Report: Strategic Analysis of Accenture PLC's Competitive Strategies

This report provides a comprehensive strategic analysis of Accenture PLC, a global provider of management consulting and professional services. It begins with an executive summary defining strategic management and its principles, then delves into Accenture's competitive landscape by identifying its strongest and weakest rivals, including IBM, Capgemini, Deloitte, TCS, Infosys, and Wipro. The report analyzes strategic moves made by these rivals and identifies key factors underpinning competitive success, such as market share and customer service. It examines the industry's dominant economic features and the competition faced by Accenture, assessing the strength of five competitive forces using Porter's Model. Furthermore, the report explores changes in Accenture's business environment and their causes, offering an overview of the industry. It assesses Accenture's prospects for achieving its goals, evaluates the quality of its marketing, production, and personnel functions, and reviews its financial results. The report concludes with a summary of findings and includes references to support its analysis.

Running head: Strategic Management
Strategic Management

Strategic Management 1
Executive Summary
Strategic Management is formulating and applying the objectives and initiatives undertaken by
the company’s executives on behalf of its owners. It is based on the resources procured by the
company to fulfill these objectives along with conducting the assessments of internal and
external environment in which the company operates.
There are several principles of strategic management viz. effective communication, formulating
strategies to deal with the company’s rivals, comprehending the key factors which underpin
success and the competitive forces etc.
In this report, the strategies of Accenture PLC which is the provider of management consulting
and professional services internationally would be analyzed in the context of principles of
strategic management.

Strategic Management 2
Contents
Introduction.................................................................................................................................................3
Strongest rivals of Accenture.......................................................................................................................4
Weakest rivals of Accenture........................................................................................................................4
Strategic Moves made by the rivals.............................................................................................................4
Key factors underpinning competitive success............................................................................................5
Factors developed by Accenture..............................................................................................................5
Industry’s dominant economic features.......................................................................................................5
Competition faced by Accenture.................................................................................................................6
Strength of five competitive forces using Porter’s Model............................................................................7
Changes in the business environment of Accenture and its causes..............................................................8
Overview of the industry in which Accenture operates...............................................................................8
Prospects of Accenture that it will achieve its goals....................................................................................8
Assessment of the quality of the marketing, production and personnel function in Accenture....................9
Financial Results of Accenture....................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11

Strategic Management 3
Introduction
Strategic Management refers to managing the organization’s resources for accomplishing its
goals and objectives. It directs the company to achieve its goals and objectives. It helps the
managers to develop policies and procedures to accomplish these goals by allocating the
resources needed to implement these plans. It consists of formulating goals, assessing the
competitive environment, developing strategies and ensuring that these strategies are
implemented throughout the organization (Sen, Bingol and Vayvay, 2017).
There are various factors which decide how the organization will accomplish its objectives and
survive internationally and domestically. The business culture, skills and expertise of the
employees and the organizational structure are some of them.
The principles of strategic management shall be applied on Accenture in this report. Also, a
strategic analysis would be developed on the competitive strategies of the company. Accenture is
the provider of management consultancy and professional services globally. It delivers services
related to the strategy, consultation, digital technology and operations. It is a Fortune Global 500
company which was incorporated in Dublin, Ireland on 1st September, 2009 (Accenture, 2018).
Accenture has employed more than 425000 employees worldwide. The core values of the
company consists of establishing long term relationships with the client companies and building
a global network to deliver best quality services to the clients.

Strategic Management 4
Strongest rivals of Accenture
Accenture’s strongest rivals include IBM Global Business Services, Capgemini Consulting SA
and Deloitte Consulting LLP. International Business Machines (IBM) which is America’s
multinational technology company manufactures and trades in computer hardware and software.
It provides hosting and consultancy services in computers and nanotechnology. It is ranked
second after Accenture for IT operations and strategic consultancy.
Capgemini Consulting is an international management consultancy firm which is based in Paris.
It provides IT services and is amongst the biggest outsourcing, consulting and professional
services companies internationally.
Deloitte Consulting LLP is third largest company after Accenture and IBM. It deals in services
related to strategy, technology and human capital (Gibbons, Scott and Fhionnlaoich, 2015).
Weakest rivals of Accenture
The weak contenders of Accenture are TCS, Infosys and Wipro (Livemint, 2017). Tata
Consultancy Services (TCS), Infosys and Wipro are Indian multinational service providers
dealing in IT services, consultancy and business solutions.
Strategic Moves made by the rivals
Accenture’s biggest contender IBM believes in innovation and up gradation of its most
advanced information technologies comprising of various software, mechanisms and services. It
operates in one of the leading industries in the current scenario.
According to Capgemini Consulting (2018) the strategic development team of the company
delivers sustainable competitive advantage to the company through adopting immediate
actionable tactics. Through its corporate portfolio strategy and strategic planning process, it has
become one of the most competitive and winning companies of the world.
As per Deloitte (2014) the strategies followed by the company to outwit its competitors include
corporate strategy, market analysis and strategy and go-to-market and post go-to-market.

Strategic Management 5
Key factors underpinning competitive success
In order to succeed in the business, Accenture adopts key planning factors for competitive
success which include market share, focus and customer service.
Market share pertains to occupying the market. If Accenture wants to outperform its competitors
then it should determine those strategies which help it to separate itself from the competition. It
must innovate and implement new and creative ideas in service support, up gradation of features
of the software which are relevant to the industry.
Accenture should focus on the key areas of business. Through an efficient business plan, it needs
to dig down the core of business functions and should create plans which are based on busies
specific issues.
Customer Service is one of the important planning factors which are essential for customer
retention and maintain a decent customer appreciation rating. Developing a customer survey will
allow the company to review its performance in terms of customer satisfaction (Aguilar, Hidalgo
and Cagliano, 2015).
Factors developed by Accenture
Accenture has developed the market share as its key factor underpinning competitive success. It
follows the principle of look forward and not backward as its core policy of strategic
management.
Also, it has implemented the strategy of focusing on the key performance drivers. Customer
servicing and incorporating post deal improvements are also the part of its policies and
objectives.
Industry’s dominant economic features
According to Cizelj (2014) over the last 30-40 due to the process of globalization and
information revolution have developed the economic trends by making the economic activities
subject to global competition.

Strategic Management 6
According to the World Bank, there are four major aspects of the knowledge economy. First is
establishment of economic and institutional regime for the development of the knowledge
industry and entrepreneurship. Second is educated and skilled population to create, share and use
the knowledge. Third is emergence of dynamic information mechanisms to communicate,
distribute and process the information.
Fourth and the last are effective innovation systems of firms, research centers and consultants to
tap into the stock of global knowledge (Hretcanu, 2015).
Competition faced by Accenture
Accenture operates in the knowledge industry. It is one of the most dynamic and emerging
industries. Accenture is amongst the leading firms in IT services. It faces the competition due to
the following factors:
1. Threat of new entrants: The emerging entrants into the IT industry bring creativity,
innovative ways to perform the tasks thereby putting pressure on the company through
cost reduction and providing new value propositions to the consumers.
2. Bargaining power of suppliers: Due to the bargaining power of the suppliers, the
company is facing the threat of paying higher prices of the raw materials to the suppliers.
3. Bargaining power of buyers: The customers aspire to avail the services of the company
at minimum prices as possible. It impacts the profitability of the company in the long run.
4. Threats of Substitute products or services: The Company is facing the threats of
substitute products or services as the new entrants are offering value propositions which
vary from the present offerings in the industry.
5. Rivalry amongst the existing competitors: Due to the rivalry amongst the existing
companies is powerful, it will lower down the prices which in turn would have an impact
on the profitability of Accenture (Durmaz and Düşün , 2016).

Strategic Management 7
Strength of five competitive forces using Porter’s Model
The analysis of the five competitive forces of Accenture using Porter’s Model is as follows:
1. Threat of new entrants: The threat of new arrivals can cause cost competition and high
switching cost so that it can meet the changing needs of the customers.
2. Bargaining power of suppliers: If the suppliers are in the prominent positions, they can
impact the margins. The suppliers in the Technology sector can use their bargaining
power and compel the firms to pay higher prices for their services. It can decrease the
overall profitability of the Information Technology services.
3. Bargaining power of buyers: The buyers need special customization at nominal prices. It
has an impact on the profitability of the company in the long run.
4. Threats of Substitute products or services: Customers are driven towards those companies
which fulfill their needs economically and that too in an innovative way. So, due to
emergence of the substitute products and services, the profitability of Accenture is
suffered.
5. Rivalry amongst the existing customers: Due to intense rivalry amongst the existing
competitors of Accenture, the prices are decreased thereby impacting the profitability of
the company (Accenture, 2017).

Strategic Management 8
Changes in the business environment of Accenture and its causes
The changes are introduced in the business environment for various reasons such as contributing
to better business performance, to increase the efficiency in the performance of employees and
for positioning the organization in a better way in the industry.
Some of the changes in the business environment of Accenture are introduced because of the
various reasons. These transformations include changing contracts of employment, increase in
the working hours, reduction in the staff, restructuring of teams and departments.
The reasons behind the introduction of these changes include increasing pressures from the
industry, budgetary constraints, change in the government legislations and regulations (Wirtz
and Daiser , 2017).
Overview of the industry in which Accenture operates
The industry providing the services of management consultancy, technology and outsourcing is
influenced by clients. The industry has to adapt itself quickly to the changing needs of the
consumers. The companies operating in this sector have to transform themselves in terms of
structure, services and operations. During the past few years, there have been remarkable
transitions in terms of legislations and technology.
The firms operating in this sector have to respond quickly to the needs of the customers along
with maintaining a competitive edge and focusing on their long term growth. However, the
industry faces a lot of challenges such as transitions in the technology occur faster than the firms
are able to cope up with and failures in implementing the innovations etc. (Pearlson, Saunders
and Galletta, 2016).
Prospects of Accenture that it will achieve its goals
According to Accenture (2018) the company is consistently innovating and implementing new
technology to improve its productivity. It is using the concept of Artificial Intelligence (AI) to
create entirely new services, markets and products.

Strategic Management 9
Through the use of AI, the revenue can be boosted up to 38% in the next five years. This may
lead to higher levels of profitability and employment in the company. It has adopted the strategy
of reevaluating the roles and responsibilities of the work force and shifting it to new business
models. It also involves training and upgrading the skills of the work force to assimilate new
technological processes in its processes (Negroponte, 2015).
Assessment of the quality of the marketing, production and personnel function in
Accenture
Accenture follows the strategy of Just-In-Time marketing and it believes that it can eliminate
much of the wastage of resources by creating links with consumers who are ready and able to
buy the products and services
By adopting the concept of lean thinking, the company delivers only those services and products
which engage its customers. While the companies adopt those processes which results in wastage
of resources, Accenture adopts the policy of lean management principles which helps in sale
effectiveness (Ahmed et al., 2016).
Creating a HR strategy which integrates the business strategy and human capital strategy results
in delivering high value talent to the clients.
Financial Results of Accenture
According to Accenture (2017) the company performed efficiently during the financial year
2016-2017. The net revenues amounted to US$34.9 Million, a 6 % increase as compared to the
revenues of last year which amounted to US$ 32.9 Million.
During the last three financial years, a compound annual revenue growth of 9 % in the local
currency was reported and the same was reported in terms of adjusted earnings per share.
Also, Accenture has delivered yearly return (including dividends) of 20% which is twice the
return of S&P 500 Index. Also the company is investing in the acquisitions to drive its growth.
They amounted to $1.7 Billion in 2017 which was twice the investment in the financial year
2016.

Strategic Management 10
Conclusion
Thus to conclude, it can be said that Accenture has focused on its performance and turnover as
its brand line is “High Performance Delivered”. It is following the trend of establishing itself
internationally. It aims at focusing on increasing its volume and efficiency.
Accenture adopts the strategy of looking forward and not backward. It relies on the future
forecasts and plans and strategizes its policies accordingly to cope up with the threats of the
probable risks arising in the future. It believes that the capability to deliver future values depend
on the performance drivers.
Delivering high quality products and services to the customers and due diligence are the key
drivers to accomplish the goals of the organization. Also, it employs experts with updated
technical skills to deliver technical and operational expertise.
It has adopted certain strategies to beat the competition and to be cost effective. It follows the
concept of operational excellence which means that the company outperforms its competitors
with superior operations by using human resources, assets and technologies. Also, Accenture
expands itself in the growing nations to increase its sales and performance.

Strategic Management 11
References
Accenture (2017) Leading in the New [online]. Available from:
https://investor.accenture.com/~/media/Files/A/Accenture-IR/home/accenture-annual-report-
2017.pdf [Accessed 24th March, 2018].
Accenture (2018) About Accenture [online]. Available from:
https://www.accenture.com/ph-en/company [Accessed 23rd March, 2018].
Accenture (2017) M& A in communications: keeping competitive [online]. Available from:
https://www.accenture.com/t20170315T054810Z__w__/us-en/_acnmedia/Accenture/
Conversion-Assets/DotCom/Documents/Local/en-gb/PDF_3/Accenture-MA-Keeping-
Communications-POV.pdf [Accessed 24th March, 2018].
Accenture (2018) Reworking the Revolution [online]. Available from:
https://www.accenture.com/t20180226T082732Z__w__/in-en/_acnmedia/PDF-69/Accenture-
Reworking-the-Revolution-Jan-2018.pdf#zoom=50 [Accessed 24th March, 2018].
Aguilar, I.L., Hidalgo , A. and Cagliano, R.(2015) Innovation in consulting firms: what are the
foundations? International Association for Management of Technology [online]. Available from:
http://www.iamot2015.com/2015proceedings/documents/P118.pdf [Accessed 24th March, 2018].
Ahmed, J.U., Ameen, M.M.N., Uddin, M.J. and Khan. T.N. (2016) Strategic Issues for
Accenture Bangladesh: A Developing Country Perspective. Vision. 20(1), pp. 66–72.
Capgemini Consulting (2018) Strategy [online]. Available from:
https://www.capgemini.com/consulting/service/digital-strategy-transformation/strategy/#
[Accessed 23rd March, 2018].
Cizelj, B. (2014) Global Trends in Knowledge Economy [online]. Available from:
https://www.sbra.be/sites/default/files/global_trends_in_knowledge_economy_boris_cizelj.pdf
[Accessed 24th March, 2018].