Cap Gemini Sogeti's (CGS) strategy before the year 1988 revolved around diversification through merger and acquisitions and internationalization of the company, which were considered as the driving forces of any industry in the early 1990's. Technology is key to the Information Technology sector. In this document we will analyze the competitive environment, evolution of the demand for IT services, the impact of this evolution on the corporate world along with the strategic opportunities.
[...] Strategic opportunities Introduction According to Porter's analysis the strategic options depends on the manager's will for the Firm, the firm's resources, the firm's competitive environment, and at last the customers and dealers of the firm. Here is a list to recapitulate the main lines of the problem: The basic problem is that Cap Gemini's structure is not shaped around the overall strategy of the firm. From that point emerge all of the following problems: Mere managing power from the top. A weak corporate image at an international level Little corporate coordination between the different business areas. Heaps of red tape in the firm. [...]
[...] This solution does not resolve the problem of international groups who need to find services that match to their specific needs everywhere in the world. To a certain extend, they have the same needs everywhere in the world. So the solution would be to create a special department in the firm dedicated to follow big international customers. Such departments are named “grands comptes” in French corporations. These departments are shaped to follow regularly significant international clients and coordinate the action of different consultants in the world. [...]
[...] The internationalization process can be described as follows: Acquiring similar abilities through the take-over of Cap France/Europe and of Gemini Computer System (U.S.A.), in 1974-1975. Gemini's only failure was in the UK (Cap U.K. and Gemini U.K. have separated from the rest of the group). Acquiring new abilities in public administration management, in all-in- one systems, and also in consulting, marketing and maintenance software bundles (SAP For instance, in the end of the 1980s, CGS takes progressively control of the French groups Sesa in order to meet the needs in telecommunication software. [...]
[...] Gemini consulting is to expand itself and cap Gemini sogeti will certainly have to leave its system operation branch. Instead of selling its own solution, Cap Gemini will have to sell the IT solution that best fit to its customer needs. The system information branch will be replaced by alliances with other companies. Moreover, consulting services are more profitable than system operation. Keeping the system operation branch is good if the strategy is to provide a full service to the customer. [...]
[...] Flexibility is yet another important factor for Gemini's settlement on local markets. Diversification through merger and acquisitions: The company's core business is to offer services in the information technologies sector. In 1967, when the company was created, Sogeti's mission was essentially to offer technical help and computerized management services for local companies. In the 1970s, the company diversified itself into consulting in data management, software programming and distribution of bundled software. At the end of the 1980s, following the acquisitions of Cap France/Europe, and of Gemini Computer System (U.S.A.) the group abandons its hardware activities and its technical activities such as data processing: Sogeti abandons one of its main activities, data processing outsourcing Cap sells its software distribution activity. [...]
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