Accenture SWOT and PESTLE Analysis

Strength

1. Global Delivery Model: One of the key differentiators of Accenture is its Global Delivery Model. It integrates employees and other resources from around the world. These resources include scalable, standardized processes, methods and tools, automation and artificial intelligence, industry expertise and specialized capabilities, cost advantages, foreign language fluency, proximity to clients and time zone advantages.

2. Strong workforce: Accenture has an employee base of approximately 3.84,000 people serving clients in a broad range of industries and in three geographic regions: North America, Europe and Growth Markets (Asia Pacific, Latin America, Africa, the Middle East, Russia and Turkey).

3. Leading with research and innovation: Accenture has a unique approach called the Accenture Innovation Architecture through which it combines the capabilities across the company to develop and deliver disruptive innovations.Its divisions catering to innovation are: Accenture Research,Accenture Ventures,Accenture Labs,Accenture Studios,Accenture Innovation Centers and Accenture Delivery Centers. An important indicator of their innovation capabilities is their intellectual property portfolio which includes more than 5500 patents and pending applications. Recently in September 2017, Accenture was awarded a patent for "editable blockchain." Accenture spent $643 million $626 million and $640 million in years 2016, 2015 and 2014 respectively in R&D.

4. Long term relationship with key accounts: Accenture serves more than three-quarters of the FORTUNE Global 500 and 94 of the top 100. They build strong, long-term relationships with their clients. All of their top 100 clients have been clients for at least five years, and 98 have been clients for 10 years or more.

5. Effective marketing and branding strategy: Accenture utilizes every brand touch point including print, airport, outdoor and broadcast advertising. Internal marketing includes recruitment marketing materials, client presentations, company’s website, employee communications, etc. The company also had Tiger Woods, the famous golf professional as their ambassador in the past.

Weakness

1. Organizational challenges due to the size: Accenture employed approximately 425,000 people globally as of August 2017. The size and scale present significant management and organizational challenges. It might become increasingly difficult to maintain effective standards across a large enterprise and effectively institutionalize the knowledge. It might also become more difficult to maintain the culture, effectively manage and monitor their personnel and operations and effectively communicate the core values, policies and procedures, strategies and goals. The size and scope of their operations increase the possibility that they might have employees who engage in unlawful or fraudulent activity.

2. Majorly known as a consulting firm: Even though Accenture brings together expertise from 5 areas i.e. Accenture Strategy, Accenture Consulting, Accenture Digital, Accenture Technology and Accenture operations, the consulting division acts as the major source of revenue for the firm.

3. Favors large sized projects: Accenture is trying to venture into small and medium sized projects which offer considerable revenue if undertaken in large numbers. Focusing only on large sized projects will result in loss of market share to its competitors.

Opportunity

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Threat

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References

1. Accenture Annual Report 2016: https://www.accenture.com/t20161030T213116__w__/in-en/_acnmedia/PDF-35/Accenture-2016-Shareholder-Letter10-K006.pdf#zoom=50

2. Accenture website: www.accenture.com

Political

1. Impact of Brexit on Accenture’s operations: Increase in protectionism politics has impacted the global free trade. A major portion of the Accenture’s revenue comes from United Kingdom and Brexitwill severely impact the IT business.Immediate impact is the low business visibility and economic uncertainty in the environment. The new policies in the region will significantly affect the revenues and cost of operation of Accenture. Accenture which is based in Ireland may also shift some of its overseas operations to Dublin to leverage the positive Irish business environment. The Brexit has raised the economic volatility and has led to decrease in revenue from UK operations due to sharp depreciation in GBP post the referendum.

Economic

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Social

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Technological

1. Growing trend of digitalization across industries: The penetration of digitalization is increasing as industries are transforming their operations and increasing efficiency by leveraging technology. Industries are focusing on Internet of Things (IoT) to connect their business through internet to increase the efficiency and ultimately cost optimization. Insurance, manufacturing, banks all are shifting towards digitalization. Accenture’s strong expertise in digitization and IoTwill enable it to provide a solution to these industries and drive the future growth.

2. Impact of automation on operations: Automation in IT industry will impact the business in the near future. Automation will help the companies such as Accenture to find new sources of revenue, actionable insights, reduced time to market and lower costs. Accenture is leveraging automation in its internal operations such as software testing and is also helping clients across industries such as Insurance, Financial Services, Manufacturing and others. This is helped in significant cost savings and increase in efficiency, business agility and process intelligence.

3. Acquisitions to enhance technology and domain competency: Accenture has been actively pursuing acquisitions in the technology space to enhance its technological competencies across domains such digital, cloud and security and others. Recent acquisitions in the financial services space is VERAX Solutions, a boutique Toronto-based technology and systems-integration consulting firm in August 2017. It also acquired Clearhead, a digital optimization company to strengthen its personalization services capabilities. There have been several other acquisitions completed by the company in 2017 across domains such as cloud, digital, analytics, ERP, consulting and many more.

Legal

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Environmental

1. Committed to reduction of carbon footprint and greenhouse emissions: Healthy environment help in thriving of healthy communities and Accenture is committed to environmental sustainability going beyond the compliance norms and set up new benchmarks. Accenture has also deeply invested in research and development to help its clients with strategies and solutions to improve their sustainability performance. Further in its internal operations, Accenture has help competitions across its office locations globally which is aimed at reducing energy consumptionthrough the use of smart meters. The company to reduce its carbon emissions to an average of 2.0 metric tons of CO2 per employee by 2020 from 4.04 metric tons in 2007.

References

1. Accenture Annual Report 2016: https://www.accenture.com/t20161030T213116__w__/in-en/_acnmedia/PDF-35/Accenture-2016-Shareholder-Letter10-K006.pdf#zoom=50

2. Accenture website: www.accenture.com