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.
References:
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