COMPANY PROFILE -Deloitte
Business Sector :Professional Services
Operating Geography :United Kingdom, Europe, Global
About Deloitte :
“Deloitte” is the brand under Deloitte Touche Tohmatsu Limited, a UK private limited company by guarantee (“DTTL”). There are tens of thousands of dedicated professionals in Deloitte firms throughout the world who provide services in audit, consulting, financial advisory, risk management, tax and related services to their specific geographic locations forming the largest global professional services network. Deloitte, headquartered in London, UK, is the global leader and known as one of the “Big Four” companies, the others being PWC, KPMG, and EY. The Corporation started with William Welch Deloitte opened an office in London in 1845. He became the first person to be appointed an independent auditor of a public company, titled the Great Western Railway. IN 1880 Deloitte set up an office in New York. Deloitte works across more than 20 industry verticals to deliver tangible lasting solutions. With more than 150 years of experience, this UK based, multinational professional services network has grown in scale and diversity—employing 245,000 people in 150 countries and territories as of early 2018. Deloitte stood as the 4th largest privately owned company in the United States, in 2017.
Deloitte’s USP or unique selling proposition lies in being the largest professional services network in the world by revenue and number of professionals and in being one of the “Big Four” accounting organizations of the globe. Deloitte’s vision statement reads “Our vision and strategy, developed in collaboration with leadership and member firm partners from around the world, focuses on working together As One across geographic, functional, and business borders to deliver excellence in all of the services provided by the member firms.” Deloitte’s mission statement reads “To help clients and people excel. The DTT member firms' size, strength and resources will help carry out its' mission now and in the future. DTT is driven to be recognized as the best professional services firm in the world.”
Deloitte Revenue :
$38.8 Billion – FY ending 31st May 2017 (y-o-y growth of 5.5%)
$36.8 Billion – FY ending 31st May 2016
Competitive Analysis of Deloitte
The SWOT / TOWS analysis of Deloitte is a structure to assess the internal strategic and external strategic factors that influence the company's micro and macro environment. The SWOT analysis is a beneficial technique to examine the strength, weakness, opportunity, and threats along with their influence on the current business model of the Deloitte group. Deloitte, PricewaterhouseCoopers(PwC), Ernst & Young(EY), and KPMG are termed as the ‘The Big four’- the biggest four professional service networks, rendering services like audit, advisory, taxation, assurance consulting, management, finance and legal services etc., around the world. Amongst these top 4 networks, Deloitte secures the number one position in terms of revenue and employee strength. Deloitte houses top-notch expertise in providing services like audit, consulting, enterprise risk, financial advisory, and tax. Some of the key strengths of the company are its huge client database, eminent market share in auditing and consulting, holding #1 rank in global consulting and management and radiating a powerful brand presence. Controversies, legal concerns, business associated disputes, low market share in emerging markets, high competition from local firms are some of the key weaknesses damaging the Deloitte brand reputation.
A recent controversy in 2017, about the encroachment of hackers into Deloitte’s database stealing the confidential information of clients, has dented Deloitte’s brand reputation. However, authorities have clarified that no confidential information was compromised. Apart from tough competition from small and large consultancies in emerging markets, security of confidential information at stake, is a major threat to Deloitte. However, there are several good opportunities in the macro environment of Deloitte viz., acquisition and alliances with new and smaller consulting firms, exploring the emerging markets, and looking forward to being a part of the global financial service sector etc.
The SWOT/TOWS analysis of Deloitte is essayed below in a SWOT Matrix followed by the detailed analysis.
|1. Best for consulting and advisory|
2. Heralding Industry 4.0
3. Extensive global presence with several maven clients
4. Robust growth of Deloitte Digital
|1. Weak revenues from Emerging markets|
|1. Exploring emerging markets|
2. Audit and Tax compliance of the future
3. Expanding market for “People-predicting analytics”
4. Consulting start-ups
5. Acquisition of small growing firms
|1. Tough competition
2. Small and medium consultancies in emerging markets
3. Many legal issues and lawsuits harming the brand image
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Detailed SWOT Analysis of Deloitte
1. Best for consulting and advisory: Deloitte assists clients by providing services in the areas of strategy & operations, technology integration, human capital, enterprise applications and short-term outsourcing. In 2017, consulting accounted for Deloitte’s 37% of worldwide revenue share earning $14.3 billion of the revenue pie. Consulting revenue grew at 10.2 percent, due to the urgency of clients to accelerate their business model transformation in disrupted markets, and by Deloitte’s growing momentum through alliances, strategic acquisitions and investments in areas such as robotics, creative digital consulting, cognitive, artificial intelligence, the blockchain, cloud computing, and IOT. Deloitte’s audit market share of the FTSE 100 stood at 27% and it served 82% of the Fortune Global 500 Companies in 2017. The Company signed external audit reports for 15500 entities.
2. Heralding Industry 4.0: Industry 4.0 is a name for the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the IoT, cloud, and cognitive computing. Now Deloitte is coming up with “SMART” strategies and solutions. Their new offerings are making them the first choice in the industry be it the rolling out of MSC for ME, Smart Columbus Operating System, iDeal and DeloitteSmartReports.com. Mergers and acquisitions (M&A) due diligence was due for an upgrade, and iDeal made it happen. Introduced in FY2017, iDeal is an integrated system of analytics, tools, and approaches that extract deeper, more meaningful insights from a target’s M&A data and provides real-time answers and analyses. Also, Spotlight Analytics tool, powerful yet simple to use technology allows the auditors to perform their tasks smoothly. It analyzed and tested 3.1 billion audit journals, including 2.8 billion in 2017 alone. Spotlight’s unique digital relationship allows it to perform audit procedures throughout the year providing exceptions and insights for the management to follow up, on a monthly basis, thus bringing issues to light at an early stage and minimizing the seasonality. iNostix by Deloitte, delivers a range of services in people analytics, including the use of algorithms that can predict the success of new hires, the performance of existing talent, and employee turnover. With these new products and services, smart and rapid reporting Deloitte is the global leader in strategy consulting.
3. Extensive global presence with several maven clients:Deloitte has the largest number of clients amongst FTSE 250 companies in the UK. Deloitte is present in 150 countries with a workforce of 263,900. 82% of the Fortune Global 500 companies are served by Deloitte. Deloitte has worked with iconic companies to form alliances in order to help the physical-to-digital divide. For instance, Deloitte teamed with McLaren Applied Technologies, which is a pioneer in collecting data through sensors and using them to win automotive races, to draw upon their engineering, sensor, simulation and analytics experience to benefit clients. In FY 2017, Apple and Deloitte Consulting LLP (US) collaborated joined forces to develop a new suite of services called EnterpriseNext, which consists of tools and workshops designed to speed up the process of ideation, prototyping and evaluating mobile opportunities for iPhone® and iPad®. Deloitte has had the opportunity and capability to work with the world’s most admired brands and according to Gartner, it grabs number one spot by market share in consulting whereas Kennedy Consulting Research and Advisory places Deloitte in number one position in both global consulting and management consulting based on aggregate revenue for four years in a row
4. Robust growth of Deloitte Digital: Deloitte Digital marries leading digital and creative capabilities with deep industry insights and experience. It was born out of was born out of years of investment in emerging technologies, creative, commerce, web, mobile, and customer solutions. Deloitte is helping transform the digital journey for several of its clients by offering services like digital strategy, digital marketing, customer engagement solutions, enterprise digital engagement, digital agency. It has seen steady growth in revenues since 2014 clocking close to 20% growth annually.
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1. Tough competition: PwC, EY, and KPMG are giving head-on competition to Deloitte and PWC is already acing this race as the best auditing firm in the world. Also, financial advisory and auditing cannot be done by the same company, so other competitors are using these opportunity to grow their market. In the audit, PwC is the global leader and Deloitte comes in fourth position. In Tax consultancy, EY is the global leader and Deloitte again stands fourth here. But in the advisory field, Deloitte has a strong footing and is considered the global leader. With respect to revenue generation, Deloitte generated $38.8 billion USD which is followed by PWC with $37.7 Billion USD.
2. Small and medium consultancies in emerging markets: According to Forbes around 40% of world revenue growth will be accounted for in India and China. The small and medium-sized consultancies are providing good service at a lower cost. Such as, in India, the big four’s (PwC, EY, Deloitte and KPMG) market share is 45-50%. Here the small and medium-sized consultancies dominate the market as they offer services at much more economic and affordable rates.
3. Many legal issues and lawsuits harming the brand image: History of legal battles with Adelphia Communications, Canadian Bar Association, Livent, Standard Chartered, and Australian Tobacco Industry are damaging the brand value of Deloitte. Deloitte had suffered a cyber-attack in Sep 2017. The hackers gained access to Deloitte’s clients and staffs private data which included usernames, passwords, IP addresses, architectural diagrams for businesses and health information. Reportedly, Deloitte had stored the affected data without two-step verification in Microsoft's Azure cloud hosting service. These lawsuits have significantly tarnished clientele trust and tarnished Deloitte’s brand image.
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
• External analysis giving insights into Deloitte's opportunity and threats.
• Utilizing the 2X2 matrices called the SWOT Matrix and PESTLE Matrix, the report explores the major internal and external factors influencing Deloitte.
• Deloitte Pestle analysis provides a detailed picture of the external factors and its influence on the company’s macro environment.
• A detailed interpretation of how influencers like political, economic, social, technological, legal and environmental factors have impacted Deloitte’s innovative business model.
• Understanding of how Deloitte has leveraged the strength of technology to keep itself ahead of its competitors.
• Factors and trends affecting the professional service industry at large and its impact on Deloitte’s business model.
• A concise overview of Deloitte’s history, founders, its corporate headquarters, owners & stakeholders and revenue jumps.
• Overall company analysis to gain acquaintance about company information, company profile and number of employees.
• Deloitte’s strategy analysis, which includes both business and marketing strategy.
• Interpretation of Deloitte’s USP or unique selling proposition, mission statement and vision statement.
• Lists Deloitte’s major competitors, brands and key business segments and talks in details about its diversification>
• Insights into acquisitions and mergers, strategic joint ventures and partnerships that Deloitte commissioned in the last decade, deal valuations and how they contributed to the growth of the organization.
• Summarization of Deloitte’s business model, along with further investigation of key business segments and business case study.
• A peek into the Deloitte’s key performance indicators, success factors, value proposition and core competencies.
References used in Deloitte Analysis Report
Copyrights and Disclaimer
Deloitte SWOT and PESTLE analysis has been conducted by Saurav Mondal and reviewed by senior analysts from Barakaat Consulting.