Tuesday, June 12, 2012

Deloitte - Internal Strategic SWOT Analysis


Deloitte Touché Tohmatsu is a global provider of audit, tax, consulting and financial services headquartered in New York City. Even though it has a strong market position across 150 countries, North America forms the company's largest geographical market and it forms around half of its total revenue every year. Deloitte's largest functional area is audit and it aims for a balanced growth in all its businesses through a multi-disciplinary approach to client service.

Levels of Strategic Management

Considering strategy in terms of levels is optimal way to distinguish among its various responsibilities involved in the strategic development and implementation. Deloitte has a corporate strategy for product diversification into new markets, business strategy for consolidation its position in existing market and functional strategy for effective implementation put forth by higher levels of management.     
               
SWOT analysis is a method for analysis of an organization’s business, resources and its environment which can help an organization to discover ways to work better than the competition and also maximize the benefits from opportunities available.       
                 
Strengths

1. Risk consulting

Deloitte's strong competitive position is one of the key reasons for its success. For example, in the year 2007 Deloitte was named by the Forrester wave as the market leader in risk consulting services. Further, strong revenue across industries decreases the firm’s exposure to business and economic cycle risk and increases its ability to manage economic downturn.
Deloitte's cleantech, Indirect tax, valuation services, forensic and dispute services generate a lot of cash and form the high growth and high share section of its businesses.

2. Human Capital Strategy
Deloitte's is very efficient in helping clients identify newer tools and methodologies including HR analytics to assess the ROI of human capital. Kennedy, one of the leading market research providers in management and IT consulting recently acknowledged Deloitte’s key role in bringing in fresh ideas by tying human capital to business strategy.

Weaknesses

1. Weak presence in outsourcing market
Even compared to its competitors KPMG and McKinsey, Deloitte position within business process outsourcing (BPO) is not within the top ten in global rankings. This means Deloitte does not benefit from the growth of the global IT services.

2. Controversies
The Deloitte had run into problems with Los Angeles Unified School District (LAUSD) due to issues in hardware and software of the payroll system project in 2004.This had led to some staff getting underpaid and it tarnished the company’s public image.

Opportunities:
1. Deloitte is one of the early adopters of the IFRS standard considering its simplified financial accounting and improved financial reporting and transparency.
2. Enterprise Risk Management services is likely to grow higher due to continued focus on enterprise management with assistance in data security, privacy needs and client data analysis.
3. Increase in spending on infrastructure in Central Europe offers Deloitte with chances to provide assistance to government in public private partnerships .

Threats

1.       More focused IT competitors which cover all aspects of IT, having strong business capability like IBM Business Services, Accenture and Capgemini threaten Deloitte’s business.
2.       Smaller audit firms which have lower valuation of auction rate securities could shift the demand away from Big Four to smaller firms like Rothstein Kass, RSM McGladrey and BDO Seidman.


Implications
Deloitte is in a strong position in business consulting but its constantly changing business leadership is creating its own challenges. This has following implications:
1.Higher investment in automation, online services and emerging business model and deliberately extend services in new areas of client needs such as sustainability consulting.
2.Implement rigorous thought leadership in marketing and develop solutions for high growth markets in Asia.
3.Internet based provider of business services may act as a future clients ,so Deloitte must closely monitor their growth. 

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