Capgemini SWOT & PESTLE Analysis

Strengths

1. Strong Business Strategy and financial performance: Capgemini has shown continuous revenue growth. The revenue for FY16, stands €12.5 billion, with the growth of 5.2% on YoY basis. The Operating margin of the company amounted to €1,440 million, i.e., 11.5% of revenues, up 14% year-on-year. Capgemini generated organic free cash flow of €1,071 million, up 31% compared to FY15. The company has strong, innovative background and managed to shift focus on new digital and cloud market with 30% of the revenue coming from this segment.

2. Collaboration and Acquisition of Innovative startup: The company focuses on new acquisitions and collaborations to boost the revenue and acquire new technology. Capgemini acquired Igate, which helped Capgemini to boost revenues in North America to 30%. The strategic acquisition of Oinio, Fahrenheit 212 and iGate is to expand in different markets.

3. Digital Transformation: The company has successfully changed its business as per current market trend. The digital and cloud market has grown by 29% in FY16 and accounted for 30% of total revenue. The Digital transformation in manufacturing and banking sector has given the company opportunity to explore more fields in digital and cloud market.

4. Customer Centric Approach: The company believes in providing best service to its customer through constant innovation. Capgemini has partnered with IKEA to improve user experience through online and offline services. The company meets the need of customer through continuous digitalization and providing the rich experience.

Weakness

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Opportunity

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Threat

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Political

1. Impact of Brexit in the UK and European market: Increase in protectionism politics has impacted the global free trade. The Major portion of the revenue for Capgemini comes from Europe and Brexit has severely impacted the IT business. The new policies in these countries will significantly affect the revenue and cost of operation of Capgemini. The Brexit has raised the economic volatility. The volatility has also cost the overall increase in cost and decrease in revenue due to fluctuation in exchange rates.

2. Policies of trade by Trump: The new policy change has impacted the globalization and free trade. The H1B visa policy and withdrawn from Trans-Pacific Partnership trade agreement has already affected the IT industry. The major employee force of Capgemini contributed from Asia-Pacific because the cost of labor in these countries is low compared to the US, which resulted in a low cost of the project. But with visa constrain the cost of the IT projects is going to increase.

Economic

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Social

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Technological

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Technological

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Legal

1. Concern about Privacy: Most important downside of digitalization is Security vulnerabilities in the IT systems. Most countries are concerned with the privacy of its citizen and coming with the law to protect the fundamental right of its citizen. The Capgemini SOC (Security Operation Center) is unpredicted solution provides integrated service with the use of data analytics to better safety against the cyber threat. Capgemini data protection system is certified by French data protection authority (CNIL). Capgemini is among a few selected groups of companies which follows the most stringent standard of transfer of personal data.

Environmental

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