LAL BAHADUR SHASTRI INSTIUTE OF MANAGEMENT

PROJECT REPORT

Submitted to:
Prof. Vikas Mehra

Report made by :
Harsh Saxena
06/2014

TABLE OF CONTENTS

1. Introduction




2. Industry Expertise & Executive Summary
3. Accenture Products and Services
4. Mission, Vision and Goal


5. Strategy for Growth and Positioning
6. External Analysis



7. SWOT Analysis




8. Internal Analysis



9. Competitor Analysis



10. Business Level Strategy


11. Corporate Level Strategy


12. International Corporate Level Strategy
13. Mergers, Acquisitions, Alliances
14. Financial Analysis



15. Recommendations

3
4

5
5-6
6-7
7-10
11-13
14-15
16-18
19

20
20-22

23
24-27
28

Introduction

Accenture is one of the leading providers of technology, consulting
and outsourcing services in the world.

Accentures effective use of disruptive technologies and best-
practice methodologies in the consulting space, as well as an
adaptive management style, has morphed the initially small
company into one of the biggest consulting companies in the world
The company has wide experience, capabilities across most of the
industries and business functions - Yahoo! Inc, Accenture Ltd
Company Profile-Yahoo! Finance

It provides services to its customers through a global delivery
network of over 50 centres. It has offices and clients located in 120
countries. The company is headquartered in Dublin, Ireland and
employs 273,000 people around the globe. The chronology of events
that led to formation of Accenture:

1989: Accenture was formally established as a separate stand-

alone business unit (as Andersen Consulting) after a
restructuring of the Andersen Worldwide Organization.
1991: Anderson-Consulting began its first major outsourcing
assignment, which involved BP Explorations accounting,
finance and support functions.
1994: Established R & D centres at Palo Alto (US) & Sophia
Antipolis(France)
2000: arbitration proceedings between Anderson Consulting,
Arthur Anderson & Anderson worldwide led to its separation.
2001: renamed Accenture, a public company & listed in NYSE.

Accentures Industry Expertise

Communications, Financial Health
Media &
&
Technology
Public
Service
Communications Banking
Health
Electronics
Capital
Public
Markets
Media
Insurance Service
Entertainment

Products

Resources

Automative
Chemicals
Consumer and Energy
good services
Life sciences Natural
resources
Industrial
Utilities
Equipment
Retail
Infra and
Transportation

Executive Summary
In this paper, I seek to perform multiple analysis on Accenture as a
Business entity that uses its unique set of resources, activities and
capabilities that forms the basis of the firms strategy, how it has
tackled the dynamic external/internal environmental conditions
effectively and its response to it and how Accenture has been able to
make choices among two or more alternative strategies. Finally,
recommendations are made wherever deemed necessary.

Accenture Products/Services

MISSION, VISION, VALUES AND GOALS

Accenture has a tagline

High Performance. Delivered.
The vision of Accenture is to become one of the world's
leading companies, bringing innovations to improve the way the
world works and lives.

The mission and goal of Accenture is, to help clients to become high
performance businesses and governments

The six core values form the backbone of how Accenture go to
market are:
Client Value Creation : Understand/ meet client expectations
100% of the time
One Global Network: Act to enhance the collective values of
the global organization

 Integrity: Always act with openness and honesty

Stewardship: Think future oriented; act /invest to build a
stronger firm for tomorrow
Best People: Are highly competent and make a commitment to
excellence, teamwork, and the success of our clients
Respect for the Individual : Treat each person as we would like
to be treated

Accentures Strategy for Growth and Positioning

Companies who have vision and are willing to change the rules are
those who will successfully gain and maintain competitive
advantage.
Accenture, since its inception, has always been a global company
which believes in continuous innovation and rapid transformation
and these have been the primary themes throughout its history. In
the process, it sought to build experience, comprehensive
capabilities across all industries and business functions through
extensive researches on the functions and requirements of world's
most successful companies and also, collaborating with the clients to
help them become high-performance consulting and technology
service provider. In this way, Accenture have been able to create a
sustainable value for their customers and the shareholders. Also,
Accenture identifies new business and technology trends and
develop solutions to help clients around the world which enable the
company to:
Enter new markets
Increase revenues in existing markets
Improve operational performance
Delivery of products and services more effectively and
efficiently


Strengths that distinguish Accenture in the marketplace are:
Extensive industry expertise.
Broad and evolving service offerings.
Expertise in business transformation outsourcing.
History of technology innovation and implementation,
including our research and development capabilities.

These core competencies allow Accenture to serve clients along the
entire deal life cycle, independent of the actual entry point into the
project and are able to support customers on pan-geographic deals
with local resources available across different countries. The
workforce is an essential ingredient to achieving its business
objective. With approximately 273,000 people in 120 countries, deep
industry and business process expertise, Accenture is able to
mobilize the right people, skills and technologies to help clients
improve their performance. We need to further study the factors
that determine the strategies that Accenture has adopted and also
the shortcomings associated with these strategies.

External Analysis
a) DemographicAccentures major clients are high profile large - complex
organizations that consistently feature in the Fortune 500
companies. Now, Accenture has taken its core business and
investment into new and emerging areas with special emphasis on
the BRIC countries, South Korea and Mexico, Japan to expand its
market share and growing business. This move has presented
Accenture a large expanding and dynamic market whose customers
are willing to try world class products/services but at the same time
are cost and quality conscious. These countries also present a
conducive base to support for further growth of business and an
array of quality & technically efficient pool of human resources
which Accenture can pick to not only enhance its core competencies

but as well as leave a footprint.

The ability of Accenture to replicate its model or refine the model to
suit the complexities of these countries will enhance the Accenture
brand in these markets.


b) Economic
Due to weak currencies, low labour cost, the need to be closer to the
customers and its objective to expand the market geography,
Accenture need to think of strategies to derive optimal benefit from
other locations.
There is already strong competition in these countries (especially in
India like TCS, Infosys, Wipro, and Mahindra Satyam),
leveraging on the local resource pool and benefits of these markets.
The impact on Accentures business effectiveness and its revenue
may take a hit.

c) Technological

Since IT represents Accenture one of its core business, at present
uses it efficiently in managing their operations of consulting and
providing IT & technology services to clients across the globe. The IT
system is fully integrated into Accentures operations with
capabilities of providing solutions and knowledge sharing &
management
d) Global
In the face of globalization, rapid advancement in technology and
increasing demands placed on scarce resources (financial, social and
environmental) Accenture need to expand into countries that offer
low cost location in order to lower transaction & delivery cost of
their products/services. This will enable Accenture to localize as well
as cater to the local preferences. The critical market for Accenture
will be the BRIC nations, South Korea, Taiwan, the ASEAN countries
and some countries in South America, Africa and the Middle East.
The endeavour of many of these countries in relaxing of entry &

trade norms and its quest to build a welcoming business

environment for IT & related services and technology would help
Accenture reduce its transaction & bureaucratic cost during its
expansion activities.

e) Political/Legal
The change in political environment and the stringent tax laws have
forced hands of certain companies headquartered in USA to change
their base. Accenture who had its headquarters in Bermuda now has
gone back to its country of origination, the city capital of Ireland,
Dublin because of more favorable tax laws present there

Porters Five Forces

1. Rivalry among existing competitors

There is a stiff competition between the existing players in the
industry. IBM, WIPRO, Infosys, Deloitte are some of the companies
that Accenture faces intense competition from.

2. Bargaining power of buyers

The bargaining power of buyers is large and the possibility of
pressure on rates exists. The buyers are basically the price setters for
the services they receive.

3. Bargaining power of suppliers

The bargaining power for suppliers is very low and since high-
standardization exists, there is little scope of suppliers having any
clout

4. Threat of substitutes

Internal IT departments of companies pose a threat to consulting
and outsourcing companies but the trend for internal IT departments
has reduced significantly because the companies want to focus on
their core competencies.

5. Threat of new entrants

New entrants and smaller organizations pose quite a significant

threat as lower costs are the main reasons why some companies
prefer to outsource their work to them. Although competing over
the longer run against the bigger companies proves to be a tough ask
for them but they do surely eat away the market share of bigger
companies


SWOT Analysis

Strength
1.Global reach scale
2. Strong customer base
3. Broad offerings

Opportunities
1. New emerging technologies and
services
2.Expansion into new geographies

Weakness
1. Low margins compared to
competitors

Threats
1. Stiff competition from some of the
biggest players like IBM, Infosys,
WIPRO etc.
2. Economic slowdown in US, Europe

Strength

1. Global reach and scale
The company operates in over 120 countries providing outsourcing
services in almost all the developed countries and also, through 50
site delivery centers in Eastern Europe, India, China and the
Philippines, as well as, professionals working at client sites around
other parts of the world. The company benefits from the resources
from around the world concerning specialized technology skills,
foreign language proficiency, proximity to clients and time zone
advantages, to deliver solutions under demanding time constraints.


2. Strong customer base
Its global reach, scale and broad offering have equated to a strong
customer base - serves about 96 of the Fortune Global 100
companies, three-quarters of the Fortune Global 500. Its customers
include companies like: Unilever, AIG Europe, Thomas Cook Group,
ING, Petrobas, BP, China National Offshore Oil, Barclays, Deutsche
Bank, BMW, Nokia Siemens Networks, Fiat etc., and several US
government agencies.

3. Broad offerings
Has one of the broadest offerings in management consulting,
technology services and outsourcing - caters to 18 industry groups,
under its five operating groups. It is the second largest integrated
consulting, technology and outsourcing services provider in the
world. The company offers a broad array of consulting services is one
of the leading technology services companies in the world and also,
provides a broad range of outsourcing solutions. We note that these
broad offerings also act as a deterrent to the entry of competitors.

Weakness

1. Low margins compared to competitors
When compared to Indian off-shore service providers that offer
similar services, Accenture recorded low margins - 12% to 13% range
over the period in 2015, much below the margins of the other
competitors. In 2015, it reported operating and net profit margin of
14.55% and 9.76%(competitors: Infosys, TCS and IBM reported
operating margin of 25.5%, 24.04%, and 19.85%,respectively, and
net profit margin of 21.89.5%, 20.68%, and 16.64%, respectively).
Low margins to competitors indicate, there is scope to improve the
cost structure and business model of the company it is expected that
over the long term, as outsourcing becomes a larger part of the
business, there is the opportunity for margin expansion.


Opportunities

1. New emerging technologies
New technologies and their implementation can create huge
opportunities for Accenture who can derive the benefits because of
their use of disruptive technology.

2. Expansion into new geographies
Expanding into new geographies could be one of the best
opportunities to increase the market share of the company. South
America and Africa remains to be an untapped market and moving
into developing nations and creating a strong foothold in these
nations can boost the overall financial structure of Accenture

Threats

1. Intense competition
Accenture faces intense competition from companies like IBM,
Deloitte, TCS, Infosys etc. and has done quite well competing with
the other players in the market

2. Economic slowdown in US, Europe
Economic slowdown in US and Europe has triggered a possibility to
look into new emerging markets like Asia, South America etc. The %
age of revenue generated from US and Europe has still account for
about 85% but there has been a significant gain in the Asian markets
as it has risen from 10% in 2009 to 17% in 2015

INTERNAL ANALYSIS

A mixture of unique resources combined with capabilities and
activities undertaken have given Accenture a competitive edge over
other major organization that competes in the same market sphere.
We will internally assess Accenture by undertaking the resource-
based view.
Accentures main assets are:
Resources infrastructure/knowledge, leaders, global delivery
network system, R&D (Innovation Center), proven track record and
its employees;
Activities - best practice methodologies, knowledge management,
learning organization, collaborations, the activities that focus on
building skills and capabilities;
Capabilities - use of disruptive technologies, broad offerings of its
products/services, deep industry and business process expertise.
The core business of Accenture is consulting providing high quality
consulting and in the process, helping clients innovate to become
high performance business. Accenture is an example that has
successfully managed the disruption of consulting model, doing away
with the traditional single tier of services provided and in place,
developed a three tier model, bringing in-house functions that were
sourced by multiple companies. Such practice adopted by Accenture
has changed the way business is conducted. Together with its
industry and business process expertise, charismatic leaders, broad
quality offerings of its products/services and efficient global delivery
network comprising of 50 centers with 273,000 employees,
Accenture is able to deliver services that deliver infrastructure from
multiple global locations providing unique and relevant benefits like:
increase in productivity, align service levels/spending with business
priorities, rationalize technologies, reduce total cost of ownership,
improve process quality, etc., to large companies. As customers
become increasingly sophisticated and demanding, it will be
imperative for Accenture to continue to reinvent its service offerings
and methods of delivery.

The practices (Best methodologies, KM, Learning Organization and

Alliances/Collaborations) followed by Accenture is also a source of
competitive advantage. Accenture has been able to capitalize on the
FMA in the outsourcing space and subsequently is placed number
one in this business. It has developed a knowledge base of industry-
specific process methodologies, each of which they can repackage
and re-used when working with other companies in the same
industry. Continuous improvement is achieved by using the results of
this analysis to make necessary changes to the methodology.
In recent years the company has also changed its business model to
collaborate or form alliances with major companies, with the idea
that each collaboration/alliance would be able to provide its
customers with an area of expertise. Accenture has formed alliances
with numerous companies in an attempt enter new market and
innovate the delivery methodology.

Accenture has always been aware of the innovations within
companies and thus offers clients the services of Accenture
Innovation Centre which provides the clients the opportunity to
brainstorm with its leading technologist to help generate new ideas
and become increasingly competitive.

Another core component to building Accentures repeatable process
is the new hire training that all client-facing employees undergo. In
order to ensure consistency, all employees from around the globe
experience training at a single facility. The teachers are consultants
at higher levels, also from across the globe. The trainings are not
only a way to bring up the newest ranks, but also an idea exchange
platform.
By developing a self-reinforcing system replete with training,
continuous process and methodology improvement, idea generation
and sharing, and consistent application of these components across
geographies, Accenture has successfully created a repeatable and
credible process.
Within the Accenture competing world, this is a key differentiator.

COMPETITOR ANALYSIS

Rivalry creates the strong need to understand competitors. In this
analysis we seek to reveal & understand Accentures competitors,
under the dimensions of: future objectives, their current strategy
and what are their strengths & weaknesses. The main competitors in
various industries are:

1. Global IT Consulting & Other Services: IBM Global Services, HP
Services &Fujitsu Ltd
IBM Global Services: remains the biggest player and continues to
expand through inorganic growth. It draws upon the world's leading
systems, software, and services capabilities. The company leverages
strong financial standings, industry & business process expertise and
on its wide operations in 170 countries across North America, Latin
America, Europe, the Middle East, Africa, and the Asia Pacific.
Through its two divisions: Global technology Services (GTS) and
Global Business Services(GBS), it is able to offer a wide array of
services like infrastructure & business processes services and
professional services & application outsourcing services. Presently, it
is expanding its business into new geographies and market segment
through a number of acquisitions (Logicalis Group, Daksh, India's
third largest business outsourcing company, Trigo Technologies),
launching a broad array of new open standards-based software and
technologies to give organizations the choice and flexibility to build
the front end of their collaborative solutions on a variety of client
devices, expanding its innovation & global delivery centres and
strengthening its operations both through inorganic and organic
initiatives. Threats to IBM are: contraction in end markets due to
slow down in economy which has created challenging business
environment and intense competition in all segments which could
adversely affect revenues & profitability.

2. Global Management & Marketing Consultancy: Deloitte Touche

Tohmatsu, Ernst & Young International and KPMG International

There is significant fragmentation within the market among smaller
specialized companies, which weakens rivalry overall. Overall, rivalry
with respect to the management and marketing consultancy market
is moderate. Due to the economic slowdown, the global
management & marketing consultancy markets growth rate slowed
in 2008, with decline in 2009 followed by a return to low levels of
growth and has had a significant impact on the market thus lowering
revenues and increasing rivalry. The major competitors in this
industry are Deloitte Touche Tohmatsu, Ernst & Young International
and KPMG International are worldwide organizations with
exceptionally strong brands.

Deloitte Touche Tohmatsu: provides a broad range of professional
services including audit, tax, consulting and financial advisory
services, with operations in nearly 150 countries through 70 member
firms. The company serves national and middle market enterprises,
public institutions, privately owned companies and public sector
organizations. It provides its services to all major sectors Deloitte's
services can be categorized into four broad functional areas: audit,
consulting, tax and advisory services. The company has been actively
forming consulting alliances (3M Company, BEA Systems, HP, IBM,
Oracle Corporation, SAP, Siemens Medical Solutions USA and Sun
Microsystems), established Deloitte ASEAN with member firms in six
countries: Singapore, Malaysia, Indonesia, Thailand, the Philippines
& Guam, Deloitte Caribbean/Bermuda, a new cluster of six member
firms, to strengthen their position in the Asian & Americas to expand
opportunities for growth in the region. Collaborative strategy is
being followed as is the instance of the global initiative among
Deloitte member firms and SAP AG to develop and deliver enterprise
solutions to better serve clients in sustainable governance, risk and
compliance management processes.

The acquisition of substantially all of the assets of BearingPoints

North American Public Services brings in additional capabilities to
help Deloitte serve more clients in federal, state and local
governments in the US practice. Deloitte has a weak presence in the
business process outsourcing (BPO) as compared to its main
competitors such as KPMG international, McKinsey doesnt enable it
to benefit from one of the fasting growing global services. The
threats to Deloitte are from larger companies/organizations that
employ in-house business analysts and marketing teams, act as a
strong substitute threat to management and marketing consultancy
services.

Business Level Strategy

Cost Leadership:
1. It achieves lower cost to competitors due to its wide operational
footprint which cuts down significantly on the delivery cost;
2. Industry & market expertise that expedites towards lesser
product & implementation cost.

Differentiation:
1. It differentiates itself from its competitors by providing client
suited products and services derived from in-house R&D and
collaborative research with the client assessing its needs &
requirements.

Corporate Level Strategy

An analysis of the 2015 revenue sheet of Accenture reveal the
following contribution to its total revenue

By operating group:
1. Communication & High Tech 19.49%
2. Financial Services 19.79%
3. Health & Public Services 16.73%
4. Products 22.76%
5. Resources 15.08%
6. Others 0.05%
By type of work:
1. Consultancy 49.69%
2. Outsourcing 44.21%
3. Reimbursements- 6.1%

Since less than 70% of the revenues comes from the dominant
business and all the businesses share product, technological and
distribution linkages, we can categorize Accenture to be an
organization that is adopting a Related Constrained Diversification
Strategy by which it has been able to build upon its existing
resources and capabilities to create value for the customers and its
stakeholders.

International Corporate Level Strategy

Accenture chose to compete internationally since its inception as a
separate stand-alone business unit (Andersen Consulting). Its first
major outsourcing assignments in 1991 involved managing BP
Exploration's accounting, finance and support functions. Accenture
did not follow any localization, it shifted the companys headquarter

to Dublin, Ireland and, chose to serve the US and the European

market where most of the Fortune 500 listed companies are
established. Currently, Accenture operates through a global delivery
network of over 50 centers with offices and operations in more than
120 countries employing 273,000 people. Accenture focused on the
notion of high performance growth and the belief that management
can systematically manage for this outcome. As a result, Accenture
has explored both the concept of high performance and the
strategies that consistently deliver high performance. Thus the firm
used the strategy to achieve efficient operations through resource
sharing and facilitating coordination & cooperation across country
boundaries and offer standardized products across countries with
the competitive strategy being controlled form home. It emphasized
on opportunities to take innovations at the corporate level and use
them in other markets. During its first 10 years, Accenture evolved
from a systems integrator to a global management consulting and
technology services establishment by identifying new business &
technology trends an developing solutions to help clients around the
world enter new markets, increase revenues in existing markets,
improves operational performance, and deliver their products and
services more effectively and efficiently.

The main factors that have helped Accenture achieve global
competitiveness are:
Fast growth in US & European markets
Development & use of IT in conduct of business by major
companies in developed countries
Ability to use disruptive technologies to bring into the market
new quality-differentiated products/services and to
redesign/remodel its delivery network
Shared resources and capabilities
Good rivalry given by other large companies and its mission to
stay ahead of competitors
With increasing sophistication of markets with greater information
flow (due to diffusion of internet), growing number of global

competitors which heightens the need to hold the cost down, the
desire to meet the specialized needs of the customers and difference
in culture & institutional environment has pressured Accenture to
differentiate and even customize their local markets. Accenture has
sought to achieve both global efficiency and local responsiveness
through activities like:
Merger & Acquisitions
Strategic Alliances
Collaborations ongoing research with clients allows
Accenture to customize their products/services specific to
needs
Expansion
Thus from the Global Strategy Grid, we can conclude that Accenture
has moved from its international strategy to transnational strategy.

Mergers, Acquisitions and Alliances

Accenture to acquire Majority Stake in IMJ to Expand its Digital
Capabilities in Japan

Accenture Completes Acquisition of Formicary, Strengthening
Systems Integration and Technology Consulting Capabilities in
Trading Systems Transformation

Accenture Acquires CRMWaypoint to Strengthen its Cloud First
Agenda and Salesforce Capabilities

Microsoft and integrator partners Accenture and Avanade have
jointly funded and built a new hybrid cloud bundle designed to get
more enterprise companies on Microsoft's cloud.


The Accenture Hybrid Cloud Solution for Microsoft Azure
integrates and builds on services and features from Microsoft,
Accenture and Avanade -- a solution provider created and
launched by Microsoft and Accenture in 2000 -- "to help
enterprises deliver 'everything as a service,'" according to the
press release announcing the coming offering.

Financial Analysis

The company recorded revenues of $ 32.91 billion during the
financial year ended August 15 (FY2015), a growth of 3.26 over 2014.
Beloware the breakups of revenues generated to the total:

By operating group:
1. Communication & High Tech 19.49%
2. Financial Services 19.79%
3. Health & Public Services 16.73%
4. Products 22.76%
5. Resources 15.08%
6. Others 0.05%

By type of work:
1. Consultancy 49.69%
2. Outsourcing 44.21%
3. Reimbursements- 6.1%

By geography:
1. EMEA, largest geographical market 32.06%
2. Americas 44.04%
3. Asia Pacific 17.2%

Revenue
33
32
31
Revenue

30
29
28
2015 2014 2013 2012

Revenue(in(million($)(
(

Opera2ng(Segment6Revenue(
(
2100"
1800"
1500"
1200"
900"
600"
300"
0"

2015"
2014"
2013"

Communica
2ons"

Financial"
Services"

1613"
1542"
1333"

1638"
1234"
1221"

Health"and"
Public"
Service"
1384"
1345"
1245"

Products"

1883"
1789"
1682"

Business'Process'Distribu/on'
6%$

Consultancy$

50%$

Outsourcing$

44%$

Reimbursement$

%age share

Geographical revenue
60
40
20
0

Geographical
revenue

Americas

EMEA

Asia Paci:ic

44.04

32.06

17.8

Recommendations

1. Intensified attention to Developing nations for long term
survival:
Most of the business of Accenture is based out of developed nations
like USA, UK and others. For future growth in this sector attention
has to be given to developing nations like the BRIC countries as there
are a lot of companies coming up in these nations.

2. Emphasis on Outsourcing:
With the economy on the mend and technology spending expected
to spike, More emphasis has to be given to outsourcing division. As
companies and industries come up, the competition evolves &
intensifies. Consequence would be the need for cost reduction which
can be achieved by outsourcing their various functions.
3. Building Development Centres at Developing countries to cut Tax
Break cost:
With cut in tax breaks on outsourcing by Obama, the margins for
the outsourcing business from US going to further decrease.
Company already has fewer profit margins as compared to its
competitors. They should look for building development centers in
counties like Brazil and Ghana where cost of outsourcing is lesser
than countries like India and China.
4. Diversification into other sectors to remove cyclicality:
Cyclicality in their business can be removed by diversification into
sectors like Retail and government /public service organizations.
Retail sector is growing in with high pace in BRIC countries so they
should look for retail business in these countries.
5. Look for opportunities into business of IT cost optimization:
Most of the competitors are getting into new business of IT cost
optimization e.g. Cognizant etc. So they should look for the
opportunities in this sector also.

References

Marketline - Datamonitor Reports:
Accenture Plc - Company Profile,;
Deloitte Touche Tohmatsu, IBM International, KPMG, HP
Services Company Profile Report
Yahoo! Inc, Accenture Ltd Company Profile-Yahoo! Finance;
CSI MArket
Strategic Management Ireland, Hoskisson & Hitt, CENGAGE
Learning 2008 e.