Internal and External Environment Analysis of Deloitte

This report covers the internal and external environment analysis of Deloitte, including SWOT and PESTLE analysis. It also includes a risk assessment with the identification of risks and an action plan showing how these risks can be managed. The report provides insights into how Deloitte manages its risks and implements preventive measures.

Business Environment
BAM 4009
Assessment 2
Individual Report

Table of Contents
Business Environment.....................................................................................................................1
Introduction .....................................................................................................................................3
Internal environment analysis of Deloitte...................................................................................4
External environment analysis of Deloitte..................................................................................6
Risk assessment with the identification of risks and action plan showing how these risks can
be managed in context to Deloitte.............................................................................................8
Action plan to mitigate the risk...................................................................................................9
Conclusion ....................................................................................................................................11
REFERENCES..............................................................................................................................13

Introduction
Business environment is the sum total of all internal and external factors such as
employees, customer desires, demand and supply, innovation in technology, government policies
and others which influence the operations of an organization. For this report Deloitte is the
chosen organization. It is an international professional services network headquartered in
London, UK founded by William Welch Deloitte in 1845. It provides management consulting,
risk advisory, financial advisory and other services worldwide. It serves in more than 100
locations including Honk Kong, China and India and its target market is urban businesses and
corporate organizations. In this report, SWOT and PESTLE analysis of Deloitte is covered and a
risk assessment is taken to identify how the company manages its risks through risk management
process and tools.
Internal environment analysis of Deloitte
SWOT analysis and VRIO analysis of Deloitte has been covered in this part. SWOT is
the analysis of company's strength, weakness, opportunity and threats. SWOT analysis enables
the company to standardize its business and performance in contrast to its competitors. VRIO is
the analysis that helps the company to identify the resources and advantages. It stands for value,
rarity, inimitable and organization.
SWOT analysis for Deloitte is below:
 Strength: It represents at what the company is well and unique than its competitors.
Deloitte has been a popular reach to its clients as it has business-led and IT enabled. It
has been providing various kinds of services worldwide and expert in audit having over
1,90,000 employees. It is among the Big Four professional services organization which is
the greatest strength of the company(Teoli, Sanvictores and An, 2019).
 Weakness: It shows the deficiencies of the company compared to its competitors which
could be improved by the firm. Deloitte has less market share growth as there is very
tough competition in the market. There are various legal issues and work related
conflicts that has spoilt the reputation of Deloitte brands. It ached by an E-mail hack
which broke the trust of its clients.
 Opportunity: It represents what another options are available for the company in the
market and what advantages could the company could take. Deloitte can help in global

financial services as it is expert in finance and audit. As it serves various products or
services and has many customers, it could proceed in to mid-market businesses. It could
acquire small firms to expand its business.
 Threats: It shows the weaknesses which could expose the company either if the
company is not performing well or its competitors are doing much better. There are
strong competitors of Deloitte in market which reducing the market share of the company
and the fluctuation in the currency is influencing the internal projects of the company.
There are some new start ups in the market which may be a threat for the company and
many firms are establishing their own knowledge centres that can reduce the business of
consulting firms.
VRIO analysis of Deloitte is below:
Resources Value Rare Inimitable Organized
Financial
resources
Yes Yes No Yes
Local food Yes No Yes Yes
Employees Yes Yes Yes Yes
Distribution
network
Yes Yes No Yes
 Value: The financial resources of the Deloitte are used to invest at right places
strategically. This will help the company into external opportunities. Local food in the
company is highly differentiated. The employees of the company are well trained and are
more productive for the organization and the distribution channel allows the company to
approach more customer. Hence, these all are highly valuable for the company.
 Rare: Deloitte posses the strong financial resources. The employees of the firm are well
trained and are highly skilled than the employees in other field and the distribution
channel of the company is better than other companies. Hence, these are rare for the
company. But, the local food is not rare as it can be easily provided by the other
competitors in the market.
 Imitable: Local food can be easily imitate as it can be acquired by competitors and it is
also temporary in competitive advantage. Employees can also be easily imitate as other

firms too train their employees well to improve their skills and they can also hire
employees from Deloitte. Financial resources and distribution channels are not easily
imitable as these has been developed through prolonged profits and the competitors can
too acquire long time.
 Organized: Local food, employees, financial resource and distribution channel all are
well organized in Deloitte.
From the above analysis it can be analysed that Deloitte could make better decisions using its
strengths. It could make a proper planning to overcome its weaknesses. Through the use of
opportunities it could be more competitive to other firms and it could plan something new and
innovative to avoid threats.
External environment analysis of Deloitte
PESTLE analysis of Deloitte has been covered in this part. It is the analysis of the impact
of external factors such as: political, economical, social, technological, legal and environmental
on the company.
 Political: Factors which are influenced by government policies and actions. Deloitte is
supported in growth and development as the government is stable. It also allows the
company to expand its business regionally as well as internationally. As the rules and
regulations of the government are stable, company need not to change its own rules and
regulations again and again. Tax policies are also in favour to the company which could
be the reason of its growth. Trade blocks lowers the resource cost and increase the supply
of talented people which could facilitate its business.
 Economical: Factors that are influenced by economic climate, interest rates consumer
debts and others. Deloitte needs a moderate inflation rate it will help the company to
grow. Moderate interest rate will help the company to take a business loan. Business loan
would be used for the purpose of growth and development. Lower to moderate interest
rates enables personal loans that will transfer in to higher purchases and use by
customers. This will the company leading to boost the sales(HIREMATH, 2021).
 Social: Society is important culture and lifestyle of individuals which can influence their
engagement with products and services. It includes demographics, consumer buying
patterns, religion and ethics. As the young population is at higher range, it will allow the
company to have strong consumer base. Apart from this, younger population will also

enable the company to have well educated and highly skilled workers. Increasing health
consciousness led the company to make collaborations and take CSR initiatives.
 Technological: Innovation in technology may influence the market and the consumer
choices and purchasing power which may also affect the some industries. Due to
advancement in technology, Deloitte is incorporating technological upgrade and
innovation to enhance the efficiency of the business. The company uses high internet
penetration to approach customers for marketing and promotion. Through the use of
social media the company can make more connections and gather more information about
the customers
 Legal: These are the policies and regulations of an industry which can effect the
environment of the company. Employment laws, environmental regulations, consumer
protection, etc. are included under it. Deloitte have to regularly check on the health and
safety of employees due to health and safety law. HR department of the company
conducts trainings and workshops regularly to engage the employees with them and with
each other. The company also follows anti-discrimination law at all levels from employee
recruitment to promotion.
 Environmental: The factors influenced by external environment such as: climate,
weather, location and others. Deloitte launched its own recycling sites for the disposal of
its waste. Deloitte is increasing the use of solar energy and hydroplanes for the purpose of
operations. The company has also a controlled hydro plant to help in manufacturing
operations. Deloitte regularly engages in environmental friendly CSR activities. It also
introduced a green product line and is planning to weight up green product line gradually
to increase its role in environment sustainability.
From the above analysis it can be evaluated that Deloitte can earn more profit due to government
stability. It could grow economically by expanding its business through business loans with low
to medium interest. It could hire the freshers who are well educated and can understand the
company's work easily. The company can reach more customers with the development in the
technology. It follows all the laws to run the organization smoothly and it often engages its
employees in CSR activities and planning to grow in green product line for environment
sustainability.

Risk assessment with the identification of risks and action plan showing how these risks can be
managed in context to Deloitte
Risk assessment is the process of identify the major threats and analysing the reason of
such threats. It is carried out with the purpose to improve working conditions of an organization.
It could be carried out from identifying the threat or hazard through deciding the reason for such
hazard then evaluating the risks and deciding how they ca be controlled including the proper
record of the findings and review the assessment.
Risks associated with Deloitte
 Operational risk: All the risks associated with external factors such as political,
environmental and others are included under this. Deloitte's operations could be affected
by these risks in various ways. The company may suffer if the rules and regulations of
government changes. It may face problems if there is increment in the fluctuation of
currency. It may become less competitive if it would not upgrade with technology.
 Cyber risk: These are associated with with the risks that are related to internet
connection. As everybody is aware, the world becomes more connected and hence the
risk for cyber is increasing as the firm is growing in new directions. As Deloitte is giving
services to various people, it may face risks related to cyber as it had already been faced
by suffering email hacking(Matias, Goncalves, and et. al., 2020).
 Strategic and reputation risk: Strategic risk are those which are occurred by the internal
factors of any company. Reputational risks are those which impact the image of the
company in various ways either due to bad quality or delivering of wrong product or
service or it may fail to meet the expectations of its stakeholders. Deloitte may face these
risks if it fails to fulfil the desires of its customers or if any other competitor leads to
produce products which are better from Deloitte. The company had already been suffered
with reputation risk as it was commissioned by tobacco company to roll up on illegal
tobacco.
Risk management process
It is the process of identifying, analysing responding to the risk factors of a business
organization. Following are the steps of this process in which Deloitte manages its risk factors:
 Identifying the existing risk: To identify the risk is an important step. Deloitte takes a
meeting so that each individual of the organization gather at a place so the company can

review all the factors which may cause any kind of risk. It is the tough step as sometimes
it becomes difficult to identify a risk and it may be harmful for the operations of business.
 Assess the risk: In this step, Deloitte finds out the nature of risk that how much harm it
can cause to the business. It is also a tough step as its hard to identify the nature of any
type of risk as risk factors may be occur in various form.
 Develop an appropriate response: After the identification of risk and its nature the next
step is to make a favourable response accordingly. Example: If Deloitte identifies an
operational risk such as political risk then the company will avoid investment or dealing
with that country which is facing political risk. It is facing an economical risk due to any
reason such as shifting of customers, then it will accordingly plan how to keep the
customers connected with the company(Lin, Shen, Zhou, A. and Xu, 2021).
 Develop a preventive mechanism: It is the implementation of policies and procedure that
helps in avoiding or minimizing risks. In this step a company plans to resolve the risk. It
develops various methods to avoid future risks also. Deloitte use technological process
process to resolve its risk factors.
Risk assessment tools
 Risk matrix: It is a tool used to define the level of risk by estimating probability of cause
of risk and how it will impact to the organization.
 Decision tree: It is the flowchart showing decisions and decision making. It is a type of
machine learning which predicts how to answer the questions.
 Failure modes: It is a proactive method used to evaluate a process to identify where and
how it might going to fail(Tabatabaee, Mahdiyar and Ismail, 2021).
 Effect analysis: It is a tool which is used to identify and reduce failures within a process.
It also identifies the impact of that failure and its cause.
Action plan to mitigate the risk
Risk Cause Effect Strategy Action Responsible persons
Operational
Risk
Caused due
to failure in
any process
policy,
Disrupt
business
operations.
Control After
identification of
risk, the
company
Senior management is
responsible for the
management of such
risks.

system or
event.
measures how
much it is
impacting the
operations of
company then
controls over it.
The company
continuously
keep monitoring
to determine
whether it is
resolved or is
there any
problem with it.
Cyber Risk As cyber
crimes such
as hacking,
data leakage
and others
are
increasing,
the risk for
cyber risk is
increasing
accordingly.
It can cause
electrical
blackouts,
loss of
national
security
secrets and
many more.
Control After
identification of
this risk the
company
physically
controls using
security guards
and surveillance
cameras and
technically
controls
including
firewalls
authentication.
Everyone is
responsible for the
management of cyber
risk from IT to HR.
Strategic
and
Strategic risk
occurs due to
These kind of
risk have
Control After identifying
this risk the
CEO of the company
is responsible for the

Reputation
Risk
competition,
compliance
and more.
Reputational
risk occurs
due to
breakage of
the
expectations
of
stakeholders.
severe effects
that affect a
organization.
It can disrupt
the ability of a
business to
achieve goals.
Reputation
risk may
result in the
liquidity risk,
affecting
stock price
and market
capitalization.
company take
relevant actions
to control over
this risk
management of this
risk.
Conclusion
From the above report it can be concluded that how a company like Deloitte identifies its
strengths, weaknesses, opportunities and threats. It can be concluded that how the company
analyses the internal and external factors such as political, ecological and other can affect the
operations within the organization and take control action over it. The risk assessment is
mentioned in which it is explained that what are the risk factors that impacts the working of the
company in various ways and how the company resolves them using risk management process.
An action plan is given through which one can get the knowledge of how to take actions over the
identified risks.

REFERENCES
Books and Journals
Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
HIREMATH, S., 2021. PESTLE ANALYSIS OF ORGANIZED RETAILING IN INDIA.
Lin, S.S., Shen, S.L., Zhou, A. and Xu, Y.S., 2021. Risk assessment and management of
excavation system based on fuzzy set theory and machine learning
methods. Automation in Construction, 122, p.103490.
Tabatabaee, S., Mahdiyar, A. and Ismail, S., 2021. Towards the success of Building Information
Modelling implementation: A fuzzy-based MCDM risk assessment tool. Journal of
Building Engineering, 43, p.103117.
Barafort, B., Mesquida, A.L. and Mas, A., 2019. ISO 31000‐based integrated risk management
process assessment model for IT organizations. Journal of Software: Evolution and
Process, 31(1), p.e1984.
Matias, A., Goncalves, M., Soeiro, C. and Matos, M., 2020. Intimate partner homicide: A meta-
analysis of risk factors. Aggression and violent behavior, 50, p.101358.