Executive Summary The IT Technology industry is the fastest developing industry in the world, and it has an outstanding contribution on the Asian market economy growth, Infosys is one of the pioneer Indian companies that positioned the Indian firms on a leading position globally, the company generated revenue of US$ 2 billion in 2006 (Rustogi et al, 2012), and gain more than two third of its revenues from serving many clients in the United states (Dajiworld, 2007), the company success to develop scalable strategy, and create a successful organization has a global brand awareness for quality and efficiency . The report illustrate Infosys expansions plans and strategies in China and summarizing the factors influenced Infosys to establish offshore development center in China, to benefit from the advantages of the low labor cost and the great economic opportunities to have the largest second development center in China, as well analyze the Global Delivery Model of Infosys and its relevance to China, in addition to indentify the major challenges face the Indian IT companies operating in China, and propose solutions to conquer those problems.

Table of Contents
Background 5
Issue Statemnt 5
Literateur : Factors influenced global expansion strategy 5
Analysis of the problem : Global Delivery Model of Infosys 6
Alternatives Analysis and Selection Criteria : Development Challenges in China 7
Recommendations 9
Action and Implementation Plan 10
References 12-15
Appendix 16

List of Tables and Figures
Table 1 –Infosys Ranking. 17
Table 2 – Infosys SWOT analysis 18

Background Infosys Technologies Limited is IT Solution company founded by Indian software professionals since 1981), they are specialized in IT consultancy, maintenance, engineering, engineering of products, and system integrations, that employs more than 72,000 worker in different countries (Narus & Seshadri, 2007), and they success to strengthen the recognition of their brand, meantime they faced strong competition to wear down its market share, therefore they implement a new Global growth strategy by managing virtual cooperation based in different geographical locations in order to reduce the cost, increase efficiency and maximize profits (Mehta et al, 2007), in 2004, Infosys develops offshore enterprise in China which match their growth plan of low cost center, pool of talented manpower.
Statement
The main aim of this study is to explore and investigate the risks and opportunities that Infosys will face in their acquisition and expansion plan in China and discuss the global delivery model set up in order to meet the clients, in addition to identify the solution to overcome the obstacles to achieve the company success objectives.
Factors influenced global expansion strategy China is one of the well known socialism countries moves to open more market based systems, as its government encourage capitalism and support companies afford new business opportunities for their skilled and low cost labors (Cullen & Parboteeah, 2009), since China known for its labor efficiency, as their productivity are higher than Indian labor by a round 50%,meantime India’s capital performance is higher than Chin’s by 30% (Master Card, 2005)
Liberalization increased the competition set of Infosys, as they increased the level of salaries of the Indian labors that encourage the company to find out a new labor source at lower cost, which is available in China labor market, as the software labor cost is far less than India, also the quality of workers as same as the Indian professionals working on software, the shortage of Indian manpower encourage the Infosys to look for alternative market that have the manpower capabilities to achieve their global expansion, as well it was essential for Infosys to expand their business platform and provide services to the business of the US clients located in China, and expand their business opportunities through admitting similar model of their business in US.
Global Delivery Model of Infosys The globalization and the revolution of the technology consultancy industry during the last decade encourage many consultancy corporations to start to cope with the market changes by redesigning, adjusting, and implementing new strategies using IT to provide clients efficient services at economical prices, therefore Infosys start to provide new services of developed application as well essential IT infrastructure (Lampel et al, 2010), as the firms provide the services cross a global system on different offshore locations at cheap cost and vendors shift the services from their main location to another developing areas such as India or China and this is defines as Global Delivery Model (GDM), which is an innovated business process to enhance business efficiency, rapid time cycle (Quinnand & Hilmer, 1994), and better quality, that delivered by outsource from a distant site to the globe (Wolcott & Lippitz, 2010). Infosys gains numerous advantages of implementing the global delivery model, as it boosts the firm greater flexibility (McCarthy & Anagnostou, 2003), possibility to transmit resources to the strategic core of activities, and this permit the firm to concentrate all its resources on core competencies knowledge, so as to develop its capabilities which will be a competitive edge (Quinn & Hilmer, 1994); competitive low cost talents, therefore they choose china for their offshore center, which enjoy an excellent reputation for its skilled labor force as they have well trained employees that speaks fairly English at lower cost than Europe and United States, as well application retirement saving costs (Chandrasekaran & Ensing, 2004), as well the possibility to take on any technology changes quickly due to their high skilled and trained employees that they have the ability for any adaptation, in addition to the innovation and quality improvement which can be a source for new demands (Kakabadse & Kakabadse, 2000). Also, the Global Delivery Mode enabled Infosys to reduce their projects completing cost, as well complete it in less time, as they divided the project into units in completed in different sites, enhance the quality of Infosys network as each project work separately on same standard and can support each other and back up other projects, also the scalability is a significant advantage that support the employees to respond to the client’s needs (Mehta et al, 2007), moreover the Infosys enabled to operate its business efficiently on a work cycle of 24 hours as a benefit of different time zones across the world.
Development Challenges in China Infosys' main concern is to intensification of its global delivery model across, Central, Western Europe, North America, and Asia, in order to progresses its application services, therefore they approached China as a new market and they successes to achieve outstanding results, although analysis’s predicting that Infosys could face many challenges, which may affect their future performance, like the infrastructure, political changes, business continuity, and cultural differences, in site stumped knowledge, asymmetries, as well loss opportunities in knowledge creativity (Oshri, Kotlarsky, & Willcocks, 2009), nowadays the political risk is one of the major concerns for any investor that may affect its profitability and future progress, the political risk term defined as any polices or actions take place by the society or the government of foreign host country that may affect the company profitability and continuality (Cullen & Parboteeah, 2009), in fact China suffer of dislocation of millions of population which may affect the investments due to anger of public because of land distribution, gaps of wealth enlarging, as well industrial problems that can disclose social turmoil, and laws variance from a Chinese region to another region . Infosys management believes that the workforce is the major element for their global future success, and they insist to select their workforce and structure their organization based on experience, knowledge, education, and skill that improve their productivity, and compensation (Becker, 1993), nevertheless that the Chinese educational system is not sufficient to graduate skilled students to meet the labor market needs (Taylor, 2008), therefore Infosys faced a challenge to hire skilled and experienced employees in China, as retain and attract talented labor is become a difficult aspect in China (Farrell & Grant, 2005), meanwhile the changes in the labor market and increase demand for talented managers augmented the labor cost tremendously during the last years (Gupta, & Wang, 2009), especially for the talented English speakers engineers, as the labor majority have English difficulties. Nowadays, many IT technological multinational firms located in China like Infosys, TCS system, and Wirpo face the increase of attrition rates among Chinese talented workforce to originate domestic business centers (Orr, & Roth, 2012), and normally the turnover reasons are varied, but it can be induced by promotion opportunity, higher salary, Monotonous work, and work pressure (Gu, & Xie. 2007), as well cultural diversity in China is critical aspect due to conflicts of different ideologies between new socialism, communist, and past incent (Granrose et al., 2000), which is identified into four elements like communication, back cultural shock , future contingencies and differences of cultural (Shi, & Chen, 2009), that may affect the employees manners and attitudes, accordingly impact negatively or positively on the organization performance. Foreigner firms invest in China or in any foreigner country will face a domestic competition with local companies enjoys lower operating cost (Zaheer, 1995), as well familiarize with cultural, political and social transactions, besides their benefit from different governmental and taxation treatment (Dunning, 1993), which grant many advantages for them that foster its growth and success, also Infosys will face a psychological obstacle presented on high piracy rates of 92% (Batson, 2006), and it is expected to be decreased due to governmental legalization for original software usage, finally Infosys may face a business conflict with Chinese companies due to competition and cultural differences.
Recommendations
Foreign firms like Infosys have to utilize absorption strategies to moderate the adverse consequences and challenges of any political, cultural and social differences of the hosting country (Ring et al, 1990), Although the political risk is one of the hardest challenges that Infosys could face meantime there are many solutions to manage this obstacle by obtaining insurance program for political risk against violence, risks of expropriation , and inconvertibility risk of foreign currencies (Cullen & Parboteeah, 2009), also innovating emergency plans to encounter any social unrest, natural disasters , and health crises (Bremmer & Zakaria, 2006), nowadays the awareness increase of sustainability and risk management, and the business growth led towards necessity for socially responsibility (Welford, 2004; Owen, 2005), therefore foreigner investors have to build a strong relationship with the hosting country government and society, in order to release any barriers, throughout social responsibility actions. As a result the beneficial of the company activities will be more liable and positive toward the firm and its products (Lee & Shin, 2010), and this will contribute significantly on the society actions and loyalty to the company (Aqueveque, 2005). Infosys has to work for business diversification by shifting their business activities into separate units that match the laws of each area in china and spread the risk (Bremmer & Zakaria, 2006), and also Infosys must set strategies to face the high labor turnover by analyze the market income levels and affording reasonable attractive salaries to decrease the turn over as the income level considered one of the major influencer for labor turnover, as well interior social support, creating career development plans (Gu & Xie, 2007), it is essential to Infosys to solve cultural conflicts by recognize, analyze cultural differences , and adapt the company standards and roles to match the Chinese culture and admit trainings of cross cultural for all management levels and create organizational culture integrated with the Chinese cultural (Yue, 2008).
Action and Implementation Plan In order to decrease the political risks the Infosys must implement different strategies and plans to meet any political, social, environmental issues by employ IT usage facilities to let their employees work from home in case of any public disaster, as well schedule working shifts to eliminate work concentration, effectively train Chinese staff to replace foreigners employees in case of any evacuations (Bremmer & Zakaria, 2006), Also it must enhance its social role toward the Chinese society without hurting their culture as any action or words touch their cultural ethics will be a target for the Chinese hate (Amine, 2008), as well Infosys must creates partnership agreement with Chinese universities to influences the future employment and investing on trainings for local workers and language courses to improve their communication skills and implementing offshore trainings for high qualified employees (Raatikainen, 2003), in addition Infosys must set cultural adaption strategy to reduce any conflicts that can affect the business performance (Walsham, 2002), the only solution for Infosys to beat domestic competition in China is to employ the managerial ties which are significant force of outstanding function performance (Peng & Luo, 2000), therefore it is important to employee local experienced Chinese employees in PR and governmental affairs to facilitate the communication and increase the firm strength (Chitakornkijsil, 2010), additionally it must afford reasonable pricing formula that fit the Indian and Chinese clients In order to decrease the piracy rates (Boudreau, 2005), and admitting new intelligence hardware that can protect their software from misuse.

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