver desired and better outcomes for the customers. But adoption of AI is directly impacting its workforce in BPO (business process outsourcing) and BPS (Business Process Services) and Company have reported a continued reduction in the headcount in these two verticals. Reduction in the staff, that too when the revenue of company is increasing continuously, could send a bad message especially when the company is recognised as one of the best places to work.
Image: company website
This concludes the political factors in the Tech Mahindra PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Tech Mahindra:
Tech Mahindra is currently operating in over 90 countries with a total revenue of ₹38,000 crore (US$5.3 billion), which is an increase of over the previous years. The digital business of the company currently contributes around 30% to the total revenues however Tech Mahindra aiming that its digital business would grow to fifty percent of the total revenue as the focus on 5G, cyber security, blockchain and AI increases.
The position of company is looking good in Indian context however due to the current pandemic and the increased debate around the globalization and deglobalization can hamper the projected growth of the company. Another challenge is for the company to maintain the consumption in post COVID-19, less integrated world where issues like Brexit would prevail. One of the positives that the company can use to its benefit is the new opportunities in regional paradigms and alliances.
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Social Factors:
Following are the social factors impacting Tech Mahindra PESTLE Analysis:
Over the years Tech Mahindra has provided a social environment which revolves around its stakeholders, not only the company is currently operating in over 90 countries but is known for its best-in-class work environment. The company has proven itself to be flexible to the change be it in form of technology, socio- culture or generational. Recent example of digitalization proves how Tech Mahindra is constantly looking towards the future. The company designed and engineered a first of its kind, digital transformation tool (approved by AICTE) to upgrade the skills of its workforce, the company partnered with various institutes like Jawahar Lal Nehru Engineering College (JNEC) to offer programs which ae aimed at addressing the industry wide demand of new age skills and technologies like Artificial Intelligence and machine learning. With help of such steps students and unskilled workforce gain opportunity to witness digital transformation and cultivates a new social environment.
Technological Factors:
The technological factors in the PESTLE Analysis of Tech Mahindra are mentioned below:
Digital business of Tech Mahindra currently contributes thirty-six percentage of the total revenue, and the company plans to take it way up to fifty percent. One of the major reasons behind this growth is that company focused on technological advancement. It is becoming a leader in industry when it comes to 5G technology and it continues to bet on new age technologies like engineering services, cyber security and blockchain. Post pandemic new opportunities and demand will ramp up in this particular field and the race to provide solutions related to in cyberspace and 5G will increase and company must be hoping that its investment will pay off.
As companies like Huawei and Eriksson are ramping up the hardware part, it has this opportunity to grab the software part of the process and develop 5G powered solutions to enterprises as well as telcos and companies’ investment in this spectre would definitely help.
Legal Factors:
Following are the legal factors in the Tech Mahindra PESTLE Analysis:
There were lots of legal issues revolving around Tech Mahindra’s takeover of Satyam Computers Services, ranging from IT department, Enforcement Directorate (ED), court orders and employee mood. However, after the matter was resolved the deal turned out to be great for the company as is proven by its growth. In 2020 Pune labour office issued notice to company accusing Tech Mahindra of reducing the salaries of its employees in the midst of COVID-19 Pandemic to maintain its profitability. The company is recognised as one of the best places to work in India and claims to upskill its labour force as per the technological advancement but at the same time contributed to the unemployment and job loss in the times of uncertainty.
Environmental Factors:
In the Tech Mahindra PESTLE Analysis, the environmental elements affecting its business are as below:
Tech Mahindra believes in making best use of technology to sustain the environment and society will go a long way. And it is among the top 5 sustainable IT company in the world.
It also focuses on the climate change and green energy and have installed solar plants in ten of its sites and helps in reducing emissions and focusing on renewable energy. It is also only Indian IT company in world to score double A in CDP climate and CDP water 2020. The company also focus on the representation and women empowerment and 30% of workforce are women.
To conclude, the above Tech Mahindra PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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