Deloitte Competitive Analysis Report

Deloitte is a global provider of audit, tax and advisory services and the world
largest provider of business and IT consulting services worldwide. We have
analyzed Deloittes business consulting operations worldwide, identifying its
strengths, weaknesses, opportunities and threats so that a proper competitive
analysis could be done for the company.
ANALYSIS
The report contains a Strength, Weakness, Opportunity and Threat (SWOT) analysis for
Deloitte and the business consulting services it delivers to the global market. We list here only
those characteristics that have the greatest potential impact on Deloittes market position and
strategy. Each characteristic is examined in terms of its potential impact on the firms market
position and is rated high, medium or low, according to its impact.
Deloitte competes in the business consulting services market, which is estimated to be worth
$34.2 billion USD in 2014 out of a total $120.3 billion. It is a highly competitive and
fragmented market in which Deloitte must differentiate itself from a variety of types of
competitors including: established management consulting brands, such as McKinsey & co,
BCG, large IT service providers such as Infosys Consulting and Tata Consulting Services.
Deloitte must also differentiate itself from immediate peers Ernst & Young, KPMG and
PricewaterhouseCoopers, the other members of so called Big-Four that have an accounting
heritage.
Firms in this market face price pressure on consulting day rates and frequent changes to
technology that affect clients business processes. They also need to deal with the threat and
opportunity offered by new technology-based delivery models, such as online advisory
services. The foundational capabilities typically do not change dramatically, but the business
and technological environment in which the clients operate is changing rapidly indeed.
Under current economic conditions, pressures on provider revenue remain high. Consultants
must update their knowledge base frequently to keep pace with evolving business and
technology needs.

THE BIG FOUR

Mergers over the past couple of decades have created the big four accounting, auditing and
consulting firms: Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. The relative
lack of disruption has been a competitive advantage of Deloitte in the consulting business, it
used the uninterrupted time to establish its intellectual capital and take a different route from
that taken by its competitor.
SWOT ANALYSIS
Deloitte, Business Consulting Services, Worldwide.

STRENGTHS

Value-driven approach
Business-led, IT-enabled approach to
engagements
Depth in vertical industries and
business processes
Ability to invest in growth
Stability and capability from audit
business
Trusted brand
Breadth
of service and skills
OPPORTUNITIES

WEAKNESSES

Brand awareness limited to only some

executives in the client enterprise
Global association structure
Relative immaturity of global delivery
capability
Under penetration into Asia
Limitation of market opportunity due to
audit

THREATS

Change in economic and business

environment
Green agenda
National infrastructure investments
and reaction to the global financial
crisis
Pattern-Based strategy
Midmarket penetration
Other high-growth sectors

More-focused competitors from IT

heritage
IT providers with business capacity
Software brands

This SWOT analysis draws on research and analysis of Deloitte in the business consulting services
market. It is a weighted summary of its Strength, Weaknesses, Opportunities and Threats. The strength
and weaknesses are internal whereas opportunities and threats are from external sources. For each
category, we define a number of characteristics based on parameters such as company or market,
business consulting services, finance, and operations and assign to each a weighting. Each
characteristic is examined in terms of the potential impact on the providers position in the market.
Our analysis identified dozens of factors, each of which could be important in particular circumstances.
Here we have mentioned just the important characteristics; we are prepared to discuss on this in detail
if any query comes up.
The main SERVICE LINES of Deloitte and its competitors are:
Consulting
1. Strategy and Operations: Strategy; finance; integration; divestiture and restructuring;
operations; supply chain; outsourcing advisory
2. Human capital: Talent / people strategy; strategic change and organization transformation;
talent,productivity and rewards; technology adoption; HR transformation; mergers and
acquisitions; actuarial, risk and analytics service
3. Enterprise applications: Customer relationship management; emerging solution; financial
services solution; Oracle; SAP; supply chain management
4. Technology integration: Business integration and optimization; information management;
performance management; platform architecture and infrastructure; system development;
technology strategy
5. Outsourcing: Application management services; business process services
Audit and enterprise risk services
1. Audit: Auditing services; global IFRS and IFRS implementation services; cross-border services;
reporting advisory services
2. Enterprise risk services / Business risk: Contract risk and compliance; corporate
responsibility and sustainability; governance; regulatory and risk strategies; internal audit
3. Enterprise risk services / Information and technology risk: Data risk services; information
and controls assurance; risk management technologies; security, privacy and resiliency;
technology risk and governance
Financial Advisory Service: forensic and dispute services; electronic discovery services;
reorganization services; valuation services; corporate financial advisory; transaction services
Tax services: Business tax consulting; compliance and reporting services; tax management consulting;
private company services; legal services; research and development and government incentives;
indirect tax; customs and global trade; global employer services; high-net worth individual and
employed wealth; international tax and transfer pricing; mergers and acquisition;
Here we mainly focus on the Threats to Deloitte
More-Focused Competitors from IT Heritage
Deloitte is to some extent vulnerable to more-focused IT services providers because it is not easy, even
at the scale of Deloitte, to cover all aspects of IT that are needed to implement its consulting advice.
For some enterprises, working with consulting providers that also provide their own technology is a
pragmatic advantage. This puts a limit on Deloittes ability to effectively control the outcome of all its
business consulting projects.
IT Providers With Business Capability
The competing brands that have successfully combined a business focus with a strong IT backgroundpredominantly IBM Global Business Services and Accenture, but also Capgemini and some others-pose
a threat to Deloittes business. In an era when no business decision can be effected without IT,
competitors with an IT heritage are not disadvantaged as they once would have been.
Software Brands
Software brands, especially SAP and Oracle at present, have a high degree of recognition and intent to
use on buyers of consulting services.

PERFORMANCE ANALYSIS 2014

Deloitte became the largest accounting firm on the planet, beating PwC on revenue terms in 2014.
Deloitte had gained this spot for the first time ever in 2010, but lost out to PwC in 2011 and 2012. In
2013, Deloittes revenues grew 3.5% from 2012 while PwCs revenue grew only 1.8%, thus Deloittes
revenues exceeded PwCs by $311 million in 2013 compared to a deficit of $200 million in 2012. In
2014, Deloittes revenues grew 5.7% from 2013 while PwCs revenue grew slightly faster at 5.8%, but
Deloittes revenues still exceeded PwCs by $248 million in 2014 compared to a lead of $311 million in
2013.
2014 saw good acquisition activity by the Big Four firms in the Advisory space. Notably, Deloitte made
20 acquisitions,
Including Platon Group, Urgentis Digital Crisis Solutions, McColl Partners, Banyan Branch, NXG Business
Solutions, The Brief Group, MN Security and Vigilant. PwC finally bought and consolidated Booz. KPMG
bought SAFIRA, Cynergy, Quebera and Rothstein Kass, while EY bought Parthenon and Thomson
Reuters Tax Preparation and
Court Accounting Outsourcing business.
GROWTH STARS
We have highlighted the firms who have achieved the highest growth rate in revenues from 2013 to
2014 in local currency terms as the growth stars in 2014.
Audit
EY Audit 4.5%
Tax
PwC Tax 8.0%

Advisory
EY Advisory 12.3%
Americas
KPMG Americas 10.1%

Global: EY 6.8%
KEY HIGHLIGHTS
PwC
Largest Audit, Tax, Europe and Asia practices
Fastest growth in Tax and Asia
Deloitte
Overall revenue leader
Fifth consecutive year of positive revenue growth
Largest Americas and Advisory practices
Fastest growth in Europe
EY
Fastest growth in Audit, Advisory and total firm
Fastest overall growth in 2014
KPMG

Europe
Deloitte Europe 5.8%
Asia Pacific
PwC Asia 7.7%

Fastest growth in Americas

Highest acceleration in growth from 2013 to 2014

CONCLUSION
The 2007 to 2009 recession has been the worlds worst financial crisis for over 70 yrs., and despite such turbulence,
the Big Four firms turned in quite a creditable
Performance, this makes the completion for Deloitte much more tuff as it is expected to sustain its growth along with
the other big 4s. Since March 2009, global financial markets had a marked improvement in equity values, and general
business conditions are in much better shape in December 2014.
Implication of Deloitte
Deloitte is in a strong position in the business consulting market. But, nothing stands still. We recognize Deloitte is firm
whose leadership is constantly challenging its own assumption and its business model. It should actively continue the
following: Invest, experiment and innovate the areas of automation, online services, emerging business models and
offshore labor.
Apply thought leadership marketing, and manage it more rigorously.
Deliberately extend the capability and the brand into new areas of client need, such as sustainability
consulting, while avoiding overextension.
It should take these steps to secure future:1. Work on appropriate level of global integration of the consulting business that is compatible with current global
structure.
2. Carefully extend the relevance and awareness of the brand among more non finance executives.
3. Closely monitor the internet based providers of business services (and consumer services and digital
content): They may act as substitutes or competitors for some services, but they are also potentially among
the largest prospective clients.
4. Develop local services and solutions for the high-growth markets of Asia.

What to Look for in 2015 and Beyond

Beyond 2015, we do see several years of anticipated solid growth with general global improvement and
large scope and size for Deloitte as well as its competitors. 2015 will be an interesting year to watch for
any changes in Big Four rankings: whether Deloitte will be able to maintain its lead over PwC, whether
EY can continue its strong growth streak and increase its gap against KPMG; and whether Americas can
maintain their top position among the regions. Further, we analyze the impact of the recently
appreciating US dollar on growth rates. More so, the impact of the recent slowdown in Eurozone on
Europe growth will be monitored.

References
The 2014 Big Four Firm Performance Analysis

www.Big4.com
SWOT: Deloitte, Business Consulting Services, Worldwide

Gartner for Business Leaders Research Note G00175106, Rolf Jester, Jacqueline Heng,
Michael von Uechtritz, 14 May 2010, V2 RA4 05202011