1. CASE ANALYSIS (HCL)
CORE COMPETENCE AND FLEXIBILTY
BASED STRATEGIES

2. INTRODUCTION-
 HCL (Hindustan Computers Limited) is a leading global
Technology and IT enterprise whose range of services spans
Product Engineering andTechnology Development, Application
Services, BPO Services, Infrastructure Services, IT Hardware,
Systems Integration, and Distribution ofTechnology and
Telecom products in India.

3. HCL Today
 The HCL Enterprise comprises two companies listed in India:
HCL Technologies and HCL Infosystems. HCL Technologies is
the IT and BPO services arm focused on global markets, while
HCL Infosystems deals in the IT, Communication, Office
Automation Products & System Integration arm focused on the
Indian market. Today, HCL has 45,000 employees of diverse
nationalities, operating across 17 countries including 360
service centers in India.
 HCL has global partnerships with several leading Fortune 1000
firms, including several IT andTechnology majors.

4. HUMAN RESOURCES COMPETENCIES
 Trained professionals
 People oriented-ness
 Human innovativeness
 Talent and creativity of HR
 Dedication of employees

5. HCL’s current HR strategies
 Managing People up to Speed with IT
 Bringing People up to Speed with IT
 Training
 Speciality of Work force

6. MARKETING COMPETENCIES OF HCL
 Focus on customer solutions through human value
addition
 Effective distribution system
 Global presence

7. R&D COMPETENCIES
 Continuous technology development and up
gradation
 One of the best software development
centers in the world

8. FINANCIAL COMPETENCIES
 Strong financial position
 Returns above industry average

9. Ratios Industry average
1998-97 1997-96 1996-95
Net Profit Ratio 8.92 6.94 7.37
Rate of Return on Fixed Assets 29.96 28.92 32.64
Rate of Return on Total Assets 10.83 8.41 9.89
Return on capital Employed 31.83 31.42 31.07
Return on Shareholders’ Equity 26.84 22.57 23.65
Divident payout (D/P) Ratio 0.33 0.55 0.02

10. Ratios Fiscal year
2011 2010
Net Profit Ratio 17.22 20.18
Rate of Return on Fixed Assets 2.73 2.56
Return on capital Employed 85.04 77.92
Return on Shareholders’ Equity 7.5 4.00
Dividend payout (D/P) Ratio 49.97 29.86

11. Core Competencies
 A core competency is a concept in management theory
originally advocated by CK Prahalad, and Gary Hamel,
two business book writers. In their view a core
competency is a specific factor that a business sees as
being central to the way it, or its employees, works. It
fulfills three key criteria:
1. It is not easy for competitors to imitate.
2. It can be re-used widely for many products and markets.
3. It must contribute to the end consumer's experienced
benefits.

12.  A core competency can take various forms, including technical/subject matter
know-how, a reliable process and/or close relationships with customers and
suppliers. It may also include product development or culture, such as employee
dedication, best Human Resource Management (HRM), good market coverage
etc.
 Core competencies are particular strengths relative to other organizations in the
industry which provide the fundamental basis for the provision of added value.
Core competencies are the collective learning in organizations, and involve how
to coordinate diverse production skills and integrate multiple streams of
technologies. It is communication, an involvement and a deep commitment to
working across organizational boundaries. Few companies are likely to build
world leadership in more than five or six fundamental competencies

13. Competitive advantage
 When a firm sustains profits that exceed the average for its
industry, the firm is said to possess a competitive advantage
over its rivals. The goal of much of business strategy is to
achieve a sustainable competitive advantage.
 A competitive advantage exists when the firm is able to
deliver the same benefits as competitors but at a lower cost
(cost advantage), or deliver benefits that exceed those of
competing products (differentiation advantage). Thus, a
competitive advantage enables the firm to create superior
value for its customers and superior profits for itself.