United Kingdom is a world leader in the field of Information
Information technologies have had a great impact on the way in
which information is gathered and processed, but their impact on the structure
of the organizations has been rather limited.
By the end of the twentieth century, progress in information
technology (IT) had become the strongest and most pervasive force for strategic
change in businesses throughout the world.
This paper analyzes the strategic development «Computacenter, plc.»
Computacenter is Europe’s leading independent provider of IT infrastructure
Computacenter plc is the
parent company of a group of European companies which provide computer services
to public and private sector customers. Despite the spelling of the word «center»,
it is a UK company based in Hatfield, Hertfordshire.
The company is listed on the London Stock Exchange and is a
constituent of the FTSE 250 Index.
Set up by British Harvard graduates Philip Hulme and Peter Ogden
in 1981, who are both still involved in the group's management.
Computacenter today has over 10,000 employees across Europe and
Group revenues of over £2.5 billion.
The mission of the company
«To deliver IT services and solutions that enables our customers
to achieve their goals».
The strategy of the company
«Our strategy is to achieve long-term earnings growth. To help
measure our success, we have five key strategic initiatives against which to
benchmark our performance».
The main activity falls into the broad categories:
v Support and Maintenance:
Resources on Demand
v Datacentre Technology Optimisation:
Datacentre Current State
Infrastructure Discovery and
Data Classification and
Server and Storage
Server and Storage
v Commercial Solutions:
Supplier Management and
Web shop and e-Commerce
Advanced Order Management
Leasing and Technology
Capacity on Demand and
Computacenter is ISO 9001:2000 certified by the British Standards
Institution. The ISO standard provides the framework that underpins the
'Service Excellence' commitment and ethos of the organization.
Computacenter has subsidiaries in several countries: United
Kingdom, France, Germany, Belgium, Luxembourg and Netherlands, and its partner network extending its coverage to over 120 countries
The main customers include: Deutsche Bank, Logica, Marks & Spencer, British Telecom,
BAA, Reuters, Unipart, Channel 4, BMW Group, EDF.
Key metrics 2009:
Group revenue £2.50 billion (2008: £2.56 billion)
Profit before tax £54.2 million (2008: £43.1 million)
Earnings per share 27.7 pence (2008: 21.0 pence)
Group annual services contract base grew to £503.6 million,
at constant currency
There were two successful acquisitions during the year: Thesaurus
Computer Services in UK and become in Germany.
History of Computacenter
received ‘Daimler Supplier Award 2009’
contract with Cisco Enterprise Partner
receives IBM Certification for Dynamic Infrastructure Skills
services contract base grew over 9% to £503.6mln
achieved a net profit of £40mln
won contract with Marks & Spencer and BMW Group, which increased
contract base 7.5%
company won the five year contact with the largest provider of fixed
telephony in the UK «British Telecom». Contract worth £200mln
company extended their service facilities with different service desk
capabilities in Spain and South Africa through the acquisition of Digica Ltd.
business continues to grow across Europe.
company won a five year contract with Finanz Informatik GmbH & Co.
KG in Germany, which provides IT services to the banking institutions.
acquisition with GE CompuNet in Germany and GE Capital IT Solutions Austria
company won outsourcing contracts.
five-year contract with Abbey, the main point of which is to manage their
desktop infrastructure. This contract valued at £70 mln.
three-year contract with HBOS, the aim of which to manage 35,000 desktops,
launched the new Solution Centre – it was one of the first facility in the UK
to offer multi-vendor proof of concept and testing services.
company became Sun's Service Partner of the Year.
year Computacenter became 'Service Partner of the Year 2001' at the Sun
Partner Awards ceremony
won top Enterprise Accreditation. In this year Computacenter became the first
infrastructure services partner to be awarded a new Enterprise Service
Delivery Partner (ESDP) by Compaq.
awarded Computacenter its Breakthrough Partner of the Year award for 2000.
company is awarded BMC's EMEA Partner of the Year for BMC's 2001.
the acquisition with GECITS UK & French business
won the 'FMCG and Capital Goods Distributor' of the year
renewed its contract with British telecom for the next three years
Belgium was established and acquired RDC, a UK-based IT disposal services
company successfully floated on the London Stock Exchange. The leading UK
company, Proshar, awarded Computacenter as «Best Involvement and Innovation
for Employee Share Ownership» in the United Kingdom
UK revenues exceed £1 billion
company was voted European Reseller of the UK, and the most innovative
approach to customer support in Europe
achieved a UK turnover of £804,5mln with net profit of £25mln.
company staff levels have increased by 40% from 1,510 to 2,099 and supplies
over 245,000 PCs over the year in the UK.
achieved a turnover of £500 mln, and employs approx. 1500 people and
won one of the largest desktop contract with British Telecom.
France became a wholly owned subsidiary of Computacenter.
Despite a partial slow-down in the UK economy, demand for IT
systems and services remained strong in 90’s.
The Comptacenter 's success is the direct result of a strategy of
sustained high investment in the development of the services capability. The
state-of-the-art facility was intended to be the source of significant
Computacenter commercial success depends on the quality of the
service and that, in turn, depends on the quality, training, and motivation of
Computacenter continued to invest across all of its businesses,
consolidating its position as the leading supplier of distributed IT and
related services to the European corporate and public sector marketplace. During
15 years Computacenter won a number of different contracts with major players
if IT industry in Europe.
I want to point out that
there were a big number of different
acquisitions due to Computacenter became the most significant provider of IT
infrastructure products and services in the United Kingdom and in Europe. The
focus clearly was and remains on investing for growth in Computacenter existing
businesses. Much of Computacenter’s growth was due to expanding relationships
with existing long-term corporate customers. The quality of service that they
deliver to both new and existing customers is the overriding factor in the
success of the business.
Computacenter’s ability to deliver value through its entire range
of services, combined with e-commerce capability, constitutes a significant
competitive advantage. All things considered, it can be concluded that
Computacenter followed the same strategy during the 15 years. During this
period Computacenter made further progress in strategic initiatives aimed at
ensuring long-term earnings growth.
Current Strategic situation
Information technology (IT) industry has become of the most robust
industries in the world. IT, more than any other industry or economic facet,
has an increased productivity, particularly in the developed world, and
therefore is a key driver of global economic growth.
Market figures show that in Western Europe in 2009, IT
infrastructure outsourcing increased by 3 per cent and is expected to increase
by 4 per cent in 2010.
IT is one of the most rapidly evolving,
widely used, and pervasive high technologies in the world today. Understanding
the general trends in the IT industry is important when giving advice on which
technology to invest in. The invention, creation and widespread application of
IT effectively spurs the integration of hardware manufacturing with software development,
goods production with service management, and the real with virtual economy.
Although the IT industry has been faring better than others
sectors, it is by no means immune to the current downturn. See Appendix 1 worldwide
spending on IT.
analysis (Porter’s Five Forces)
Porter’s Five Forces can be used to understand how profitable a
target industry might be and to understand the forces impacting upon the
current industry’s profitability.
Appendix 2 shows us the main power of suppliers and buyers, threat
of substitute, new entrant threats and supply market rivalry. Comprehending the
forces that shape IT-industry competition is the starting point for creating
strategy. Every organization should know what the average income of its industry is and how that may change over time.
The key to growth and survival, according to Porter, is to use
your knowledge of these five forces to «stake out a position that is less
vulnerable to attack from head – to – head opponents, whether established or
new, and less vulnerable to erosion from the direction of buyers, suppliers,
and substitute goods.»
macro-environment analysis (PEST analysis)
To analyze current situation we can use PEST analysis. The PEST
analysis is a framework that strategy consultants use to scan the external-macro-environment
in which a firm operates.
PEST is an acronym for the following factors: Political, Economic,
Social, Technological. PEST factors play an important role in the value
creation opportunities of a strategy. However they are usually outside the
control of the corporation and must normally be considered as both threats and
opportunities. We should take in mind that macro-economical factors can be
differ per continent, country or even region, so normally a PEST analysis
should be performed per country.
Concerns about environmental issues
Concerns about energy utilization
The government view the IT sector as an important engine of
The market may be impacted by lower Government spending on new
Increase of Interest rates
The market is expected to remain highly competitive
Exchange rate movement
Economies of scale for the information technology industry are
Concerns about ‘disposal society’
IT user population are becoming ever more sophisticated and
demanding in their use of IT technology
Availability and quality of IT talent
Change in hardware
Broadband networks are becoming increasingly essential
advantage of Computacenter
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. According to the Competitive Advantage model of Michael Porter, a
competitive strategy takes offensive position in an industry, in order to cope
successfully with competitive forces and generate a superior Return on
In keeping with M. Porter, the basic of above-average performance
within an industry is sustainable competitive advantage. There are two basic
types of competitive advantage: cost advantage and differentiation advantage.
Cost advantage exists when the firm is able to deliver the same benefits as
competitors but at a lower cost. And this is also one of most important
competitive advantages for Computacenter.
Cost leadership is perhaps the clearest of the generic strategies.
The sources of cost advantage are varied and depend on the structure of the
industry. Computacenter drives down cost as low as possible to ensure that
price are the most attractive to their customers. And in order to achieve this
advantage, the company combines services and solutions to best practice
processes. In the other words, Computacenter helps their clients make business
sharper by removing cost, complexity and barriers, using over 25 years’ of
practical IT ‘know how’. The company is an above-average performer in its
industry, at equivalent or lower prices than its rivals.
Appendix 3 illustrates how the company positioning themselves.
Competitive advantage of Computacenter:
Delivers the right solution
for consolidation. has considerable track in delivering consolidation projects.
Can implement migration
projects at lower cost, with less risk and more quickly than competitors
Has consultants accredited
to the highest level with all major datacentre vendors such as IBM, SUN,
Oracle, HP, Redhat, SuSE, Veritas, VMware, EMC, NetApp and HDS.
Knowledge, experience of
deploying infrastructure management, skills and flexible methodology
cover all leading software and infrastructure vendors in the field of data
Direct relationships with
over 1,100 software vendors
Hold more than 200
For several years the Group’s strategy remains unchanged. The
group’s success is the direct result of a strategy founded of high investment
in the development of the services capability over a number of years. Ongoing
investment in staff reflects commitment to their goal – maintaining the
position of market leader.
Computacenter sticks strategy that is stable and flexible, and can
respond to the changing needs of the market. The company is continuing to
pursue a strategy of growth in their activities to achieve economies of scale.
A leading presence in each of the major European markets for IT
products and services, Extending presence in markets that offer greatest growth
opportunity remains a core priority of Computacenter’s strategy.
Strategic direction for the
In a world where IT is increasingly important to business success,
today’s organizations look for a trusted partner to help them realize
competitive advantage from technology. It is fact that there needs to be a good
quality product to successfully growth any product. Quality control and
customer service are important to increase sales volume to grow a company.
Based on the research and analysis in the previous chapters, I’ll
try to explore a limited range of choices available to the company for the
future. Firstly I want to consider the opportunities and threats for
v Constantly growing demand for a IT service and occurrence of new
v Development of new products and introduction of new types of
service both for constant clients, and in order to attract of the new clients
v High ability of the employees to improvement of professional
skills that allows to introduce quickly new technological decisions in a
v To investment in a programme to expand current facilities
v Extending presence in those markets that have the greatest growth
v Potential for disruptive innovation
v An inability to adapt service offerings to customers that may lead
a failure to compete
v Wrong definition of customers needs
v Compete successfully with the current off-shoring trend
v Threat of slowdown in demand from corporate customers
v Growth impairment of the market
v Occurrence in the IT market of new competitors with more favorable
conditions of service
v Falling of demand for separate types of service
Information technology industry represents both a threat and
opportunities. Take into account history development of the company and current
strategic situation we can conclude that all strategy that the company follows
is build on organization’s own capabilities. Organic development was the
primary method of strategy development.
Computacenter should continue to follow the same method of
development, because there are a lot of supporting evidence. Firstly, highly
technical products and services available for themselves. May be some
acquisitions are necessary in order to create new market opportunities.
Secondly, knowledge and capability development. And lastly, the company invests
over time, reinvesting profit into business, thereby avoiding the need for
Recommendations for the future strategic direction:
v Expanding business and increasing turnover by carrying on doing
what you are doing.
Computacenter may move to new different regions but still using
original business model. In this way growth rate is natural.
v Computacenter should selling products in new geographic areas, or
using new sales channels.
v Continue to Improve customer service
v Defending the relationships with existing customers
v Expanding the range of product offerings
v Investing in technology to assist with growth
v Expanding and optimizing the distribution network
v Improving overall efficiency
The goal of the assignment was to explore strategy of the
By considering corporate development history and current situation
strategy, it became possible to identify direction for the future. Opportunities
and threats for Computacenter have been estimated, basing on the analysis of IT-industry (using Porter’s Five Forces) and macro-environmental
analysis (using PEST framework). According
to the results of researches were given recommendations for the future
analysis strategic computacenter threat
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