Group No.1SuchitPratikNishaRoshniVikramRishikesh

WIPRO LTD.THE NEW-FACE

OF GLOBAL COMPETITION

Facts of the Case

How did outsourcing work to Wipro improve General

Electric’s ability to compete in the global economy?

With the help of outsourcing GE was able to reduce the cost of labour.

It will also help to increase the efficiency of GE to compete in the global market.

It help General Electric to get local knowledge to enter in to the India market and also in other Asian market.

Does such outsourcing harm or benefit the American economy?

Outsourcing of work harm the American workers whose jobs were outsourced

Did General Electric help to create Wipro? How?

GE provide work to Wipro.

It provided a management model (six-sigma) for Wipro to emulate and learn

GE starts giving work to other Indian companies which will make pressure on Wipro, in that response Wipro increase the efficiency and quality of work.

GE provide good will to the Wipro which will help them to get an business from other multination companies.

If India’s IT companies continue to prosper, over time

what do you think will happen to the income differential

between software programmers in the United States

and India? If India’s IT companies prosper, and demand continues to increase, wage

rates will equalize between the U.S. and India because given the population differentials, it is likely that new U.S. programmers will be paid less that formerly. Moreover, as demand for Indian engineers grow, assuming insufficient supply of skilled Indian engineers, the price (wage) of such engineers will rise.

If wages will still not equalize because it is possible that U.S. programmers will move on to higher-paid, higher level jobs so that the income differential will not equalize.

If wages will still not equalize because the world is not limited to India and the U.S., and other low-cost, highly skilled countries (such as China) may step in with a fresh supply of engineers and prevent Indian software engineer wages to rise completely to US levels.

What are the implications for the American economy?

The implications for the American economy are a downward

pressure on wages

The price of software will decline.

If routine programming is done in India, U.S. programmers can thrive by focusing on more innovative work, higher-skilled activity.

Since 2000, Wipro has moved abroad, establishing sales

offices in 35 nations and design centers in nine. Why is

Wipro doing this? Wipro is developing client relationships that can facilitate the import of

labor into India.

Wipro has learned that it is important to avoid the mistakes which is committed by the US firms i.e. situated ‘far from the client’. Wipro wishes close to the client so that they can know what client actually want.

Wipro also wishes to create the ‘value chain’ in the IT business not only doing normal work gave to it but also by doing more profitable project.

Wipro wants to have a “local presence” by hiring local nationals who understand the local market.

What would happen to the company if it did not follow this strategy?

If Wipro did not get close to its client, they would have slower growth and loss of competitive advantage.

What does the rise of Wipro teach you about the nature

of the global economy in the first decade of the twenty

first century?

Wipro has a competitive advantage in terms of cost, but it needs to reinvest some of their gain into closer relationships with the client.

Face-to-face still matters – and even in the midst of globalization, it is still necessary to “customize” to your client’s particular preferences.

Just like Wal-Mart suppliers who locate representatives in Bentonville, GA (this is where Wal-Mart is headquartered), Wipro has discovered that it needs a local presence.

 

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